D R HAB. F RYDERYK Z OLL, P ROFESSOR AT THE J AGIELLONIAN U NIVERSITY Formation of Contract

F ORMATION OF C ONTRACT 1. The concept of the offer Art. II. 4:102 DCFR How intention is determined The intention of a party to enter into a binding relationship or bring about some other legal effect is to be determined from the party’s statements or conduct as they were reasonably understood by the other party

F ORMATION OF C ONTRACT Art. II. – 4: 201 DCFR: Offer (1) A proposal amounts to an offer if: a) it is intended to result in a contract if the other party accepts it; and b) it contains sufficiently definite terms to form a contract (2) An offer may be made to one or more specific persons or to the public (3) A proposal to supply goods or services at stated prices made by a business in a public adevertismement or a catalogue, or by a display of goods, is treated, unless the circumstances indicate otherwise, as an offer to sell or supply at that price until the stock of goods, or the business’s capacity to supply the services, is exhausted

F ORMATION OF C ONTRACT Art. 14 CISG (1) A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicity fixes or makes provision for determining the quantity and the price. (2) A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to makes offeres, unless the contrary indicated by the person making the proposal

F ORMATION OF C ONTRACT Court of Appeal Clifton v. Palumbo [1944] 2 A11 ER 497 ( Beal/Hartkamp/Koetz/Tallon: Cases, Materials and Text on Contract Law, p. 179) Clifton wrote to Palumbo without legal assistance: „I am prepared to offer you my estate for £ I also agree that a reasonable and sufficient time shall be granted to you for the examination and consideration of all the data and details necessary for the preparation of the Schedule of Completion”

F ORMATION OF C ONTRACT Lord Greene: „(…) Therefore words like „agree”, „offer”, „accept”, when used in relation to price are not to be read necessarily as intention to make, then and there, a contract or an offer as the case may be. Whether they do or do not must depend entirely on the construction of particular document”

F ORMATION OF C ONTRACT Court of Appeal Bigg v. Boyd-Gibbins Ltd. [1971] 2 A11 ER 183 Beale and Others, Cases, p. 180 The Biggs wrote to Gibbins „As you are aware that I paid £ for this property, your offer of £ would appear to be at least a little optimistic. For a quick sale I would accept £ ”. In reply Gibbins wrote „I accept your offer”. He asked the family Biggs to contact his solicitors. Mr Biggs responded: „I am putting the matter in the hands of my solicitors. My wife and I are both pleased that you are purchasing the property”

F ORMATION OF C ONTRACT Judgment: Russel LJ: „…the defendants were correct in treating the first letter of 22 December 1969, as an offer to sell the property at £ when they wrote „I accept your offer”. Further then that, it seems to me that the last letter of 13 January is a recognition, an affirmation indeed, that the parties have come to agreement on the sale of the property”.

F ORMATION OF C ONTRACT Conclusions for the English Law (Beale and Others – Cases, p. 180 – 181) - Question whether a statement constitutes an offer depends on the objectively ascertained intention of the party making the statement. - The statement of a price by the seller is not decisive in determining whether he made an offer. - The use of the word „offer” is not decisive for determining the nature of the statement

F ORMATION OF C ONTRACT The French Law Cass. Com , Bull.civ. IV.74. JCP 1990.II – Beale and Others, Cases, p. 181 Facts (according to Beale and Others, Cases, p. 181): Mr Borde ordered certain equipment from Messers Hugin Sweda for the purposes of his business; that company had stated, in the general conditions of sale featuring in its order forms, that its offer did not become definitive, and did not constitute a binding commitement, until they were approved by it, and, moreover that an order would not be regarded as definite until it had been accepted by the company. Before his order was accepted by Hugin Sweda, Mr Borde changed his mind and withdrew it.

F ORMATION OF C ONTRACT Judgment (Beale and Others, Cases, p. 181) „Under Articles 1134 and 1583 of the Code Civil; whereas between traders, a proposal to enter into a contract constitutes an offer only if it states an intention on the part of the person making it to be bound by it in the event of its acceptance; Whereas in dismissing Mr Borde’s claim for repayment of the sum paid by him on account, the cour d’appel held that the order form constituted a firm purchase on the terms proposed by the Hugin Sweda and the clause appearing in that form constituted a condition having suspensory effect which was intended solely for the benefit of the vendor and which do not entitle the purchaser to withdraw from a sale which had been defintely concluded by agreement between the parties as to the subject –matter and the price; Whereas in so ruling, despite the fact that, by complying with the proposal contained in the order form Mr Borde had merely made an offer to purchase which he remained at liberty to withdraw until such time as the sale became definitive by acceptance on the part of the vendor, the cour d’appel infringed the legislation referred above. Homework: read the Case on p. 183, The Aeroplane Charter