Source: http://cisgw3.law.pace.edu/cisg/biblio/pperales.html
Timestamp: 2013-12-19 18:12:06
Document Index: 743693320

Matched Legal Cases: ['Art. 18', 'Art. 19', 'art. 336', 'art. 2', 'art. 19', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 14', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 4', 'art. 8', 'art. 19', 'art. 19', 'art.\n19', 'art. 19', 'art. 19', 'art. 19', 'art. 19', 'art. 19', 'art.\n19', 'art. 19', 'art. 7', 'art. 7', 'art. 19', 'art. 19', 'art. 19', 'art. 19', 'art. 7', 'art. 19', 'art. 7', 'art. 7', 'art. 18', 'art. 7', 'art. 14', 'art. 7', 'art. 19', 'art. 19', 'art. 19', 'art. 19', 'art. 19', 'Art. 19', 'art. 18', 'art. 18', 'art. 4', 'art.\n19', 'art. 19', 'art. 19', 'art. 19', 'art. 2', 'art. 18', 'art. 2', 'art. 19', 'art. 18', 'art. 55', 'art. 7', 'Art. 2601', 'in fine', 'Art.19', 'Art. 6', 'art. 9', 'art, 31', 'art, 21', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 2', 'art. 4', 'art. 5', 'art. 2', 'art. 2', 'art. 2', 'art. 7', 'art. 4', 'art. 2', 'art. 2', 'art. 7', 'art. 19', 'art. 19', 'art. 4', 'art. 9', 'art. 18', 'art.19']

Go to Bibliography Reproduced with the permission of the author and 10 Pace International Law Review (1998) 97-155
"Battle of the Forms" Under the 1980 United Nations Convention on Contracts for the International Sale of Goods: A Comparison with Section 2-207 UCC and the UNIDROIT Principles
Maria del Pilar Perales Viscasillas [*]
II.	"Battle-of-the-forms" methods of finding a solution to the conflict between clauses III.	General conditions as part of the contract
IV.	Battle-of-the-forms solution in accordance with rules of offer and acceptance: objections to last-shot doctrine A. It is an arbitrary solution because it tends to favor the person who sends his form
B. There can be bad faith ramifications
C. The results of the rule are too mechanistic and formal
D. It favors the "ping-pong" effect
V.	The knock-out rule: Section 2-207 UCC and Article 2.22 of the UNIDROIT Principles
1. Notice of non-conformity example
2. Arbitration example
3. Pricing example
A. Section 2-207 UCC
1. Analysis of UCC 2-207
2. Rules to determine the existence of the contract
3. Rules to determine the terms of the contract
a. When the contract has been concluded in accordance with UCC 2-207(1) b. When the contract is not concluded in accordance with UCC 2-207(1) B. The UNIDROIT Principles
1. Rules to determine the conclusion of the contract
2. Rules for determining the content of the contract
VI.	The solution to the battle of the forms under the rules of the Vienna Sales Convention
A.	The exclusion of the rules of Part II of the CISG
B.	The application of the general principles of the Convention
C.	The implicit exclusion of Article 19 of the CISG
D.	The partial application of Article 19 of the CISG E.	The search for uniformity: Articles 18 and 19 CISG
1.	Rules to determine the conclusion of the contract
2.	Rules to determine the content of the contract
VII.	The rules of the Vienna Convention, Section 2-207 UCC and the UNIDROIT Principles: a comparison
A.	Exchange of forms with terms that do not modify the offer materially
B.	Exchange of forms with terms that materially modify the offer
C.	An exchange of forms with contradictory terms, followed by performance
D.	Term included in the offer but not in the acceptance, followed by performance
E.	Term added in the acceptance but not in the offer, followed by performance
F.	Term added in the acceptance along with a "defensive clause"
G.	The offeror includes a "defensive clause" and the acceptor adds an arbitration clause
H.	Exchange of documents different from the forms
The United Nations Convention on Contracts for the International Sale of Goods, known as
the Vienna Convention of 1980 (CISG),[1]
is presently part of the law of approximately fifty
countries.[2] This wide acceptance by nations with vastly different social, legal and economic
systems demonstrates the considerable success obtained by the Convention. The reasons for
the wide approval of this text are many. In relation to its predecessor - The Hague
Conventions of 1964,[3]
and specifically the Uniform Law on Formation of the Contracts
(ULF), the Vienna Convention has emerged as a text with evident and substantial
improvements. These changes were implemented largely in response to criticisms of the
Hague texts.
During the CISG development process, many nations were represented. In contrast, only 62
nations participated in the Diplomatic Conference on the New Uniform Sales Law; 22 were
European or other developed Western States, 11 socialist, 11 South-American, 7 African and
11 Asian countries.[4]
Adopted by countries that account for over two-thirds of all world trade
in goods, a wide spectrum of legal cultures has made the CISG the law of the land: from developing countries to the developed, from free market economies to countries with planned
economies, and Civil as well as Common Law legal systems. A complex text was achieved through the participation of countries with varying legal,
economic and political systems. There was worldwide participation during the Diplomatic
Conference that lead to the development of the Vienna Convention. Hence, there was wide
support for the ratification of the final text. The CISG has overcome, not without difficulties,
many juridical obstacles encountered during the evolution of the text and in working toward
the goal of universal application. It is on the triple plane, however, of Civil Law/Common
Law conflict, economics (North-South conflict), and politics (East-West conflict), where the
most difficult debates took place during the Vienna Diplomatic Conference.
The greatest obstacles arose during the technical-legal confrontations between Common Law
countries and Civil Law countries.[5]
Part II of the Convention, dedicated to the formation of
the contract by offer and acceptance, is a typical place to find the practice of compromise
between the Civil Law and Common Law systems. The meeting point of these systems is best
described in an analysis of the formative problems of a contract. In the traditional analysis
of two declarations of will, offer and acceptance, there are also conflict divergencies that
seem, at first look, impossible to solve. In fact, Part II makes evident in many of its
dispositions a compromise between States with different legal principles: open-price contracts
(Articles 14(1) and 55 CISG);[6] revocability and irrevocability of the offer (Article 16 CISG);[7]
counter-offers (Article 19 CISG);[8]
and the receipt theory as the moment in which the
declarations of will, including the conclusion of the contract are effective (Articles 23 and 24
CISG).[9]
These Articles show a balance, in most cases, between the different principles which
form the basis of varying legal systems. This does not mean, however, that the formation rules
of the Convention are a just a patchwork of varying provisions. The drafters did not merely
appropriate Civil or Common law rules or rules common to different legal systems. On the
contrary, though the document shows some legal compromise, it nonetheless has emerged as
its own unique system. It was formed to facilitate ease of international commercial
interchange, based on the influence of developed trade practices and with the goal of
permanent application. Ultimately, the Convention provides its own autonomous
interpretation in accordance with the principles of uniformity, internationalism, and good faith
(Article 7 CISG).[10]
One of the most interesting problems in the study of Part II of the Convention is the conflict
between clauses of general conditions exchanged by the parties. The Vienna Convention
adopts a different solution than that contained in the law of the United States: Section 2-207
of the Uniform Commercial Code (UCC), and in the Principles of International Commercial
Contracts formulated by the International Institute for the Unification of Private Law, known
as UNIDROIT or the Rome Institute.[11]
The legal system of the United States, through its two most important recapitulations of
contractual matters, perfectly reflects the tension between classical contractual law,
represented by the Restatement and case law, and the criterion introduced by the UCC. The
Restatement of Contracts is part of a series of Restatements of the Law created by the
American Law Institute with the purpose of compiling general principles of the Common
Law. Although the Restatements are not law, they possess great weight in doctrine and case
law. After several modifications, the present text of the Restatement of Contracts,
accompanied by commentaries and examples, was published in 1981.[12]
Article 2 of the UCC,
on the other hand, contains sales law sections that can be the object of amendments by
individual states. The UCC has been adopted by all states, except Louisiana.[13]
The UCC is
accompanied by an Official Commentary,[14]
as is the Restatement. As indicated, the
Restatement has not been adopted by the states, but it nonetheless is of great significance. The
importance of the CISG's entry into force in the United States (and generally in all the States
that adopt it) is that the U.S. now has two codes related to sales contracts: Article 2 of the
UCC and the CISG. The former applies generally to domestic sales contracts, whereas the
latter applies to those international sales contracts that are within its scope of application
(Articles 1 to 6 CISG). The Principles of International Commercial Contracts prepared by UNIDROIT[15]
compared with the American Restatements.[16]
They are a set of Principles whose objective is
to provide a Uniform Code in matters related to international commercial contracts and were
clearly inspired by the Vienna Sales Convention. The section of UNIDROIT dedicated to the
Formation of International Contracts (Article 2), with the exception of some divergences,
parallels the Vienna text. This means that the UNIDROIT Principles should be interpreted by
taking into account the legislative history of the whole text of the Vienna Convention, without
that being an obstacle for a reciprocal influence between them. In other words, the
UNIDROIT Principles may be useful as a tool to interpret and integrate the Uniform Law.[17]
One of the most interesting issues in the UNIDROIT Principles is its relationship to the
Convention (since the Preamble states that the Principles may be used to interpret and
supplement other international texts), particularly in those circumstances where both texts
apply to a business transaction or when the CISG is silent on a specific issue which receives
an express solution in the UNIDROIT Principles. This is the case for the issue of battle of the
The fact that the Convention does not have a specific rule addressing the battle-of-the forms
issue, whereas the UNIDROIT Principles do, may suggest that the Convention does not
provide an answer to this problem. A national judge or arbitrator might therefore be tempted
to apply a solution, such as the one stated in UNIDROIT Principles Article 2.22, in
supplementation of the Convention.[18]
This situation could occur if the tribunal is unaware of
the objectives of the Convention and the legislative history of CISG Article 19 and thereby
permit themselves to be influenced by the aversion to applying the last- shot- rule by some
Convention scholars.[19]
It is important to point out that we are not dealing with a mere
academic issue, since there is an increasing tendency among arbitrators and judges to resort
to the UNIDROIT Principles,[20]
even in cases of transactions which are silent about them .[21]
In the context of the three texts considered: the CISG, the UCC, and the UNIDROIT
Principles, we analyze the fact pattern that is the object of our present study: the battle of the
II. "Battle of the Forms" Methods of Finding a Solution to the Conflict Between
There are two general categories of "battle-of-the-forms" transactions. One category, where
thousands of transactions proceed satisfactorily despite unresolved conflicts in their terms[22]
and alternatively, a dramatically smaller number of such transactions in which the conflict is
resolved under an applicable legal regime. Litigation of conflicts between clauses contained in forms that the parties exchange do not
arise frequently;[23]
however, when they do it can be very difficult to resolve. The international legal community has not yet found a satisfactory way to decide what terms
control in an agreement when a transaction is consummated on the basis of a routine
exchange of inconsistent forms.[24]
The battle-of-the-forms problem may be solved in basically two ways that are dictated by the
performance of the contract. Generally speaking, the two solutions include the application of
either the classical pattern of two declarations of will (offer and acceptance), or the
understanding of formation of a contract through its performance, even though the content
of the contract is incomplete. The conflict between forms creates the question: Is there a
contract, and what are its terms? There is an approach that requires perfect identity between
the contents of two declarations of will. Strictly applied, this would lead to the non-existence
of the contract. This approach should be rejected, however, especially where there are acts
of performance that indicate acceptance to an offer, the existence of a contract, and its
conclusion. One other alternative to resolve battle-of-the-forms issues is a good faith
principle. This results in a neutral solution, preventing either party from gaining an advantage
by being the first or the last to send a declaration of will. These two main approaches (offer and acceptance or performance) are based on opposite
assumptions: that the parties read and understand the contents of each other's forms, or that
pre-printed forms are not read. In the latter case, a contract could be determined to be
concluded by the existence of an agreement on the essential terms, even though there remain
some terms that are contradictory. In this way, by the use of flexible standards, one avoids
inconveniences caused by the last-shot rule, a rule that favors contractual terms of a party
who acts last.
