3. Effectiveness and Reaching

Art. 15(1) provides:

(1) An offer becomes effective when it reaches the offeree.

This provision is a consequence of the underlying principle of the CISG that declarations and other indications of intention only become effective if they reach the addressee. Other examples of provisions based on this principle are Art. 15(2) for the withdrawal of an offer, Art. 16(1) for the revocation of an offer, Art. 17 for the rejection of an offer, Art. 18(2) for the acceptance of an offer, Art. 20(1) for fixing a period of time for acceptance and Art. 22 for the withdrawal of an acceptance.

Art. 24 defines when a statement of a party reaches the addressee:

For the purposes of this Part of the Convention, an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have a place of business or mailing address, to his habitual residence.

Although the wording of the provision seems to restrict its application to declarations made pursuant to provisions of Part II of the Convention, it is also applicable to declarations made pursuant to provisions of Part III of the Convention. The reason is that Art. 24 also is part of the general principle mentioned before and therefore applies to all parts of the Convention via Art. 7(2). Examples for declarations Art. 24 also applies to are those made pursuant to Art. 47(2), 48(4), 63(2), 65 and 79(4). Further, Art. 24 applies to declarations with contents comparable to those expressly governed. Examples include declarations aimed at terminating or modifying a contract and declarations made to exercise a right to determine the contractually required aspects of the goods or modalities of payment after conclusion of the contract.

The idea behind the requirement of reaching is that on the one hand the addressee has to be put in a position where is is able to become aware of the declaration’s content while on the other hand the declaring party is relieved of any risks originating within the addressee’s sphere of organization. Thus, while a declaration obviously reaches the addressee where it actually becomes aware of the content, it is not generally required that the the addressee does become aware of the content.

Art. 24 distinguishes between two situations. First, if a declaration is made directly from one person to another person orally, the declaration reaches the addressee immediately. Such situations include face-to-face conversations, telephone conversations as well as online video chats or voice calls. In these situations, the declaring party has to react to any and all circumstances it becomes aware of that indicate risks of misunderstandings by inquiring the understanding of the addressee and if necessary repeat its declaration. Examples for such circumstances include hearing difficulties, lack of knowledge of the spoken language, or lack of attentiveness on the part of the addressee as well as technical connection difficulties. Where such risks of misunderstanding arise without the declaring party becoming aware of them the addressee has to make sure it understands the declaration correctly.

In the second situation, the declaration is not immediately perceivable by the addressee as it is transmitted via some kind of asynchronous form of communication like letter, fax, email, SMS but also answering machines for telephone or other means to record voice or video calls. Such declarations have become corporeal and thus have to be physically placed in the addressee’s sphere of control. This sphere of control is defined by Art. 24 in a hierarchical order: In the first place, the sphere includes the addressee personally. It also includes its place of business and its mailing address. Only subsidiarily, if the addressee does not have a place of business or mailing address, the sphere of control is deemed to include the addressee’s habitual residence. The idea behind this hierarchy is that merchants in general do not need to expect communications concerning their business to be addressed to their personal habitual residence.

This hierarchy also indicates that the declaring party has to chose a form of communication that the addressee expressly or impliedly associated to its business activities. With regard to electronic forms of communication that means that the addressee has to provide a business email address or a voice, video, or text messaging contact either on its business website or letter head or simply by using it to contact the other party on a professional level.

The notion of reaching also allocates the risk of all failures or issues regarding the transfer of a communication that occur within the organizational sphere of the addressee to the latter. Such failures include malfunctions of the addressee’s email server, illegible print-outs, failure to use software common in the addressee’s country and/or trade to access certain types of electronic documents. Also the determination of business hours falls within the organizational sphere of the addressee and thus has no impact on the point in time a declaration reaches the latter. Finally, the risk of properly understanding a declaration that is made in a language the addressee previously indicated to have command of also is part of its sphere of organization. Examples for such indications include using the language in previous communications, in the contract, or on one’s website or by being domiciled in a country where the language is officially spoken. Without such indication, however, the declaring party bears the language risk and consequently, a declaration made in a language the addressee does not understand does not reach the latter. While English is the common language of international trade there is no general presumption that every party all over the world has sufficient command of it to conduct business in it. Thus, even with regard to this world language an indication as described above is required. Yet, depending on the circumstances of the case the addressee might be under an obligation to notify the declaring party of its inability to understand the declaration and ask for it to be made in a feasible language.

Last modified: Thursday, 22 October 2015, 4:53 PM