International Contracts Slide Set 7 International and British Contract Law Entire Agreement ICC Model Contract Matti Rudanko
International (and British) Contract Law vs. Nordic Contract Laws Expression vs. Will Late and modified replies Other objective vs. subjective criteria Withdrawal of offer or acceptance International Contracts 7 2
Revocation (Withdrawal) of Offer or Acceptance (FI) Finnish Contracts Act Art. 7: An offer or an acceptance that is revoked shall not be binding, if the revocation reaches the person to whom it is addressed before, or at the same time as, the offer or acceptance comes to his/her attention. International Contracts 7 3
Withdrawal of Offer, International Article Withdrawal of Offer (1) An offer becomes effective when it reaches the offeree. (2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer. Article Withdrawal of Acceptance An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective. An acceptance of an offer becomes effective when the indication of assent reaches the offeror (2.6.2) International Contracts 7 4
Revocation of Offer Article Revocation of Offer (1) Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before it has dispatched an acceptance. (2) However, an offer cannot be revoked (a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or (b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance of the offer. International Contracts 7 5
6 “Entire agreement” I “This contract constitutes the entire agreement and understanding between the parties. There are no agreements, understandings, conditions, reservations or representations, oral or written, that are not embodied in this contract or that have not been superseded by this contract.”
International Contracts 7 7 “Entire agreement” II Unidroit 2.17: A contract in writing which contains a clause indicating that the writing completely embodies the terms on which the parties have agreed cannot be contradicted or supplemented by evidence of prior statements or agreements. However, such statements or agreements may be used to interpret the writing.
CISG Art. 35 vs. SGA Art. 18 (Ramberg, International Commercial Transactions 1998 p. 18 and 88) Sale of Goods Act Art. 18: a particular provision which does not appear in CISG with respect to the information by the seller in his marketing or otherwise prior to the conclusion of the contract. If the goods do not conform with such information they are considered as non- conforming if the information has induced the buyer to enter into the contract. In case the information has not been given by the seller himself - e.g. by his supplier or trade organisation the seller might still have to take responsibility for the information but only if he knew or ought to have known about it. International Contracts 7 8
CISG Art. 35 vs. SGA Art. 18, Entire Agreement In order to avoid such responsibility for information given prior to the contract the seller has to specifically correct it. The provisions of the Scandinavian Sale of Goods Acts Section 18 have caused sellers to use their freedom of contract by explicitly stating that they are not responsible for such prior information. This usually takes the form of rather elaborate entire agreement clauses. Nevertheless, responsibility for the seller may occur either by setting aside or modifying such entire agreement clauses as unreasonable under the circumstances or, alternatively, by holding the seller responsible for disloyalty in connection with the conclusion of the contract (culpa in contrahendo). International Contracts 7 9
CISG Art. 35 vs. SGA Art. 18, Entire Agreement, Cont. In view of the particular provision in the Scandinavian Sale of Goods Acts art. 18there seems to be a considerable difference compared with CISG Art But that difference may be reduced if, in interpreting CISG Art. 35.1, regard is had to all relevant circumstances including the negotiations between the parties (cf Art. 8.3). International Contracts 7 10
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International Contracts 7 17 ICC International Sale Contract (Manufactured Goods Intended tor Resale) B. GENERAL CONDITIONS 1.2 Any questions relating to this Contract which are not expressly or implicitly settled by the provisions contained in the Contract itself (i.e. these General Conditions and any specific conditions agreed upon by the parties) shall be governed: A. by the United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention of 1980, hereafter referred to as CISG), and B. to the extent that such questions are not covered by CISG, by reference to the law of the country where the Seller has his place of business.