Few commentators of the Convention study the conflict of forms from the perspective of the
legislative politic that it purports to protect.[25]
This is important and would prevent, in some
situations, searching for a solution to a conflict through the dispositions of some Codes,
fundamentally to Section 2-207 UCC,[26]
or the German legal practice.[27]
Those texts have a
different orientation than the Convention, which opted for the objective of achieving uniform
application, certainty, and legal security. One should not ignore, however, the other option. It is not a solution to be ignored, although its rejection by the Convention was probably
influenced, in large part, by the extensive criticism that Section 2-207 UCC has received. In
our opinion, as explained in the accompanying analysis, there are more weighty reasons to
support the solution adopted by the Vienna text. It is not to suggest that the other option is
technically incorrect or an option legally perverse;[28]
on the contrary, it is adequate to protect
the specific interests that a legal system seeks to preserve. Definitively, it is a valid and
defensible belief, and a legal norm, to understand that forms are often ignored. It is also valid,
however, to support the opposite theory. Therefore, the Convention sought to encourage,
by means of a legal disposition, the reading of the forms and the discussion of the contract
clauses: purposes that the Vienna legislators clearly wanted to protect.
The accompanying analysis explores, in detail, the process used to solve battle-of-the-forms
issues. The first section reveals the methods used to introduce general conditions to the content of
the contract (infra III). The next section surveys the principal criticisms of applying offer and
acceptance rules to the battles of the forms (infra IV). Section Five examines Sec. 2-207
UCC as an example of a legal regime which applies the control of contents to resolve the
conflict between clauses (infra V.A), as well as the solution adopted by the UNIDROIT
Principles (infra V.B) and concludes with the solution regarded as most appropriate.
III. General Conditions as Part of the Contract Although the Vienna Convention has no express rule on making general conditions a part of
an agreement, guidance is provided in its rules on autonomy of the parties (Article 6), the
determination of the intent of the parties (Article 8), and on the significance of usages and
practices (Article 9).
We have for many years become accustomed to having certain general conditions as part of
a contract through the application of INCOTERMS and UCP 500,[29]
where incorporation by
reference is usually practiced. New technology EDI (Electronic Data Interchange),[30]
incorporation by reference is usually practiced adds to the importance of this subject.[31]
every case, the incorporation by reference must be express or implied; and where implied, it
must be derived from usages or from practices established between the parties.[32]
three ways of incorporating general conditions in the contract: 1) by an exchange between the
parties (Articles 14(1) and 18(1) CISG),[33]
that is to say, the conditions are recited in a form
that serves as an offer or an acceptance or that is enclosed with either declaration; 2) by the
practices or previous negotiations established between the parties (Articles 8(3) and 9(1)
CISG);[34]
a clear example is where a party sends a document in which general conditions are
reproduced and later, in the offer or the acceptance, there is a suitable reference to them; 3)
finally, there can be general conditions which reflect a usage of trade of the kind described in
Article 9(2) CISG.[35]
In each case, the general conditions must be incorporated expressly (or impliedly, as stated
before) and previously or at least at the time of the conclusion of the contract.[36]
IV. The Battle-of-the-Forms Solution in Accordance with the Rules of Offer and
Acceptance: Objections to the Last-Shot Doctrine
Following are two illustrative applications of the rules of offer and acceptance and the last
shot doctrine. First, buyer sends seller his form (offer to buy); seller replies with his form
which contains material modifications (counter-offer); seller dispatches the goods which are
received and accepted by buyer. This acceptance of goods is regarded as an acceptance by
the buyer of the terms contained in seller's form. Second, seller makes an offer to sell by
sending his own form; buyer replies with his form which contains material modifications
(counter-offer); seller dispatches the goods. This dispatch of goods is regarded as an
acceptance by the seller of the terms contained in buyer's form.
A question always present is whether the inclusion of general conditions in the reply to the
offer is, by itself, a material modification.[37]
Each case must be examined in the context of the
transaction by comparison of the reply to the offer and the terms of the offer.[38]
A fundamental question is whether a valid conclusion of a contract can be assumed when the
forms exchanged contain incompatible or contradictory terms. The answer, in accordance
with the offer-acceptance pattern (last-shot doctrine), is clear: the contract is concluded,
either when one party, by express declaration, accepts the form sent by the other party (an
exceptional case) or when there is a suitable act of performance by the recipient of the
counter-offer in accordance with (Art. 18(1) or (3)[39]
read in conjunction with Art. 19
CISG).[40]
The last shot method of solving battle-of-the-forms issues has been subject to wide criticism,
including the following: A. It is an arbitrary solution because it tends to favor the last person who sends his form
Application of the "offer-acceptance-counter-offer" last shot doctrine is criticized because
it is said to favor the seller. Consider the following scenario: The buyer (offeror) sends his
form (e.g., a purchaser order) to the seller (the offeree in this case) who responds with his
own form (e.g., an acceptance form), which in all likelihood contains clauses that contradict
stipulations in buyer's purchase order. These contradictory clauses are deemed accepted at
the time buyer accepts the goods sent by the counter-offeror (the seller). Under this scenario,
by applying the last shot doctrine, the contract is concluded by an act of performance (buyer's
acceptance of the goods) and the terms that will control the content of the contract will be
those of the counter-offer or the seller's form.[41]
There are two aspects to the criticism of this result: a) the favored protection given to the
party who sends its form last, ordinarily the seller; and b) the vulnerable position of the buyer;
if the seller does not send the goods the contract will not be concluded, while if buyer accepts
the goods, he will have impliedly accepted the terms contained in the seller's form.
Consider the intended sale and purchase of a commodity in a price-volatile market. Forms
exchanged which are materially inconsistent because either a term is added to the offer or
there is a limitation upon a term contained in the offer, results in an application of the
mirror-image rule (Article 19(1) CISG) under circumstances in which the primary objective
of the party applying this rule is to escape the consequences of a change in market
conditions.[42]
It has been said that the comparison between forms may produce in judges and arbitrators a
kind of apathy in searching for solutions that may mitigate the rigidity of the mirror image
rule. This criticism, however, is unfounded since case law illustrates that the opposite is true.
Proof of this is found in the jurisprudential evolution of case law in countries such as France
and Germany, as well as Spain. Although, initially, there was a rigid application of the rule,
it has finally been relaxed sufficiently to allow a difference between material and non-material
terms.[43]
This new direction of the mirror-image rule seems to be forgotten by its opponents.
A positive effect of the last-shot rule is it generally permits easy application in practice as a
result of the willingness of both parties to recognize which declaration was the last one and,
therefore, controls the contract terms. This, however, leads to a "ping-pong" type effect
because each party, knowing the effect of the rule, can try, by all means, to have its form be
the final form, thereby increasing the already burdensome volume of paper work that flows
between the parties. Such behavior -- more appropriate in a tennis game than in real business -- is anti-economical
and places more of a premium on routines (matter of form) than business realities (matters
of substance).
V. The Knock-Out Rule: Section 2-207 UCC and Article 2.22 of the UNIDROIT
Section 2-207 UCC and Article 2.22 of the UNIDROIT Principles both try to solve the
conflict between clauses based on the assumption that contract forms are not read by the
parties. Both provisions attempt to overcome the inconvenience and the rigidity of the
mirror-image rule and the last-shot doctrine.
Both provisions are regarded as having a neutral effect since both mandate that neither party
can impose clauses that, being contradictory, have not been agreed upon. The UNIDROIT
Principles and the U.C.C. adopt a knock-out approach, with the UCC's variant more difficult
to understand and apply. Both the Principles and the UCC seek to enforce clauses in
exchanged terms and conditions that do not contradict one another, as does the Vienna
Convention. Where there are "material" differences, however, their approach differs from that
of the Convention. For example, if the inspection clauses contained in buyer's and seller's
terms and conditions are identical in almost all aspects, but contain a difference that is
regarded as material, the intent of the Convention is to enforce either the buyer's version or
the seller's version, whereas under the UCC and the Principles, the intent is to enforce neither.
Under the Principles and the UCC, the conflicting terms of the seller's version and the buyer's
version are knocked-out; and a new version of the clause is substituted as derived from the
applicable governing law.
There are artificialities associated with both the knock-out rule and the last-shot doctrine.
Because it does not enforce solely the last-shot, the knock-out rule is a neutral approach, but
it can at times significantly undermine the intention of the parties and the bargain it is intended
to strike. 1. Notice of non-conformity example
Assume a conflict between clauses: one states that the period to give notice for the lack of
conformity of the goods is two months, the other indicates that the period is two months and
fifteen days. When one applies the knock-out rule, the contradictory clauses cancel each other
and the notice rule under a domestic regime is therefore substituted. Under many regimes the
statutory notice period can be much shorter than the period provided in either of these
clauses. For example, the Spanish Commercial Code provides for only a 4-day notice period
(art. 336 Spanish Commercial Code, for apparent defects). Such an application of the
"neutral" knock-out rule would seem to go against the will of both parties. Under the Vienna Convention, the notice period recited in Article 39(1) is a "reasonable
time." Even so, many courts have construed this narrowly.[44]
Thus, even under a regime that
calls for notice within it could lead to unfair results.
Consider a case where the both parties agree to arbitration but each has a different arbitration
clause, perhaps with discrepancies as to the place where the process will take place or other
circumstances relative to the arbitration. In this case, it seems clear that from a strict
application of the knock-out rule, the dispute would be tried before national courts.[45]
Assume goods are offered at a price lower than customary market prices, with the lower price
arrived at because the goods are accompanied by a restricted warranty that is phrased
differently in the parties' clauses. This is a case in which an application of the knock-out rule
that invokes a statutory warranty can also change the character of the intended bargain. A
neutral knock-out rule may seem to be fair when at times it is not. These examples illustrate instances in which the last-shot doctrine -- despite its apparent
severity -- can be preferable to the knock-out rule; in fact, the apparent severity of the former
may do a better job of calling to the attention of the potentially aggrieved parties the
importance of resolving, in advance, conflicts between competing clauses.
In Common Law systems, there are major differences in the resolution of problems caused
by discrepancies in conditions that accompany offers and replies. The English legal system
follows the classic conception of the Common Law, whose bastion is the mirror image rule.[46]
The United States legal system, on the other hand, only partially follows the dictates of the
mirror image rule.[47]
Under the U.C.C., where there is a conflict between clauses contained
in exchanged terms and conditions, the mirror image rule is displaced by the rule recited in
Section 2-207 UCC.[48] This is a somewhat complicated provision, which creates some
contradictions among the courts.[49]
"2-207 UCC: (Additional Terms in Acceptance or Confirmation).
"(1) A definite and seasonable expression of acceptance or a written confirmation
which is sent within a reasonable time operates as an acceptance even though it
states terms additional to or different from those offered or agreed upon, unless
acceptance is expressly made conditional on assent to the additional or different
"(2) The additional terms are to be construed as proposals for addition to the
"(3) Conduct by both parties which recognizes the existence of a contract is
sufficient to establish a contract for sale although the writings of the parties do not
otherwise establish a contract. In such case the terms of the particular contract
consist of those terms on which the writings of the parties agree, together with any
supplementary terms incorporated under any other provisions of this Act."
