AcceptanceAcceptance

The common law (the United States)The common law (the United States) CISGCISG

The Common LawThe Common Law

DefinitionDefinition

Acceptance is a voluntary act (either Acceptance is a voluntary act (either words or words or

conductconduct) by the ) by the offereeofferee that shows that shows assent assent

(agreement)(agreement) to the terms of an offer. The to the terms of an offer. The

acceptance must be unequivocal and must be acceptance must be unequivocal and must be

communicated to the offeror.communicated to the offeror.

How to make a valid acceptance?How to make a valid acceptance?True or FalseTrue or False A makes an offer to B. B is not interested, A makes an offer to B. B is not interested,

but B’s friend, C, accepts the offer. Then a but B’s friend, C, accepts the offer. Then a contract is concluded.contract is concluded.

(Who can accept?----I. the person to whom (Who can accept?----I. the person to whom the offer is made II. his agents)the offer is made II. his agents)

Offeree says, “I accept the offer, but I wish I Offeree says, “I accept the offer, but I wish I could have gotten a better price.” So there is could have gotten a better price.” So there is no effective acceptance.no effective acceptance.

The offeree says, “I accept the offer, The offeree says, “I accept the offer, but only if I can pay on ninety days’ but only if I can pay on ninety days’ credit. Then this is a valid acceptance.credit. Then this is a valid acceptance.

The offeree replies, “I accept; please The offeree replies, “I accept; please send written contract.” This should be send written contract.” This should be taken as an acceptance.taken as an acceptance.

The offeree replies, “I accept if you The offeree replies, “I accept if you send a written contract.” This should send a written contract.” This should be taken as an acceptance.be taken as an acceptance.

It is reasonable for the offeror to state, It is reasonable for the offeror to state, “By your silence and inaction you will be “By your silence and inaction you will be deemed to have accepted this offer.”deemed to have accepted this offer.”

Silence can never be an acceptance.Silence can never be an acceptance.

(Silence can be an acceptance (1) when (Silence can be an acceptance (1) when the parties have made such agreements or the parties have made such agreements or (2) when the offeree has had prior (2) when the offeree has had prior dealings with the offeror.)dealings with the offeror.)

CISGCISG Definition Definition Article 18 Article 18 A A statement statement

made by or other made by or other conductconduct of the of the offereeofferee indicatingindicating assent assent to an offer is an to an offer is an acceptance.acceptance.

Three basic elements to make a valid Three basic elements to make a valid acceptanceacceptance

(1) offeree (2) through a statement or (1) offeree (2) through a statement or other conduct (3) indication of assent to other conduct (3) indication of assent to the offerthe offer

When the acceptance becomes When the acceptance becomes effective?effective?

Under the common law, the acceptance Under the common law, the acceptance becomes effective as soon as it is dispatched becomes effective as soon as it is dispatched by the offeree, and then a contract is formed.by the offeree, and then a contract is formed.

--------the mailbox rulethe mailbox rule Under the civil law, the acceptance becomes Under the civil law, the acceptance becomes

effective when it reaches the offeror, and then effective when it reaches the offeror, and then a contract is concluded.a contract is concluded.

--------the rule of receipt of the letter of the rule of receipt of the letter of acceptanceacceptance

As to this point, CISG follows an As to this point, CISG follows an approach somewhat different from the approach somewhat different from the common law but similar to the civil law.common law but similar to the civil law.

----Article 18----Article 18 CISG mainly adopts the approach of civil CISG mainly adopts the approach of civil

law, but it does absorb some elements of law, but it does absorb some elements of mailbox rule.mailbox rule.

Article 16 / Article 18 Article 16 / Article 18

CISG tries to compromise on two CISG tries to compromise on two legal systems.legal systems.

(1)(1) Art.18 An acceptance is effective when Art.18 An acceptance is effective when it reaches the offerorit reaches the offeror

----receipt of acceptance----receipt of acceptance (2) One point which should be stressed is (2) One point which should be stressed is

that offeree’s dispatch of an acceptance that offeree’s dispatch of an acceptance cuts off the offeror’s right to revoke the cuts off the offeror’s right to revoke the offeroffer

----dispatch of acceptance----dispatch of acceptance

Whether a late acceptance is effective?Whether a late acceptance is effective?

There are two kinds of late acceptance.There are two kinds of late acceptance.

