LAWS3328 Final: LAWS3328: Comprehensive Full Semester Notes
VIENNA CONVENTION
•VC does not cover transfer of property: art 4(b) – ownership relates to incoterm or domestic
law like SGA WA
•Convention has the force of law in WA – s 5 says the VC is part of WA law
•Convention prevails over any other law in force in WA to the extent of any inconsistency – s 6
says this is the preeminent law – prevails over the Sales of Goods Act 1895 (WA)
Art 1(1) - VC applies to contracts of sale of goods between parties whose places of business
are in different States:
a) when the States are Contracting States; or
b) when the rules of private international law (or conflict of law) lead to the application of the
law of a Contracting State
A Contracting State is a country that has signed on to the V convention
Place of business explained in art 10.
•Do not look at the nationality of the parties or commercial nature of parties: art1(3) – just
focus on location of buyer and seller
For there to be a relationship – we need to have a contract between a seller and buyer, which
exists if there is Offer and Acceptance: art 23
The offer is an offer if it is: art 14(1)
1. addressed to one or more specified person(s)
–limited to a group of ppl
–cannot be an invitation to the whole world
2. sufficiently definite
–need description; and
–the quantity that the person wants to offer; and
–price
oHowever, art 55 says if there is a MP, its fine if the price is not determined bc
the parties are assumed to want to trade at that particular price. The price will be
the prevailing market price. (Intention of Convention is to uphold contract)
3. indicates the intention of the offeror to be bound in case of acceptance
–offeror wants to be bound by his promise - art 8
–it is a binding promise ie definite promise is made
Art 14(2)
•A proposal other than one addressed to one or more specific persons is to be considered
merely as an invitation to make offers, unless the contrary is clearly indicated by the
person making the proposal.
Not an offer if:
•If info has just disseminated – no intention to be bound
•Eg: Pamphlets, brochures, catalogues, display of goods are these are merely
enticements/invitations to the recipients of the pamphlets to make an offer – the seller is
showing that they want to do business but the buyer has not made an offer – there is no
promise made; it is merely inviting
When is the offer effective?
•An offer is effective when it reaches the offeree: art 15(1)
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•Reaches when it is made orally (instantaneous) or delivered by any other means –
including personally, to place of business of the offeree or mailing address: art 24
•If an offer is sent through email, the offer reaches when e-mail enters mailbox of the offeree
and is ready to be read. Does not have to be read but theres an expectation that it will be
read soon.
Revocable and irrevocable offers
Two situations:
•art 16(2)(a) – offer can be fixed by time or otherwise eg valid till 1st May – know the offeror
cannot take back the offer – eg of situation where the offer is irrevocable bc the a fixed has
been placed
•art 16(2)(b) – when it is reasonable for offeree to rely on offer as being irrevocable and
offeree has acted in reliance of offer – no fixed time has been mentioned but the
wording/terms in the offer is clear that in enables the offeree to believe if he does
something, it cannot be taken back – timeframe is not mentioned but action is required by
the offeree. There is an indication by the offeror that if you do this, the offeror will not take
the offer back
•Two requirements for 16(2)(b). Indication that offer can be relied on and there has been
reliance. A form of estoppel arises. Eg seller has been asked price of monitor. Indicates
price. Buyer states that he will get back within 2 days as buyer has to purchase other
components. Once those components are bought, seller cannot revoke offer.
Can the offeror change his mind?