UCC 2-207 has not provided the panacea it was intended to bring. One commentator has
stated as follows: "After nearly 40 years of experience with the section, the only thing clear
about the section is that it remains unclear . . . a section that raises as many questions as it
answers."[50]
Another commentator stated: "The section has become an enigma;" "There
should be no doubt that 'chaos' is an accurate characterization of the state of law in the
'battle of the forms' arena."[51]
Its defects derive "partly because of the numerous situations
it was designed to address and the many more it has been used to address, and partly because
of a judicial reluctance to apply the statute too literally."[52]
It is said that the mirror image rule brings more positive effects than the rule established by
Section 2-207 UCC.[53]
Against this background, it is not surprising that the delegates to the
Vienna Diplomatic Conference were reluctant to have the CISG pattern its approach after the
UCC.[54]
It is also not a surprise that Section 2-207 UCC is one of the main scapegoats of the
serious consideration that is being given to revisions to Article 2 UCC.[55]
1. Analysis of Section 2-207 UCC
Section 2-207 UCC seeks to have parties avoid escaping obligations due to incompatibility
of the terms and conditions they exchange. What is considered a counter-offer under the
Vienna Convention as well as most other legal regimes is often treated as an acceptance under
the dictates of Section 2-207 UCC. However, in spite of the flexibility of this section, it is not
so innovative as to allow the contract to be formed without the existence of the basic element
of agreement under all legal systems. This basic element is the objective manifestation of
mutual assent that is translated into agreement of the parties on the essential terms, which in
the United States is a sufficient description of the goods and quantity. When an agreement on
these elements exists, the contract is concluded. If the forms are inconsistent in other respects,
the knock-out rule will be applied; coinciding clauses of the forms will become part of the
contract, contradictory clauses are knocked out; and knocked-out terms are supplied by the
governing applicable law. The vision which the UCC follows is that buyers and sellers do not
read with sufficient attention the boilerplate clauses of the forms they receive.[56]
responds to this problem by "knocking-out" such clauses when they contradict one another.
With the objective of overcoming the last-shot doctrine and, in the process, changing the
traditional balance of power between the offeror and the offeree, where the offeror is the
master of his offer,[57]
the drafters of Section 2-207 UCC regulated three situations. First,
conditional acceptances; second, written confirmations which have an additional term; and,
finally, the battle-of-the-forms. This regulatory scheme answers the questions of whether a
contract exists and, if so, what are its terms. The UCC approach divorces the formation of
the contract from questions relating to its terms, once the basic requirements for the existence
of a contract has been satisfied.
Subsection (1) of Section 2-207 UCC regulates questions concerning the existence of the
contract. It provides the general rule that a definitive and seasonable expression of acceptance
concludes the contract, even though it contains terms that are additional or different from the
terms offered. The contract is formed, in this way, avoiding the mirror-image rule (under its
mandate a reply with additional or different terms will not be considered an acceptance, but
rather a counter-offer). Moreover, the corollary to the mirror-image rule, the last-shot
doctrine is inverted, setting in place a type of first-shot doctrine, to achieve the neutral
composition of the contract, it is often modified using subsection (3), as a way of escape.[58]
This general rule comes with an exception,[59]
provided for in the language after the comma in
subsection (1). By this proviso, a reply to an offer that contains additional or different terms
will not be deemed an acceptance if the reply has been expressly made conditional upon assent
to these additional or different terms by the offeror. The effect of such a declaration is to
invert the general rule initiated by the section and return to the traditional rule that regards
such a reply as a counter-offer. This exception has created problems of interpretation particularly where the language used
by the offeree may not be sufficiently clear. One of the first cases which addressed this issue
was Roto-Lith, Ltd v. F.P. Barlett & Co.[60]
In this case, the court ruled that the reply to the
offer modified it so materially that it was considered a counter-offer. This ruling has been
sharply criticized by virtually every commentator to consider it. It is said that the Roto-Lith
case followed the dictates of the traditional rule without being able to assimilate the new
approach of Section 2-207 UCC. For this reason, one commentator[61]
objects to Article 19
CISG as it follows this Roto-Lith doctrine, which U.S. courts have since abandoned.
Subsequent U.S. decisions indicate that for the acceptance to be clearly and expressly made
conditional, it is best to track the language of the statute.[62]
There are three circumstances in which a definitive declaration of acceptance will not be
deemed to exist. The contract will not be considered concluded under Section 2-207(1) UCC
if the reply to the offer is expressly and clearly made conditional on assent by the offeror,
when the reply may be considered to alter the offer in a material way;[63]
or when the reply does
not recognize the intention to conclude a contract in conformity with Section 2-204 UCC.[64]
Section 2-207(2) addresses the subject of "additional terms" contained in the reply and when
such terms become part of the contract. Section 2-207(2) recognizes contracts established by
acts of performance and concludes with the UCC's rendition of the knock-out rule: "[Where]
the writings of the parties do not otherwise establish a contract . . . the terms of the particular
contract consist of those terms on which the writings of the parties agree together with any
supplementary terms incorporated under other provisions of this Act."[65]
The section 2-207(3) UCC knock-out rule appears to apply only when the contract could not
be deemed concluded in accordance with subsection (1). This section provides that when
contract conclusion cannot be derived from the forms exchanged, but there is subsequent
conduct by the parties such as acts of performance, this will lead to the conclusion that the
contract exists.
Where it is determined that the contract has been concluded, the next fundamental question
is what are its terms? The division of questions over the conclusion of the contract and the
contents of the contract building from the term's agreement is a logical consequence of the
UCC's desire to overcome the inconvenience of the mirror-image rule and the last-shot
doctrine. Since it is useless to regard a reply to an offer with discrepancies as an acceptance
without determining the contents of the resulting contract. We must discuss two UCC
subsections that follow UCC 2-207(1).
3. Rules to determine the terms of the contract a) When the contract has been concluded in accordance with Section 2-207(1) UCC
When the contract has been concluded in accordance with subsection (1) of Section 2-207
UCC, subsection (2),[66] provides us with rules for incorporating in the contract "additional"
terms contained in the reply to an offer. Additional terms are to be regarded as proposals for
additions to the contract which, subject to three exceptions, automatically become part of the
contract in a transaction between merchants. Subsection (2) is one of the most difficult part
of Section 2-207 UCC to understand, and has aroused much controversy.[67]
subsection (2), subsection (1) considers as acceptances declarations with additional or
different terms.[68]
Subsection (2), however, only refers to additional terms, raising questions
as to the regulation of an acceptance which has terms different from those contained in the
offer. Whether or not this omission was deliberate is uncertain.[69] The Official Comment on
this section seems to support both views. Comment 3 points in one direction, while Comment
6 points in another direction, as it neglects to refer to different terms. Faced with this
situation, scholars have developed conflicting theories that are indistinctly supported by the
case law: a) to include different terms in the regulation of subsection (2), so they will become
part of the contract; or b) to opt for the opposite solution and, as a result, different terms will
not be regulated by subsection (2). There then arises the question of the regulation of such
terms. Professors White and Summers disagree with one another. White, relying on Official
Comment 6 applies subsection (3) (knock-out-rule). Professor Summers, on the other hand,
holds that Comment 6 refers exclusively to written confirmations. In Summer's opinion,
different terms in an acceptance are excluded from the contract;[70]
therefore, the offeror's
terms prevail.
An analysis of subsections (1) and (2) of Section 2-207 reveals that there are rules for
situations; (1) when the offeree includes in his declaration is an acceptance; and (2) between
merchants require that additional (or different) terms are deemed part of the contract by mere
silence. This conclusion is derived from the fact that subsection (2)(c) indicates that the
notification of an objection to the inclusion of such terms prevents their automatic
incorporation to the contract. Therefore, a contrario, the mere silence of the offeror means
an automatic acceptance.
The above rules are subject to two exceptions:
1) When the offer expressly limits acceptance to its terms. The reply to an offer conditioned
upon acceptance of all its terms (subsection (1)) and the offer conditioned upon its total
acceptance (subsection (2)(a)) are not treated the same. In the first case, the acceptance
conditioned in that way is deemed a counter-offer. Where courts are reluctant to put this
under the scheme of the last-shot rule, the counter-offer is accepted by acts of performance
and the terms of the contract will be those of the last declaration. They usually turn to the
knock-out rule regulated by subsection (3). In the second case, the additional (or different)
terms of the acceptance are not incorporated in the contract, so the contract is composed of
the terms of the offer, unless the offeror expressly assents to inclusion of the additional (or
different) terms proposed by the offeree. 2) Additional (or different) terms that materially[71]
alter the offer. The terms are not deemed
incorporated in the contract,[72]
and vice versa, if the terms are considered non-material, they
become part of the contract. In contrast with Article 19(3) CISG, which contains a useful
guide to delimit what is a material change of the offer�s terms, the UCC says nothing on this
subject. A result has been abundant litigation. In spite of Official Comment 4, which indicates
that an alteration is material if incorporated without express awareness by the other party resulting in surprise or hardship for him. Some examples are a clause negating such standard
warranties of merchantability, and those requiring a shorter period for complaints than usual.
Comment 5 points out as well examples of material alterations: a clause setting forth and
perhaps enlarging slightly upon the seller�s exemption from liability due to supervening
clauses beyond his control, and so on.[73]
b) When the contract is not concluded in accordance with Section 2-207(1) UCC
In all the circumstances, in which, in accordance to subsection (1), the contract is not
concluded, but there is some kind of conduct (generally acts of performance of the contract)
that indicate its existence, the last subsection comes into play. Subsection (3) examines the
hypothesis in which the exchanged forms -the writings of the parties- do not establish the
contract, but the contract is established by their conduct. Applying the knock-out rule, the
contract is composed of the terms from which one can derive a common will, and terms
determined in reference to the rules contained in other provisions of the UCC. B. The UNIDROIT Principles
In general, the Formation provisions of the UNIDROIT Principles take as a model Part II of
the 1980 Vienna Sales Convention. However, the Principles approach to the battle-of-the
forms is different from that of the Convention. Article 2.22 states that:
"Where both parties use standard terms and reach agreement except on those terms, a
contract is concluded on the basis of the agreed terms and of any standard terms which are
common in substance unless one party clearly indicates in advance, or later and without
undue delay informs the other party, that it does not intend to be bound by such a
contract."[74]
UNIDROIT art. 2.11 entitled "Modified Acceptance" corresponds to CISG art. 19(1) and
(3). However, the UNIDROIT does not apply to the battle-of-the-forms scenario. In this
regard, the UNIDROIT considers the application of UNIDROIT art. 2.11 would lead to the
application of the last-shot rule. This shows that the norms of UNIDROIT Chapter 2 could
be used, but the drafters have chosen to adopt another regulation. In fact, the drafters
recognize the possible application of the last-shot-rule when the parties clearly indicate that
the adoption of their standard terms is an essential condition for the conclusion of the
contract, but not if the parties have made a mechanical reference to the standard terms,
unaware of the conflict between their respective standard terms.[75]
The UNIDROIT starts from the presumption that the forms are not read, and it is not
appropriate to build into the contract terms not agreed upon. UNIDROIT art. 2.22 seeks to
foster the objectives of UCC � 2-207 to overcome last shot theories by searching for a neutral
solution where only the agreed terms of the forms become part of the contract, and not those
which are not agreed on. Therefore, the UNIDROIT adopted a knock-out rule.[76]
UNIDROIT art. 2.22 and other provisions of the UNIDROIT regulate the two basic
questions affecting the battle of the forms, "Is the contract concluded?" And if so, "What are
the terms?"