1.1. The offeree makes an acceptance The offeree makes an acceptance beyond the beyond the time limit for acceptance. time limit for acceptance.

That is, it is late when the offeree dispatches That is, it is late when the offeree dispatches the acceptance. the acceptance.

It is impossible for such acceptance to It is impossible for such acceptance to become effective become effective except thatexcept that without delay without delay the offeror informs its effectiveness. the offeror informs its effectiveness.

2.2. The offeree dispatches the acceptance The offeree dispatches the acceptance within the time limit for acceptancewithin the time limit for acceptance but the acceptance reaches the offeror but the acceptance reaches the offeror beyond the time limit. beyond the time limit.

That is, it is not late when the offeree That is, it is not late when the offeree dispatches the acceptance, and if its dispatches the acceptance, and if its transmission had been normal, it would transmission had been normal, it would have reached the offeror in due time.have reached the offeror in due time.

Such late acceptance is generally Such late acceptance is generally effective as an acceptance effective as an acceptance unlessunless without delay the offeror informs without delay the offeror informs the offeree that he considers his the offeree that he considers his offer as having lapsed.offer as having lapsed.

---- ---- Art.21Art.21

Whether an acceptance can be Whether an acceptance can be withdrawn or revoked?withdrawn or revoked? CISG tries to achieve a CISG tries to achieve a balancebalance in in

protecting the interests of two contracting protecting the interests of two contracting parties. On one hand, CISG protects the parties. On one hand, CISG protects the interests of the interests of the offerorofferor, who is entitled to , who is entitled to withdraw or revoke the offer; On the withdraw or revoke the offer; On the other hand, CISG protects other hand, CISG protects the interests of the interests of the offereethe offeree, who is also entitled to , who is also entitled to withdraw the acceptance. withdraw the acceptance.

An offer may be revoked if the An offer may be revoked if the revocation reaches the offeree revocation reaches the offeree before before he has dispatched an acceptance.he has dispatched an acceptance.

The offeree’s dispatch of The offeree’s dispatch of acceptances acceptances cuts offcuts off the offeror’s right the offeror’s right to revoke the offer.to revoke the offer.

Whether a reply to an offer containing Whether a reply to an offer containing additional or different terms constitutes additional or different terms constitutes an acceptance?an acceptance?

whether whether the terms constitute material the terms constitute material alteration?alteration?

Material alteration: price, payment, Material alteration: price, payment, quality and quantity of the goods, place quality and quantity of the goods, place and time of delivery, extent of one party’s and time of delivery, extent of one party’s liability to the other or the settlement of liability to the other or the settlement of disputesdisputes

Case analysis:Case analysis: A computer printer distributor in Argentina A computer printer distributor in Argentina

receives an offer by mail from Epson, a U.S. receives an offer by mail from Epson, a U.S. company, in reply to an inquiry. The offer company, in reply to an inquiry. The offer arrives in Argentina on arrives in Argentina on June 2. On June 12June 2. On June 12, the , the Argentinean company sends its acceptance by Argentinean company sends its acceptance by mail. mail. On June 8On June 8, Epson sends a revocation of its , Epson sends a revocation of its offer that was received on offer that was received on June 13June 13 in Argentina. in Argentina. The acceptance from Argentina arrives in the The acceptance from Argentina arrives in the United States on United States on June 17June 17. Did a valid contract . Did a valid contract arise? When was the offer valid? When was the arise? When was the offer valid? When was the acceptance valid? When was the revocation acceptance valid? When was the revocation valid? Decide the case under the common law valid? Decide the case under the common law and under the CISG.and under the CISG.

Case analysis:Case analysis:

offereeofferee offerorofferor

Argentinean distributorArgentinean distributor The U.S. Epson com.The U.S. Epson com.

June 2June 2 receive an offerreceive an offer

June 8June 8 send a revocation send a revocation of its offerof its offer

June 12June 12 mail the acceptancemail the acceptance

June 13June 13 receive the receive the revocationrevocation

June 17June 17 Acceptance Acceptance arrivesarrives

Legal principles:Legal principles:

1.1. An offer may be revoked if the An offer may be revoked if the revocation reaches the offeree before revocation reaches the offeree before he has dispatched an acceptance.he has dispatched an acceptance.

2.2. The offeree’s dispatch of acceptance The offeree’s dispatch of acceptance cuts off the offeror’s right to revoke cuts off the offeror’s right to revoke the offer.the offer.