1. Sufficiently Definite

The first requirement Art. 14(1)(1) contains is that the proposal has to be sufficiently definite. In its second sentence Art. 14(1) sheds some more light on this requirement:

A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.

The background of this requirement is that an offer that is accepted by a simple ‘agreed’ has to lead to a contract that is enforceable in court. To ensure enforceability the offer has to determine the minimum content or essentialia negotii. Notably, it is not required that the contract itself determines this minimum content expressly or impliedly. Rather, it is sufficient that the contract makes it determinable.

Under Art. 14(1)(2) the aspects of the minimum content are the goods sold, the quantity, and the price. Beyond the wording of this provision also the identity of the parties has to be determined. Further, certain types of contracts may require determination of additional elements in order for an offer to be effective. Finally, the parties can expressly or impliedly define certain elements as part of the minimum content.

Of particular peculiarity is the requirement of a fixed price. Art. 14(1)(2) expressly requires the price to be fixed for an offer to effective. Yet, Art. 55 reads:

Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

Art. 55 thus requires a validly concluded contract that does not contain a fixed price. What on first glance seems to be a nonsensical blatant contradiction can be made sense of by looking at the drafting history of the CISG. During the Vienna conference two fundamentally different concepts had to be squared with each other: on the one hand the concept of pretium certum, fixed price, and on the other hand the concept of a reasonable price under which the lack of a fixed price does not invalidate the offer but rather the price is determined by having recourse to the market price. Both concepts found their way into the CISG. In principle, the existence of Art. 55 does not affect the general requirement of a fixed price under Art. 14(1)(2). What makes coexistence of these concepts within one legal body possible is that under Art. 92 it is possible to adopt the Convention without its Part II, thus without Art. 14. In the past this had been done by the Scandinavian states. Yet, recently all of them withdrew their respective Art.-92-reservation. Also, by virtue of Art. 6 the parties are of course free to agree that their contract is binding without a fixed price, thereby derogating from Art. 14(1)(2) in this regard, and resort to Art. 55 for determining the purchase price.

Last modified: Thursday, 22 October 2015, 4:51 PM