The rule recited in UNIDROIT art. 2.22 applies to an exchange of forms between the
parties.[78]
If only one of the parties uses a form, this rule will not be applied because
UNIDROIT art. 2.22 clearly restricts its application to the situation in which "both parties
use standard terms." According to article 2.19,[77] the general rules on formation of the
contract will become applicable, as well as those rules dedicated specifically to standard
clauses, except UNIDROIT art. 2.22. There must also be differences between some or all
of the standard terms exchanged by the parties and an agreement on at least the essential
terms of the contract. The need for agreement on at least the essential terms comes from
UNIDROIT art. 2.19 and the rest of Chapter 2, which leads to the straight application of
UNIDROIT art. 2.2 which, as a parallel to CISG art. 14(1), demands the intention of the
offeror to be bound in case of acceptance, as well as in the case of an offer sufficiently
definite. In every case, if the indicated conditions are satisfied, the contract is deemed to be
concluded. The application of the UNIDROIT results by virtue of a presumption that the parties have
agreed on the essential terms, and existing discrepancies around some standard terms may
be rebutted. The parties may exercise either of the two options. First, one party clearly[79]
communicates, after the conclusion of the contract, without undue delay, his intention not to
be bound to the contract (right to an immediate avoidance of the contract). Second, before
the conclusion of the contract, one of the parties declares the same intention. This implies an
obligation of an immediate indication of acceptance. It is important to understand that the
general rules of the formation of the contract are completely operative. Therefore, it is
necessary that the standard terms be accepted by the other party. There is a presumption that
the standard terms on both forms, which are not common in substance, have not been
assented to. Therefore, they are displaced in accordance with the rules for determining the
content of the contract.
Agreed essential terms become part of the contract. Where there are standard terms that are
common in substance, these terms become part of the contract. Common in substance
includes clauses which in their essential aspects, either by content, or by finality, may be
considered as equally satisfying the interests of both parties. Where there is disagreement
about some clauses, the knock-out rule is applied, cancelling contradictory clauses and
excluding those, which even though are not contradictory, alter the terms of the offer or the
acceptance. Where there are no material alterations, UNIDROIT art. 2.11 will apply. The
acceptance which contains non-material variations is deemed part of the contract. Variations
that materially alter the offer may be deemed mutually excluded in accordance with
UNIDROIT art. 2.22. In case of conflict between a standard term and a term which is not
a standard one, the latter prevails (UNIDROIT art. 2.21)[80] as the most likely reflection of the
intention of the parties.[81]
Standard terms whose content[82]
or language, whether material or
formal,[83]
are of such a character that the other party could not reasonably have expected
them, do not become part of the contract (UNIDROIT art. 2.20, Surprising Terms).[84]
Criteria of interpretation are provided in the second paragraph of this article. To determine
whether a term is of such a character content, language and presentation shall be considered. There is no general rule under the UNIDROIT permitting a court to strike an unconscionable
contract term.[85]
Finally, the interpretation of the standard terms does not follow the general
rule set forth in UNIDROIT art. 4.1 on the interpretation of the intention of the parties
(similar to CISG art. 8(1) and (2)). The standard terms will be interpreted, considering their
special nature and purpose, in accordance with the reasonable expectations of the average
users of standard terms and conditions.[86]
VI. The Solution to the Battle of the Forms under the Rules of the Vienna
Several interpretative approaches have been applied to the Vienna Sales Convention
("Convention"), which clearly destroy the principle of uniform application of the rules of the
Convention. These theories include that the Convention simply does not apply to the
battle-of-the-forms, the application of general principles of the Convention in lieu of its
specific provisions, the implicit exclusion of CISG art. 19, and the partial application of CISG
art. 19. Finally, this article will analyze the rules of Part II of the Convention and the manner
in which these rules fit the conflict of standard terms. In our view, the Convention rules are
thorough enough to solve the battle-of-the-forms conflict. The battle of the forms is the
central focus of this article because it is one of the most controversial aspects of CISG art.
19. It is controversial because its application to the classical situations, where an offer and
an acceptance are not contained in forms, is not in doubt.
The text of CISG art. 19[87]
is as follows: "A reply to an offer which purports to be an acceptance but contains additions,
limitations or other modifications is a rejection of the offer and constitutes a
counter-offer;[88]
"(2) However, a reply to an offer which purports to be an acceptance but contains
additional or different terms which do not materially alter the terms of the offer
constitutes an acceptance, unless the offeror, without undue delay, objects orally to
the discrepancy or dispatches a notice to that effect. If he does not so object, the
terms of the contract are the terms of the offer with the modifications contained in
the acceptance;[89]
"(3) Additional or different terms relating, among other things, to the price,
payment, quality and quantity of the goods, place and time of delivery, extent of one
party�s liability to the other or the settlement of disputes are considered to alter the
terms of the offer materially.[90]
According to CISG art. 19(1), the reply to an offer which does not match exactly with the
terms of the offer is a rejection and constitutes a counter offer. This paragraph states the
traditional principle known as the mirror image rule. CISG art. 19(2) seeks to relax the rule
recited in CISG art. 19(1). It carves out from the CISG art. 19(1) rule additional or different
terms which do not materially alter the terms of the offer. The dividing line between a material
and a non-material alteration is of great importance because only the latter constitutes an
acceptance. Nevertheless, it can sometimes be difficult to draw the line, despite the CISG art.
19(3) list of examples. This list is non-comprehensive because it contains the expression
"among other things" reinforced by the phrase "are considered to alter the terms of the offer
materially."[91]
A. The exclusion of the rules of Part II of the CISG
Some commentators believe that the battle-of-the-forms problem is not solved by the rules
of the Convention and, therefore, the regulation of the battle of the forms must be found in
the applicable domestic law.[92]
This article asserts that the conflict between terms is regulated
by the norms dedicated to the offer and acceptance in the Vienna Convention. The forms
exchanged, although long and preprinted, are offers, acceptances and counter offers[93]
legislative history of CISG art. 19 leads to the same conclusion. During the task of revising
the rules on formation contained in the ULF, it was proposed that a new paragraph be added
to ULF art. 7 which attempts to find an acceptable solution to the contradiction between
clauses. In spite of the complicated writing of this proposal, it was considered that it dealt with a
practical problem and provided an acceptable solution. However, the Working Group
decided to reject the proposed paragraph because if an acceptance contained any material
alterations to an offer, it should constitute a rejection of that offer, whether those material
alterations were in the printed or in the non-printed terms of the acceptance.[94]
view that all the clauses of a contract should have the same value, the proposal was rejected. Therefore, the conflict between terms should not be solved by giving preference to written
terms over printed terms. Instead, the conflict should be solved with the general rule of ULF
art. 7, which requires a material agreement between the terms of the offer and the acceptance.
In the last stage of the legislative process of the Convention, during the Vienna Diplomatic
Conference, the Belgian delegation proposed to add a new paragraph to Article 17 of the
1978 Draft Convention (subsequently CISG art. 19). The text of the proposal sought to
explicitly regulate the content of the contract when a battle of the forms exists. The text of
the proposal which was ultimately rejected was as follows: "When the offeror and the offeree
have expressly (or implicitly) referred in the course of negotiations to general conditions the
terms of which are mutually exclusive the conflict clauses should be considered not to form
an integral part of the contract."[95]
The delegates seemed to agree that the proposal could not be discussed in such an advanced
stage of the text of the Draft Convention. Additionally, some representatives strongly
opposed the amendment, asserting that the amendment was contrary to the law of contracts. Additionally, they believed the question was solved by the text of the Draft Convention.[96]
This amendment proposed by Belgium does not mean, as some scholars state, that the battle
of the forms is a gap in the Convention. On the contrary, it shows that a different solution
to the one in CISG art. 19 was proposed, without success. From the legislative history one
can readily conclude that the battle of the forms is regulated by the Vienna Convention rules
on formation. It is difficult is to solve the question of its regulation through CISG art. 19 or,
as one sector of scholars believes, by applying the general principles of the CISG or even
indicating that an implied exclusion of Article 19 is produced. The final result of the last two
positions is the establishment of control over contents of a contract. These viewpoints,
however, are not in keeping with the application of uniform norms as a central objective of
the Convention. B. The application of the general principles of the Convention
The legislative history of CISG art. 19 indicates that the battle of the forms is regulated under
the offer and acceptance norms recited in the Vienna text. Therefore, there is no justification
for turning the legislative history upside down and arguing that the battle of the forms is a gap
in the Convention which is solved by the application of the general principles on which the
Convention is based (CISG art. 7). Even so, there are scholars who feel uncomfortable with
the rule of CISG art. 19 because they think that it is not appropriate to decide an issue
involving a battle of forms but, at the same time, they think it is undesirable to abandon the
question to domestic law (fundamentally because it will go against the objective of uniform
application of the Vienna text (CISG art. 7)). These scholars have well based theories that
support the thesis that it is a gap. They assert that this gap is solved by applying the general
principles of the Convention (CISG art. 7). Under this reasoning, a problem that receives an
express solution and that leads to a high degree of certainty in the law, is fabricated and
becomes absurd.
One of these theories is based on the invalidity of acts of performance as an acceptance (CISG
art. 18) when there is a battle of the forms. In that circumstance, it is said a valid acceptance
cannot exist, and the contract is not concluded under the scope of the Convention.[97]
Proceeding from this premise, any battle of the forms is said to be solved by the application
of the general principles of the Convention (CISG art. 7). The general principles that are
taken out of Part II of the Convention include the necessity of a definitive and sufficient
agreement, that, in conformity with CISG art. 14, consists of an intention to be bound in case
of acceptance, as well as an agreement over the terms goods, price and quantity. When these
terms are present in a battle-of-the-forms scenario, it is asserted that a valid contract, although
incomplete, will exist. To complete the rest of the elements of the contract, [pursuant to] the
general principles expressly mentioned in CISG art. [7(2), it] is asserted that the contract will
include the common terms of both set of forms, filling the rest with terms that the court deems
appropriate. In addition, all the circumstances of the case, the parties' interest, and the media,
will be taken into consideration.[98]
The foundation of which this theory is constructed is, however, not solid because Part II of
the Convention contains express norms which can be applied. To apply the general principles
of the Convention there must be a matter that is regulated by the Convention, but not
expressly settled in the Convention (CISG art. 7(2)).
C. The implicit exclusion of Article 19 of the CISG
Other scholars,[99]
unsatisfied with the result reached following the rules of the Convention,
particularly CISG art. 19, have tried to build an original, but artificial, theory to do away with
the contradiction of terms. If the parties have agreed on the essential terms and have
performed the contract in spite of the existence of contradictions between terms, then there
is a tacit derogation of CISG art. 19. In the opinion of these scholars, the contract
performance is the determining factor from which they draw the following conclusions: a) the
implied derogation of CISG art. 19; b) the performance of a valid contract; and c) the
exclusion of the contract content from the contradictory clauses. The only one believed to
be correct is the second one: the performance of a valid contract. The other two appear to
magically complete the thesis they want to support. In the first place, the contract
performance by the recipient of the counter-offer indicates objective, subjective, and
reasonable assent to an offer. There is no reason to support a tacit derogation from CISG
art. 19. In the second place, even assuming that the last shot rule does not apply, this result
is unfounded. Following the same reasoning, it could be deemed that the first shot rule or
some other rule applies.
D. The partial application of Article 19 of the CISG
In contrast to most of the doctrinal thesis that defend either an integral application, or a total
exclusion of the rules of the Convention, specifically Article 19, there is also a thesis that
suggests a partial application of Article 19 to solve the conflict of the battle of the forms.