Under the CISG there a two chances for the offeror (buyer) to take back an offer
1. WITHDRAWAL (all offers) - art 15(2)
–Withdrawal applies when the offer has not yet reached the offeree (seller)
–Ie can withdraw the offer before offer reaches offeree
–Offeree does not even know theres an offer there – timing is before the offer reaches
–Any offer applies ie both revocable and irrevocable
2. REVOCATION (For revocable offers) - art 16(1)
–Only applies to revocable offers – does not apply to irrevocable offers so need to
figure out if the offer is irrevocable – an irrevocable offer can never be taken back -
irrevocable offer cannot be revoked
–Once the offer has reached, there is still an abiity to take back
–Ie can revoke an offer after offer reaches offeree but before acceptance is dispatched
Offeree’s response to the offer
1. Acceptance: art 18
–Offeree is happy with all the terms that the offeror has made and does not want to
change anything – there is absolute agreement
2. Modified acceptance: art 19
–Have to determine whether the change by the offeree is a material change or a minor
change
–Eg instead of the delivery being at 4 pm instead of 5 pm – this is a minor change so
we can consider it as a modified acceptance as to what the offeree wants
–However, changing the date from the 4th to the 5th is a major change. If there is a
significant material alteration ie something requires extra work, it is a rejection of the
original terms and the offeree now becomes the offeror bc either need to change
some terms (counter-offer) or need a new contract now as don’t want the old
contract (rejection)
3. Counter-offer: art 19
–Rejection of the original terms so the offeree becomes the offeror. Offeree is willing to
change (some of) the terms – still want to to business with the offeror (buyer) but the
seller (who is making changes to the offer ie seller becomes the offeror. Note offeror
is not the buyer here) wants to change some things
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4. Rejection: art 17
–Big fat no to changing the terms - don’t wanna do business with the offeror/buyer –
seller rejects the offer – outright rejection without new terms being mentioned
5. No response (by the offeree/seller)
–Might give hope to the offeror. Offeror cannot take silence as amounting to
acceptance by the offeree
Time for acceptance of offer: art 20(1) and (2)
•“Acceptance must be within 10 days” – offer must arrive at the buyers premises by the 10th
day
–Note that youre given 10 days – which is a fixed period so this becomes an
irrevocable offer
•Art 20(1):
–A period of time, for acceptance, fixed by the offeror in a letter begins to run from the
date shown on the letter or, if no such date is shown, from the date shown on the
envelope.
–A period of time, for acceptance, fixed by the offeror by telephone, telex or other
means of instantaneous communication, begins to run from the moment that the
offer reaches the offeree – from then on, seller has 10 days to accept the offer
•Art 20(2):
–Official holidays or non-business days occurring during the period for acceptance are
included in calculating the period ie if it says 10 days, then its 10 day, not 10 days
plus public hols. However, if a notice of acceptance cannot be delivered at the
address of the offeror on the last day of the period because that day falls on an
official holiday or a non-business day at the place of business of the offeror, the
period is extended until the first business day which follows – this is assistance given
to the offeree if there’s a public hols in the offerors country but normally offeree
should count consecutive days
•Time for acceptance runs from moment telegram handed in or from date shown on letter or
if no such date from date shown on envelope.
•If it is by instantaneous communication, time begins to run from moment offer reaches
offeree – from then on, seller has 10 days to accept the offer
•The offeree can ignore any worries about official holiday or non-business days are included.
– when it says 10 days, count holidays bc offeree doesn’t know when there are public hols
in the offerors country – days means days, not days plus hols
Situation where theres a public hols in the offerors country.
•But if ACCEPTANCE cannot be delivered in offeror’s country on the last day because of
official holiday or non-business day in the offerors country, period is extended until first
business day which follows. – this is assistance given to the offeree but normally offeree
should count consecutive days
Assent to an offer (statement or conduct)
•Assent means there’s an indication of agreement/acceptance to the offer that is made.
•Positive step required by words or other conduct
•18(1): A statement made by or other conduct of the offeree indicating assent to an offer is
an acceptance. Silence or inactivity does not in itself amount to acceptance: art 18(1)
–If there is silence but there is conduct, bc there is conduct, there could be assent –
there could be acceptance through the conduct
•18(3): If by
–virtue of offer (ie the offer has terms saying you can accept by doing something ie
offer itself says so); or
–as a result of established practices between parties (ie parties have done business
before and in previous contracts, the action by one of the parties amounts to
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Document Summary
A contracting state is a country that has signed on to the v convention. Place of business explained in art 10: do not look at the nationality of the parties or commercial nature of parties: art1(3) just focus on location of buyer and seller. For there to be a relationship we need to have a contract between a seller and buyer, which exists if there is offer and acceptance: art 23. The offer is an offer if it is: art 14(1: addressed to one or more specified person(s) Cannot be an invitation to the whole world: sufficiently definite. The quantity that the person wants to offer; and. Price: however, art 55 says if there is a mp, its fine if the price is not determined bc the parties are assumed to want to trade at that particular price. The price will be the prevailing market price. (intention of convention is to uphold contract)