Some authors, among them Professor Diez-Picazo, understand that the two basic questions
to be answered when there is a battle of the forms are: Is there a contract? And if so, What
is its content? They believe consideration of these two questions require separate regulations. CISG art. 19 is typically applied to situations where there are no acts of performance by the
parties. If there is performance, however, these authors believe the problem is not one of
formation, but one concerning the determination of the content of the contract (which does
not turn on formation norms). To determine which terms will remain to create the content
of the contract, they propose a solution very similar to the one adopted by subsection (3) of
Section 2-207 UCC (knock-out rule). In this way, the contract is built on common terms, as
well as those supplied by the dispositive law, general principles of contract interpretation and,
in particular, business usages and good faith.[100]
This partial application of the Convention rules is said to respond to the difficulty of applying
the Vienna rules when, after the acts of performance by the parties, the contract is deemed
not to be concluded under Articles 18 and 19 of the Convention. It is understood that Article
18(3) of the CISG ignores the existence of situations where there is acceptance by conduct
(of the type described in Section 2-207(3) UCC). Those who subscribe to the partial
application of Article 19 conclude that if you want to escape this labyrinth, then domestic law
must be applied. An acceptable alternative solution is the one contained in Section 2-207(3)
UCC.[101]
This division in the application of the Convention rules has no justification. The
rules of the Convention -and only these rules- provide comprehensive regulation of the
formative scheme of the contract and the traditional declarations of will in the form of offer
and acceptance. The exchange of forms is regulated in its entirety by the Convention, as will
be examined next.
E. The search for uniformity: Articles 18 and 19 CISG
Examination of two solutions to the problem represented by contradiction of forms -the
application of rules on offer and acceptance, or content control- we see that neither is entirely
perfect. The Convention's rules, which center around Articles 18 and 19 are reviewed below. 1. Rules to determine the conclusion of the contract
With the objectives of certainty and security in contracting, the Vienna drafters decided to
apply rules of offer and acceptance along with acts of performance to solve the issue of the
battle of the forms. a) If the offeror-buyer sends to the offeree-seller a purchase form as a way to manifest his
offer and in response receives a separate form from the seller, usually neither form is signed. This conflict of forms materially alters the offer and the purported acceptance is really a
rejection under Art. 19(1) and 19(3) of the CISG. This rejection could be considered a
counter-offer capable of acceptance only if it satisfies the essential elements of Article 14(1)
of the CISG. In this situation, if the seller (new offeror) sends the goods, the reception and
acceptance by the buyer -who does not raise objections- may be deemed an objective
manifestation of acceptance of the counter-offer that concludes the contract in accordance
with the terms of the counter-offer.[102]
b) If the offeror-seller sends his form and the buyer adds to the reply terms that materially
modify it, this is a counter-offer and a rejection of the original offer, similar to the previous
hypothesis. If, subsequently, the seller decides to send the goods, this act is an indication of
assent to the counter-offer of the buyer. This indication of assent, in order to comply with the
requirements of "reaching" of the Convention, must reach the offeror (art. 18(1) in relation
to 24 CISG). This requirement may be satisfied by the arrival of the goods or a notice
informing of the dispatch of the goods. When the offer, practices established between the
parties, or usages indicate that the seller is not required to communicate the acceptance, the
sending of the goods concludes the contract (art. 18(3) CISG).[103]
The legislative history of Article 19 CISG documents its applicability to situations in which
there are conflicts between clauses incorporated in the purchase and sale forms. When there
is an exchange of forms, their terms must be compared to determine if there are variations that
may be deemed material. Article 19 of the CISG does not apply to exchanges of forms when
the reply to the offer does not depart from it. In this case, the only articles of the Convention
that will play a role will be Articles 14(1) and 18(1) CISG. The rules applicable to most
exchanges of forms are:
a) When the form, sent as a reply to an offer form contains additional or different terms that
materially alter the offer, it cannot be deemed an acceptance by mandate of Article 19(1).
Such a reply is a rejection and a counter-offer; it is a new offer that must be accepted to
conclude the contract. Frequently, there will be acts of performance which under the norms
of the Convention, can be regarded as acts of acceptance. The critics or detractors of this understanding undermine the meaning of the Convention
when they conclude that the acts of performance cannot be considered as an assent to the
terms of the counter-offer form.[104]
The indication of assent to the offer, in the cases cited here, derive from the realization of an
act -- sending or acceptance of the goods -- from which the Convention infers an act of will.
The Convention under Article 18(1) (A statement made by or other conduct of the offeree
indicating assent to an offer is an acceptance) places both indications of assent in the same
position. Unlike acceptances by oral or written declarations of will, acceptance by
performance yields two results: the sale contract is concluded and, simultaneously, the
contract enters the execution phase. The consent, necessary for the contract's formation, is
normally manifested in such cases by the sending of the goods by the seller or the reception
of the goods by the buyer -- acts that coincide with the commencement of performance or the
total performance of the sales contract.
It seems clear that these are acts that can show an individual will, without being concerned
with recognition of discrepancies in the forms. It is not accepted opinion that the Vienna
Convention protects carelessness in not reading the forms. The Vienna text mandates that acts
of performance made in a conclusive way are sufficient to demonstrate assent to a previous
declaration of will and to conclude the contract. If there is a counter-offer followed by an act
of performance by the addressee, the contract is deemed concluded because this situation is
objectively understood as an act of acceptance.[105]
2. Rules to determine the content of the contract a) When the reply form could be deemed as an acceptance because it does not depart
materially from the offer, then, in conformity with Article 19(2) CISG, the terms of the
contract will be those of the offer, as well as those contained in a reply that "contains
additional or different terms which do not materially alter the terms of the offer. The offeror,
however, has an opportunity to prevent the incorporation in the contract of such additional
or different non-material terms by objecting to them "without undue delay." b) When the reply to an offer form has additional or different terms that materially alter the
offer, it will be regarded as a rejection and a counter-offer. Such a counter-offer may be
accepted by acts of performance. Where there is such a counter-offer and acceptance by acts
of performance, in the classic sense of Articles 14 and 18 CISG, the terms of the contract will
be those of the counter-offer.
Compared to determining the contents of the contract by applying a knock-out rule whereby
common terms are added to the contract and contradictory terms excluded, there is merit to
a rule that draws the contents of the contract from the terms of one of the parties tied to an
acceptance by performance. While far from perfect, there are more advantages to this
approach than many detractors of the mirror-image rule and last-shot rule acknowledge.
The principle of mutual identity between the terms of the offer and the acceptance has an
undeniable virtue: the mirror image and last-shot rule provide a certainty and legal security
for the parties that is reinforced by the special configuration of paragraphs (1) and (3) of
Article 19 when they list the elements that materially alter the offer. Although this solution
is rigid, in addition to legal certainty, it provides adequate protection to the parties in the
majority of cases[106]
and permits enterprises to more perfectly plan their standardized
transactions. From the standpoint of certainty, a mere comparison between the purchase and
sale forms is sufficient to enable courts and parties to determine the concordance or
discordance of the forms. And the manner in which enterprises have satisfactorily planned
their standardized transactions in the face of such rules is well recorded.[107]
Also, the Convention's rule is not rigid in all respects. There are opportunities in the
Convention to temper unduly harsh results in appropriate cases. For example, domestic
unconscionability doctrines can enter the equation via CISG art. 4(a), or similar results can
be achieved through use of the Convention as "yardstick for the validity of clauses that the
parties have not really agreed upon but that one has imposed upon the other through the use
of standard terms. . . . "[108]
VII. The Vienna Rules of the Convention, Section 2-207 UCC and the UNIDROIT
Principles: A Comparison
We summarize solutions to battle-of-the forms scenarios under three legal regimes: the UCC,
the CISG, and the UNIDROIT Principles. For this purpose, we use fact patterns provided
by Professors White and Summers in their evaluation of the UCC.[109]
A. Exchange of forms with terms that do not modify the offer materially a) Scenario one. The seller sends to the buyer an offer. Seller's form provides that the goods
are to be packed in safe bags. The buyer decides to accept the offer sending his own form,
and it is received without any objection by the offeror. Buyer's form states that the goods are
to be packed in new bags. A few days later, the market price of the goods drops dramatically;
the bargain is no longer attractive to the buyer. b) Solution according to Section 2-207 UCC. If, as it seems, there was a definite and
seasonable acceptance and the clause included in the acceptance is not regarded as a material
alteration to the offer, the contract will be concluded and the terms of the agreement will be
determined depending on the thesis adopted: a) if the different terms are included in
subsection (2) of section 2-207 UCC, the goods are to be packed in new bags: b) if one
chooses the opposite solution: b.1) for Professor White, we apply the knock out rule; b.2)
for Professor Summers, the different terms of the acceptance are excluded; consequently, the
terms of the offer prevail, which means that safe bags must be used.
c) Solution according to the Vienna Convention. Here too, we assume that the reference to
"new bags" in the reply does not materially alter the terms of the offer ("safe bags"). The
contract is concluded; its terms are those of the offer, except its packing clause which is
replaced by the packing clause contained in the acceptance: packing in new bags (CISG art.
19(2)). d) Solution according to the UNIDROIT Principles. A strict application of Article 2.22 of
the Principles leads to the application of the knock-out rule and cancellation of the different
clauses. However, since the remainder of the rules on formation of contracts also apply,
Article 2.11, parallel to CISG art. 19, will come into play and the solution is the same as
B. Exchange of forms with terms that materially modify the offer
a) Scenario two. The exchanged forms are identical except that the reply contains a clause
calling for the arbitration of disputes. b) Solution according to Section 2-207 UCC. Pursuant to UCC 2-207(2) UCC, the contract
is concluded, since there is a definitive and seasonable expression of acceptance. The
arbitration clause is an additional term that materially alters the offer. Therefore, in
accordance with UCC 2-207(2), it is not incorporated in the contract.
c) Solution according to the Vienna Convention. The contract is not concluded because there
is a material alteration (art. 19(3). This converts the reply to a rejection and a counter-offer
(art. 19(1)). There will be no contract unless there is further manifestation of some type of acceptance.
d) Solution according to the UNIDROIT Principles. The contract is concluded excluding the
arbitration clause (art. 2.22).
C. An exchange of forms with contradictory terms, followed by performance a) Scenario three. The buyer's offer is accompanied by a form that contains an arbitration
clause. The seller's acceptance is accompanied by a form in which he indicates that disputes
will not be decided by arbitration. The seller delivers the goods and the buyer receives and
pays for them. A dispute arises. Must it be resolved before an arbitrator?.
b) Solution according to Section 2-207 UCC. If it is assured that there is a definite and
seasonable expression of acceptance (subsection (1)) and that the contract is concluded, to
determine the content of the contract we proceed to subsection (2). Professor White, relying
on Comment 6, will apply subsection (3). The result is that the contradictory clauses
"knock-out" one another; the parties will not be required to resolve their dispute by
arbitration. Professor Summers, on the contrary, does not believe that Comment 6 is
applicable to the exchange of forms. It is his view that "different terms" will not bring Section
2-207 UCC into play, because it only refers to additional terms. The terms of the offer will
control the content of the contract and the parties will resolve their dispute before an
arbitrator. c) Solution according to the Vienna Convention. The buyer's form is an offer -assuming it
contains the elements required by Article 14 CISG. Seller's reply form is not regarded as an
acceptance, since it introduces a term "arbitration" that materially alters the terms of the offer.
In accordance with Article 19(1) and (3) CISG, the seller's reply must be regarded as a
rejection of the offer or a counter-offer. This counter-offer is accepted by the buyer at the
reception of the goods (CISG art. 18(1)). The arbitration clause is not included in the content
of the contract. d) Solution according to the UNIDROIT Principles. In conformity with article 2.22, the
contract does not include the arbitration clause.
D. Term included in the offer but not in the acceptance, followed by performance
a) Scenario four: Exactly as specified in the previous hypothesis, except that the seller's form
says nothing with regard to the settlement of disputes.
b) Solution according to Section 2-207 UCC. It is deemed that the seller who does not add
any term accepts the terms contained in the buyer's form. c) Solution according to the Vienna Convention. Since the acceptor-seller has given an
answer to the offer that does not include additions, limitations or modifications, the contract
is concluded when the seller's form is received by the offeror. It is composed of the terms of
the offer, including the buyer's arbitration clause (CISG arts. 14 and 18.2 in relation to
articles 23 and 24). d) Solution according to the UNIDROIT Principles. It can be said that there is no agreement
with respect to the arbitration clause proposed by the offeror, since the offeree responded
with his own form which contains nothing in relation to the resolution of the disputes. In
accordance with Article 2.22 the arbitration clause will not become part of the content.
E. Term added in the acceptance but not in the offer, followed by performance
a) Scenario five. This is the opposite of the previous hypothesis, in other words, the buyer
sends an offer that is silent about the resolution of the disputes and gets as a reply the seller's
form in which he adds an arbitration clause.
b) Solution according to Section 2-207 UCC. In accordance with Section 2-207(1), the
seller's form will be treated as an acceptance. To determine the terms of the contract, one
must refer to subsection (2). An additional term such as an arbitration clause would usually
be regarded as a material alteration, therefore the arbitration clause will not be incorporated
into the contract. c) Solution according to the Vienna Convention. The reply of the seller is clearly a
counter-offer because it adds a term that alters materially the offer (CISG arts. 19(1) and
19(3)). This counter-offer is accepted by the buyer by accepting the goods; the arbitration
clause is therefore applicable.
d) Solution according to the UNIDROIT Principles. The seller's arbitration clause would be
excluded from the content of the contract in accordance with article 2.22.
F. Term added in the acceptance along with a "defensive clause"
a) Scenario six. Exactly the same as the previous hypothesis except that in his reply to the
buyer's offer, seller has stated that the contract may only be concluded on the basis of seller's
terms. b) Solution according to Section 2-207 UCC. There can be several solutions under this
Section: If the phrase is considered an expressly conditioned acceptance, seller's reply is
regarded as a counter-offer. The result is clear where there is an express statement of
acceptance by the buyer but, as often happens, the buyer simply accepts the goods. This
raises a question: Is this an acceptance of the term introduced in the seller's form? Many
UCC courts answer, NO; Instead, they apply the knock out rule and the arbitration clause is
not considered part of the contract. A similar result would apply should seller's conditional
phrase be regarded as unclear. c) Solution according to the Vienna Convention. The same as indicated in the previous
hypothesis. The condition imposed by the offeree simply confirms that which article 19(1)
already states.
d) Solution according to the UNIDROIT Principles. According to the Principles, the solution
will turn on two factors: first, whether seller's conditional intent is clear; second, whether
seller's intent is expressed in a standard clause or a non-standard. A non-standard clause will
prevail over a standard clause (art. 2.21). This is a case in which the knock-out rule of the
Principles will not apply. G. The offeror includes a "defensive clause" and the acceptor adds an arbitration
a) Scenario seven. The offeror-buyer does not say anything on the subject of arbitration but
he insists that only his terms may be considered a part of the contract. The seller-offeree
accepts adding an arbitration clause.
b) Solution according to Section 2-207 UCC. The UCC's solution depends on the
interpretation given to the requirement of the offeror. If we construe it as conditioning the
existence of the contract to the acceptance of the offeror's terms, any other element
introduced by the offeree does not become part of the contract; the terms of the offer control
the content of the contract. If the interpretation does not lead to this result, the two first
subsections of section 2-207 will not apply; Instead, subsection (3) applies where the
offeror/offeree exchange is followed by performance. Nevertheless, the solution will be the
same; the contract will not include the arbitration clause. c) Solution according to the Vienna Convention. If it is clear that the offeror insists that all
his terms must be accepted by the offeree-seller, an offeree's reply containing a material term
not mentioned by the offeror must be considered a rejection of the offer, as well as a
counter-offer (CISG art. 19(1) and (3)). The counter-offer may be accepted by an act of
performance, such as reception of the goods (CISG art. 18).
d) Solution according to the UNIDROIT Principles. The solution is exactly the same as under
the previous hypothesis, with the difference that the terms of the contract will be the those
of the offer; therefore, the arbitration clause will not be incorporated in the contract. H. Exchange of documents different from the forms
a) Scenario eight. We now refer to cases where the existence of the contract is unclear but
there have been previous negotiations.
b) Solution according to Section 2-207 UCC. Until there is performance of contractual duties
of the parties, an agreement, or an exchange of documents that so indicates; the existence of
a contract cannot be affirmed. Conversely, if there is no evidence of the writings by the
parties, but there are acts of performance -- Section 2-207(3) will not be applicable, because
it presupposes writings between the parties. In any case, Section 2-204 UCC and the implied
terms of Article 2 UCC will be applicable.
c) Solution according to the Vienna Convention. If there is no identifiable sequence of
declarations of will in the form of offer and acceptance, but there is performance, nothing
prevents the application of the general principles of the Convention; the contract will be
concluded. d) Solution according to the UNIDROIT Principles. The contract will be understood
concluded as indicated by the behavior of the parties as relevant proof of its existence (art.
* This article was submitted to the Student Essay Contest of the Institute of International Commercial Law
in December 1995 while Ms.Perales was a Doctoral Candidate at Universidad Carlos III de Madrid.
1. United Nations Convention on Contracts for the International Sale of Goods, Apr. 11, 1980,
U.N. Doc. A/CONF. 97/18, Annex I, reprinted in 19 I.L.M. 668 [hereinafter CISG].
2. As of 14 September 1998, the Vienna Convention is part of the domestic law of 53
countries: Argentina, Australia, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria,
Burundi, Canada, Chile, China, Croatia, Cuba, Czech Republic, Denmark, Ecuador,
Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Guinea, Hungary, Iraq, Italy,
Latvia, Lesotho, Lithuania, Luxembourg, Mexico, Republic of Moldova, Mongolia,
Netherlands, New Zealand, Norway, Poland, Romania, Russian Federation, Singapore,
Slovakia, Slovenia, Spain, Sweden, Switzerland, Syria, Uganda, Ukraine, United States,
Uzbekistan, Yugoslavia and Zambia. Ghana and Venezuela have signed it, but have not
yet decided to ratify it.
The Official Text is in "United Nations Convention on Contracts for the International Sale
of Goods (A/CONF.97/18, Annex I), p.178 et seq, and in United Nations Conference on
Contracts for the International Sale of Goods, Vienna, Official Records (A/CONF.97/19).
New York: United Nations, 1991. The works that led to the adoption of the Convention
are summarized in: a) in the Official Records, where there is also a comment for each
article of the previous Draft (1978 Draft) prepared by the UNCITRAL Secretariat:
Commentary on the Draft Convention on Contracts for the International Sale of Goods,
prepared by the Secretariat (A/CONF.97/5, in A/CONF.97/19, p. 14 et seq); and b) the
UNCITRAL Yearbooks (vol. 10.). CISG Articles to be cited as "Article" hereinafter.
3. The move toward a uniform law of international trade began in April 1930 when
UNIDROIT, or the Rome Institute, took the initiative of founding a Working Group in charge
of the drafting of a Uniform Law on international sales. Two Drafts were prepared: one on
the formation of international contracts by correspondence ("Loi uniforme sur la formation
des contrats internationaux par correspondance"); the other related to the performance of
the contract, which was drafted on the basis of the work of Professor Ernst Rabel, DAS
RECHT DES WARENKAUFS, vol. I (1936), II (1958). The importance of Rabel's work
is underlined by its use as the basis of the deliberations during the 1964 Hague Conference.
See Ernst von Caemmerer, Die Haager konferenz über die internationale Vereinheitlichung
des Kaufrechts, vom 2, bis 25, april 1964, 1965, vol. 29, p. 101 et seq; see also Peter
Schlechtriem, Einheitliches UN-Kaufrecht. Tübingen: J.C.B. Mohr, 1981, p. 1 et seq; in
regard to the last author, we will follow the English translation of his book: Uniform Sales
Law, The UN-Convention on Contracts for the International Sale of Goods, 1986. The work
of UNIDROIT was interrupted during to the Second World War, but it recommenced when
an International Diplomatic Conference was convened in The Hague in 1951. In 1959 a Draft
Uniform Law on Formation of International Sales Contracts was published; also published
was a Draft Uniform Law on International Sales Contracts in 1956. In 1964, a new
Diplomatic Conference was convened to work on the two Drafts. After three weeks of
intensive work, two Conventions were adopted. One related to Uniform Law on International
Sales Contract that incorporated as an annex a Uniform Law: Uniform Law on the
International Sales (ULIS). The other related to the Formation of the Contracts and also
incorporated a Uniform Law on that theme: Uniform Law on Formation of International Sales
Contracts (ULF). The Hague Sales Convention entered into force 18 August 1972; The
Hague Formation Convention on 23 August 1972. More recently, their value has become
more limited because the 1980 Vienna Convention has successfully replaced these texts.
According to Article 99(3) CISG: a state which ratifies, accepts, approves, or accedes to the
CISG and is a party to either or both the Hague Conventions shall at the same time denounce
either or both Hague Conventions. 4. See Gyula Eörsi, A Propos the Vienna Convention on Contracts for the International Sale
of Goods, 31 AM. J. Comp. L. 333, 335 n. 5 (1983), who adds that the most outstanding
difference between ULIS and the CISG consists precisely in the considerable decrease of
rigor commercialis, that was achieved due to the change in the composition of the
participant countries.
During the 1964 Hague Diplomatic Conference the distribution of the participating States was
as follows: developed (78.6%) and developing (10.7%), while during the 1980 Vienna
Diplomatic Conference the distribution was: developed (35.5%) and developing (46.8%). See
Gabrielle Brussel, The 1980 United Nations Convention on Contracts for the International
Sale of Goods: A legislative study of the North-South Debates, 6 N.Y. Int'l L. Rev. 53, 61
5. See Manuel Olivencia, La Convención de las Naciones Unidas sobre los Contratos de
Compraventa Internacional de Mercaderías: Antecedentes Históricos y Estado Actual 201
Revista de Derecho Mercantil 377, 394 (1992). 6. Article 14(1) states: "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 implicitly fixes or makes provision for determining the quantity and the
Article 55 states: "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." See id. at art. 55.
7. Article 16 indicates that: "1. Until a contract is concluded an offer may be revoked if the
revocation reaches the offeree before he 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 on the offer." 8. Conflict-compromise lines present throughout the Convention are said to be Civil Law v.
Common Law, North-South, and East-West. See Eorsi, supra note 2, at 342 n. 4. Eörsi
refers to the Article 19 conflict-compromise as East-West. A sharper delineation is provided
by Farnsworth, who refers to Article 19 as a conflict-compromise between traditionalists and
reformers. See E.A. Farnsworth, Article 19 in C.M. Bianca & M.J. Bonell, Commentary on
the International Sales Law; The 1980 Vienna Sales Convention 175 (1987). Article
19(1), with its mirror image rule, reflects the point of view of the traditionalists, while
paragraph (2) corresponds to the desires of the reformers. The compromise, however,
balances in favor of the traditionalists, thanks to the introduction of paragraph (3) of Article
19 CISG. 9. Article 23: "A contract is concluded at the moment when an acceptance of an offer becomes
effective in accordance with the provisions of this Convention."
Article 24: "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." 10. Article 7 (1): "In the interpretation of this Convention, regard is to be had to its
observance of good faith in international trade. 2. Questions concerning matters governed by
this Convention which are not expressly settled in it are to be settled in conformity with the
general principles on which it is based or, in the absence of such principles, in conformity with
the law applicable by virtue of the rules of private international law." See CISG, supra note
2, art. 7.
11. International Institute for the Unification of Private Law, Principles of International
Commercial Contracts, (Rome 1994) [hereinafter UNIDROIT Principles].
12. Restatement (Second) of Contracts (1981).
13. However, effective January 1, 1995, Article 1943 Louisiana Civil Code ("An acceptance
not in accordance with the terms of the offer is deemed to be a counter-offer") was
superceded by new Articles 2601 and 2602 which closely follow section 2-207 UCC. See
Stephan Kinsella, Smashing the Broken Mirror: The Battle of the Forms, UCC 2-207, and
Louisiana's Improvements, 53 La. L. Rev. 1555 -56 (1993). New Article 2601 reads as
follows: Art. 2601. Additional terms in acceptance of offer to sell a movable. "An expression of acceptance of an offer to sell a movable thing suffices to form a
contract of sale if there is agreement on the thing and the price, even though the
acceptance contains terms additional to, or different from, the terms of the offer, unless
acceptance is made conditional on the offeror's acceptance of the additional or different
terms. Where the acceptance is not so conditioned, the additional or different terms are
regarded as proposals for modification and must be accepted by the offeror in order to
become a part of the contract.
"Between merchants, however, additional terms become part of the contract unless they
alter the offer materially, or the offer expressly limits the acceptance to the terms of the
offer, or the offeree is notified of the offeror's objection to the additional terms within a
reasonable time, in all of which cases the additional terms do not become a part of the
contract. Additional terms alter the offer materially when their nature is such that it must
be presumed that the offeror would not have contracted on those terms." Id. at 1558.
New Article 2602. Contract by Conduct of the Parties indicates that:
"A contract of sale of movables may be established by conduct of both parties that
recognizes the existence of that contract even though the communications exchanged by
them do not suffice to form a contract. In such a case the contract consists of those terms
on which the communications of the parties agree, together with any applicable provisions
of the suppletive law." Id. at 1559. 14. See U.C.C. 1995 Official Text, with Comments.
15. UNIDROIT work, which initially received the name of "Progressive Codification of
International Trade Law" started in the early 1970's. The first session, which convened in
1974, was limited in scope and focused mainly on the general part of contractual law of some
contracts, among them, the sales contract. After several drafts, the final text was approved
in 1994. It contains 109 Articles with 7 chapters; its objectives are several: to serve as a
model for national and international legislators; to serve as well as a model of interpretation
to the international instruments, among them, the Vienna Convention of 1980; to be useful
as a guide for the drafting of contracts; and, finally, to create a sort of common principles for
all legal systems.
16. See Franco Ferrari, Le Champ D'application Des "Principes Pour les Contrats
Commerciaux Internationaux" Elabores Par UNIDROIT, 4 Revue Internationale de
Droit Compare 985, 988 n. 4 (1995). 17. This is one of the tasks the drafters of the Principles set forth in its Preamble. About this and
other objectives of the Restatement, see the Preamble of the Principles (Purpose of the
Principles): "They may be used to interpret or supplement international uniform law
instruments." UNIDROIT, supra note 9. This is clearly the opinion of Ulrich Magnus, Die
allegemeinen Grundsätze im UN-Kaufrecht, 59 Rabels Zeitshcrift 469, 492 (1995); he
indicates that the agreement between the Convention and the Principles it is not a surprise
since the Vienna text may be considered the "godfather" of the Principles. See also Klaus
Peter Berger, Die UNIDROIT-Prinzipien für Internationale Handelsverträg 94 Zeitschrift
für Vergleichende Rechts-wissenschaft 217, 218 (1995). See generally del Pilar Perales
Viscasillas, UNIDROIT Principles of International Commercial Contracts: Sphere of
Application and General Provisions, 13 Ariz. J. Int'l & Comp. L. 380.
18. Scholars have also supported this approach. See Alejandro Garro, The Gap Filling Role
of the UNIDROIT Principles in International Sale Law: Some Comments on the Interplay
between the Principles and the CISG. 68 Tul. L. Rev. 1149,1169 (1995) (considering the
application of the Principles to the Convention acceptable).
19. See Joseph Perillo, UNIDROIT Principles of International Commercial Contracts: the
black letter text and a review, 63 Fordham L. Rev 288 (1994) (comparing CISG Article 19
with PICC Article 2.22: "The battle-of-the forms receives innovative and generally sound
treatment in Principles").
20. See Cour d�appel of Grenoble 23 October 1996 (France) (PACE) (UNILEX) as the first
national decision that refers in its ruling to the UNIDROIT Principles. The Court refers to
Article 6.1.6 of the UNIDROIT Principles and CISG Article 57(1)(a) as adopting the same
principles. The first arbitral award mentioning the UNIDROIT Principles judged a dispute
between an Austrian seller and a German buyer. They have stated that in the relations
between merchants it is normal that the seller, due to the payment delay, turns to the rate of
interests of its own State; a solution that the tribunal says will be obtained from an application
of Article 7.4.9 of the UNIDROIT Principles. See two arbitration decisions of the
Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft-Wien, 15 June
1994, respectively (SCH-4366) and (SCH-4318) (Austria) (UNILEX, English translation)
(PACE, English translation). See their text and the note prepared by Peter Schlechtriem,
Techt Der International Wirtschaft, 1995, p. 590-94; see also the translation to Italian
and the note by Alessandra Mari in Diritto del Commercio Internazionale, 1995, n. 19.2, p.
487-501. One must praise the UNIDROIT Principles for ruling on the rate of interests, a
ruling that could not be obtained during the drafting of the Vienna Convention. The drafters
of the Convention were unable to find a compromise acceptable to them. For this reason, rate
of interest is an open question under the Convention; its solution is unclear: on the basis of
the general principles of the Convention (Article 7(2) CISG) or, on the contrary, a matter that
must be solved under the rules of the private international law. Finally, the first arbitral
award that identified the UNIDROIT Principles with the principles on which the Convention
is based is: ICC 8128/1995, (applying UNIDROIT Principles and the European Principles of
Contract Law to determine the rate of interest). The Principles of European Contract Law,
which should be approved soon in their final form, are the product of the work of the
Commission on European Contract Law under the chairmanship of Professor Ole Lando.
They are similar to the UNIDROIT Principle but its field of application, rationae materiae,
is broader (consumer contracts as well as commercial contracts). However, the concept of
internationally is narrower, since the European Principles are intended to apply within the
scope of the European Union States. See Michael Joachim Bonnel, The UNIDROIT
Principles of International Commercial Contracts and the Principles of European Contract
Law: Similar Rules for the Same Purposes, 2 Unif. L. Rev. 229 (1996); and Katharina
Boele-Woelki, The UNIDROIT Principles of International Commercial Contracts and the
Principles of European Contract Law: How to Apply Them to International Contracts, 4
Unif. L. Rev. 652 (1996). See infra note 21 for the method of citing case law. 21. Presently, the best way of finding a case dealing with the CISG is through the computer. - CISG W3 Database of the Institute of International Commercial Law of Pace
University School of Law (White Plains-New York) <http://www.cisg.law.pace.edu>.
Editors: Professors Albert H. Kritzer and Nicholas Triffin [hereinafter PACE].
- UNILEX (International Case Law and Bibliography on the UN Convention on
Contracts for the International Sale of Goods) is published by Transnational Publishers, Inc.
One Bridge Street, Irvington, New York 10533. Phone (914) 591-4288 (orders
800-914-8186). UNILEX is available in paper, CD-Rom, and disk. Director: Professor
Michael Joachim Bonell. - CLOUT (Case Law on Uncitral Texts) is the system UNCITRAL has choosen to
collect all decisions either courts or arbitrators related to any of the texts for this organism
prepared (http://www.un.or.at/ uncitral/status).
- Freiburg University Database ([CISG online] Website) <http://www.jura.uni-freiburg.de/ipr1/cisg>. Director: Professor Peter Schlechtriem.
- CISG-France, Saarbrücken University <http://www.jura.uni-sb.de/FB/LS/Witz>.
Director: Professor Claude Witz.
The way this author cites a case would be: name of the court, date, docket number, country,
and the source either (PACE) or (UNILEX) or both. In relation with PACE, it has links to
both Freiburg and CISG-France when they provide the full text of the case at hand, so I will
not refer to them. PACE provides also the CLOUT abstracts, so therefore I will not refer to
CLOUT either. For those who prefer books, see Michael Will, UNILEX, International Sales Law under
CISG. The UN Convention on Contracts for the International Sale of Goods (1980), The
First 222 or so Decisions; Schriftenreihe deutscher Jura-Studenten in Genf 10, Genève: Unité
de droit allemand, Faculte de droit, 1995; and Claude Witz, Les premières applications
jurisprudentielles du droit uniforme de la vente internationale (Convention des Nations Unies
du 11 avril 1980). Paris: LGDJ, 1995. For an English digest of the latter text, see Vivian G.
Curran, The Interpretative Challenge to Uniformity, 15 J. of L & Com. 175 (1996). For case law under ULF see Peter Schlechtriem and Ulrich Magnus, Internationale
Rechtsprechung zu EKG un EAG. En Gesellschaft für Rechtsvergleichung (Hrsg.),
Baden-Baden, Nomos, 1987. The cases cited in relation with the ULF come from the cited
source. 22. Battle of the forms are associated with the use of general terms and conditions. This is
common place. Frans van der Velden, Uniform International Sales Law and Battle
of Forms in: Unification 233 (Jean G. Sauveplanne eds., 1984). Conflicts between forms
are also commonplace. Such conflicts are inevitable when parties exchange purchase orders
and acceptances, each with its own pre-printed terms and conditions, under circumstances
(1) Each document bears on its face tailored attention to such matter as price, quantity
(2) The "legal" terms and conditions are set forth, often in fine print, commonly on the
reverse side; or in a separate attachment.
(3) The forms are processed by business persons whose salaries are more perfectly
attuned to the volume of such transactions than to the contents of the "legal" terms and
In such an environment it is hardly surprising that more attention is paid by such persons to
the contents of (1) than to the contents of (2). A consequence is less attention by such
persons to conflicting liability/limitation of liability and other "legal" clauses that can
accompany the transaction.
23. Although this is an environment in which unresolved battle-of-the-forms issues are
commonplace, two factors reduce the risk of litigation: first, the typical purchase and sale
transaction is carried forward in a manner satisfactory to both parties, without regard to the
"legal" clauses that accompany the transaction; second, where problems arise parties generally
resolve them, often also without regard to the "legal" clauses that accompany the transaction.
For example, in a study made over a period of 16 years by IBM Canada, it was found that on
the basis of 250 different models of forms, about 18,000 annual sales contracts and about
27,000 purchase contracts -- of a total of 90,000 sales and purchase transactions-- there were
no instances of conflicts of forms that led to litigation. See G. Murray, A Corporate
Counsel�s Perspective of the "Battle of the Forms," The Canadian Bus. L.J., 1980, vol. 4, n.
13, p. 290-96. A typical business solution is a cost/risk analysis: the cost in man hours (man
years in large volume business) of perfectly coordinating the exchanged documents versus the
risk entailed by having a proportion of them pass through with "legal" terms that conflict. See
id. This is a risk that can lead to varying degrees of uncertainty, depending on the legal regime
applied: this is the subject of this analysis. 24. See John O. Honnold, Uniform Law for International Sales under the 1980
United Nations Convention, 228 (1991). The author refers to dissatisfaction with Section
2-207 UCC. For a comparison of the Vienna Convention and the UCC, see also his statement
that "UCC 2-207 tried to go farther and, in effect, force through a marriage when the couple
is quarreling at the altar. Personally I think the Convention�s restraint is preferable." See also
John O. Honnold, The New Uniform Law for International Sales and the UCC: A
Comparison, Symposium on International Sale of Goods Convention, The Intl. Lawyer,
1984, vol. 18, n 11, p. 26. Professor Honnold refers impliedly to the last-shot rule, but in
the second edition of his text clearly rejects it: "Last shot" theories have been rightly
criticized as casuistic and unfair. They do not reflect international consensus that justifies
importing them into the Convention. See id. Later, Professor Honnold explains that if the
contract performance shows its existence, but its terms are contradictory, the solution must
be derived from applicable law of commercial sales, which provides solutions to gaps left in
contracts. See id. The author applies the knock-out rule. See Honnold, Uniform Law, n
1170.3, p. 238-39. Professor Farnsworth, referring as well to the controversy in his country
surrounding Section 2-207 UCC, indicates that the solution provided by the Convention is
sensible but conservative. See E. Allan Farnsworth, Formation of Contracts , in N.M.
Galston and H. Smit, International Sales: The United Nations Convention on Contracts
for the International Sale of Goods, (1984) 3-17. See also J. Edward Murray, An Essay on
the Formation of Contracts and Related Matters Under the United Nations Convention on
Contracts for the International Sale of Goods, The J. of L. and Com., 40 (1988); and Barry
Nicholas, The Vienna Convention on International Sales Law, 15 L. Quart. Rev. 217
(1989), in whose judgement, the Convention makes a very small contribution to solve the
25. By way of exception, see Albert Kritzer, International Contract Manual, Guide
to Practical Applications of the United Nations Convention on Contracts for the
International Sale of Goods 117 (1989), who states: "It was a battle between certainty
and equity with the advocates of certainty winning out." See also Thomas J. McCarthy,
Ending the "Battle of the Forms;" a Symposium on the Revision of Section 2-207 of the
Uniform Commercial Code, 41 Bus. Law. 1019, 1063 (1994), who assumes that:
"Theoretically, the CISG and the UCC take opposite stances on what constitutes acceptance.
The UCC adopts the theory that business people rarely read the boilerplate language on
purchase forms and that both parties are relying on the existence of a contract despite their
clashing forms. Because of this view, the UCC allows contract formation unless the
responding offeree specifically states that there will be no contract until the original offeror
expressly accepts the second set of terms." See id. The American Bar Association, in a
publication related to CISG, recognized that: "Where exchanged forms do not match,
application of the Convention will lead to fewer enforceable contracts because the terms of
an acceptance must conform to those of the offer except where alterations are not material
(Art.19). Although United Sates law is more flexible in these matters (UCC 2-207), in
international trade where parties are dealing with each other at a distance, the Convention�s
greater conceptualism is arguably desirable because it will force parties to produce more
evidence of a concluded agreement." See Kritzer at 173 citing Summary of Principle
Provisions of the CISG, The Convention for the International Sale of Goods: A
Handbook of Basic Materials, (Katherein & Magraw eds.) 1987. 26. Section 2-207 UCC is based on the assumption that the merchants do not read and
understand the terms contained on the forms exchanged between the parties. See John E.
Murray, The Chaos of the "Battle of the Forms:" Solutions, 39 Vand. L. Rev. 1307, 1373
(1986); see also Caroline Brown, Restoring Peace in the Battle of the Forms: A framework
for making Uniform Commercial Code Section 2-207 work, 69 N.C. L. Rev. 893, 902 (1991).
There are many who compare Article 19 CISG with Section 2-207 UCC, calling attention to
malicious results that can be achieved under the former. See, for example, Michael Kabik,
Through the looking-glass: International Trade in the "wonderland" of the United Nations
Convention on Contracts for the International Sale of Goods, 9 Int'l Tax & Bus. Law. 418
(1992); See also Carl Kelso, The United Nations Convention on Contracts for the
International Sale of Goods: Contract Formation and the Battle of the Forms, 21 Colum.
J. Transnat'l L. 529, 555 (1983), who indicates that the Convention, unlike the UCC, does
not treat the parties equally; Patrick Thieffry, Sale of Goods between French and U.S.
Merchants: Choice of Law Considerations under the U.N. Convention on Contracts for the
International Sale of Goods, 22 Int'l Law. 1025 (1988). Nevertheless, it is also said that
Article 19 CISG is simpler and easier to apply than Section 2-207 UCC.
27. For German law see � 150(2) BGB ("Eine Annahme unter Erweiterungen,
Einschränkungen oder sonstigen Änderungen gilt als Ablehnung verbunden mit einem neuen
Antrage"). This Article, a parallel of Article 19(1) CISG, led to the application of the last-shot
rule. From this doctrine there was an evolution towards more flexible standards which applied
�� 154 and 155 BGB. For German law and the new orientations adopted by the courts see
Salvador Durany Pich, Sobre la necesidad de que la aceptación coincida en todo con la
oferta: el espejo roto, III Anuario de Derecho Civil, 1011, 1030 (1992).
Schlechtriem does not try to force the interpretation, although he notes the inconvenience of
the solution adopted by the Convention: "It does not provide a special rule for the battle of
the forms; similar proposals had not any support. Consequently, the problem of the collision
of standards terms must be solved in accordance to Article 19 CISG. The application of the
BGB solution. . . is not possible, because the Convention does not contain a regulation of the
partial disagreement of the � �154 and 155 BGB." See PETER SCHLECHTRIEM,
Ergänzungen, Einschränkungen und sonstige Änderungen zum Angebot, Ernst von
Caemmerer & Peter Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht.
Das Übereinkommen der Vereinten Nationen über Verträge über den
internationalen Warenkauf -CISG- Kommentar (1995). The author also states that:
"we are afraid of a results similar to the old case law in Germany that followed the last-shot
rule." Id. This analysis elaborates on the views of German scholars and case law. See id. Schlechtriem, nevertheless, indicates that the consequences of the last-shot rule could be
avoided when, from an interpretation of the parties' declarations or conduct in accordance
with the usages and practices, the existence of agreement could at least be derived from the
essential terms. See id. He also states that the parties prefer a conclusion of a contract that
take this into account. See id. Besides, it could be deemed a resignation to their opposite
general conditions (Art. 6 CISG), and therefore the contract may be deemed concluded under
the rules of the Convention. See id.
28. This is how some authors regard the mirror image rule. The words of Professor Murray are
clear enough, see Murray, supra note 24, at 1331, comparing the mirror image rule of the
Common Law and Section 2-207(3) UCC: "The unjust result (referring to the last-shot rule)
became a just result under 2-207 UCC." Id.
29. INCOTERMS (International Commercial Terms) and the Uniform Rules on Documentary
Credits. 30. We are referring to a system that consists of the data interchange between computers in a
format previously agreed to by the parties. It is the most modern way of communication. The
use of a net that connects the computers is a normal practice in the banking field. There have
been many efforts by international and national organizations to achieve standardization in the
use of the EDI messages. See Amelia H. Boss, Electronic Data Interchange Agreements:
Private Contracting Toward a Global Environment, 13 N.W. J. Int'l L. 31 (1992); and Rob
VanEsch, Interchange Agreements, 1 EDI L. Rev. 3 (1994). In the USA, since 1989, there has been a model of EDI for international transactions,
developed by a task force of the American Bar Association. See Model Electronic Data
Interchange Agreement, which has a comment prepared for The Electronic Messaging
Services Task Force, Subcommittee on Electronic Commercial Practices Uniform
Commercial Code Committee Section of Business Law; See Michael S. Baum & Amelia H.
Boss, The Commercial Use of Electronic Data Interchange - A Report and Model Trading
Partner Agreement, 45 Bus. Law. 1645 (1990). This Article contains the text of the
Agreement (ABA Agreement) and the comment (p.1718-49). Also, an EDI Agreement has
been prepared by the "United Kingdom EDI Association," which in sixteen Articles regulates
the more relevant questions connected with this modern way of communication. For the text
of this agreement, see EDI Association, Standard Electronic Data Interchange Agreement,
6 Computer/L.J. 65 (1989). In the international arena, we should mention the efforts of the United Nations Commission
for Europe that has developed the standard UN/EDIFACT ("Electronic Data Interchange
for Administration, Commerce and Transport"). In the field of the European Commission,
since 1987 there is a program known as TEDIS "Trade Electronic Data Interchange
Systems." Lastly, the International Chamber of Commerce has published the "Uniform Rules
for Conduct for International Trade Data by Teletransmission (UNCID)." 31. Especially important is the recent work of UNCITRAL: 1996 UNCITRAL Model Law on
Electronic Commerce. For the reports on this work at the various sessions: See also Agustin
Madrid Parra, EDI (Electronic Data Interchange): Estado de la cuestión en UNCITRAL.
Revista de Derecho Mercantil, 115-149 (1993); and Agustin Madrid Parra, Anterproyecto
de la Ley Modelo sobre aspestos juridicos del intercambio electronico de datos 2065
Estudios de Derecho Mercantil en Homenaje al Professor Manuel Broseta Pont Tomo II.
(Valencia: Tirant lo blanch, 1995). Specifically, the Working Group on Electronic Data
Interchange of UNCITRAL decided to take into account two proposals - from the ICC and
The United Kingdom- concerning incorporation by reference of the standard clauses of a data
message. See, respectively, in the Spanish text: "Propuesta del observador de la CCI",
A/CN.9/WG.IV/WP.65, 6 enero 1995; and "la Propuesta del Reino Unido de Gran Bretaña
e Irlanda del Norte, A/CN.9/WG.IV/WP.66, 23 enero 1995. Thanks to the interest aroused
by those proposals, it was decided that the solutions, in relation to incorporation by reference,
should be collected in the Draft Guide for the incorporation of the Model Law on EDI to
domestic law, which is now being prepared. See the Spanish document: "Informe del Grupo
de Trabajo sobre intercambio electrónico de datos acerca de la labor de su 291 período de
sesiones," (Nueva York, 27 de febrero a 10 de marzo de 1995). A/CN.9/407, 16 marzo de
1995, pfo. 103. The structure of a data message can aggravate the problem of the incorporation by reference
of general conditions. We encounter situations in which a previous agreement exists and
where the general conditions are collected (situations that ought not to present problems) and
situations in which there was no previous agreement and no general conditions were
previously collected. In this sense, see also Lieve Elias, Jacques Gerard & Gien Kuo
Wang, Le Droit des Obligations Face Aux Exchanges de Donees Informatisees 48.
Cashiers du Centre de Recherches Informatique et Droit. (Paris: Facultés Universitaires
Notre-Dame de la Praix de Namur, Story scientia, 1992). Article 3.1 of the Model of
Electronic Data Interchange Trading Partner Agreement offers parties three options to
regulate the content of the agreement. See Gerard & Wang, 1738-39 and the commentary.
32. For this reason we agree completely with Burghard Piltz, UN- Kaufrecht. In von
Westphalen. Handbuch des kauffvertragsrecht in den EG-Staaten 23.(Verlag Köln:
Dr. Otto Schmidt 1992); commentary 3 to Article 2.19 of the UNIDROIT Principles, and
with MICHAEL JOACHIM BONELL, "Policing" The Contract Against Unfairness
Under The UNIDROIT Principles For International Commercial Contracts 255,
(Diritto del Commercio Internazionale 1994). Some scholars of the Convention -with whom we are in accord- consider that actual
knowledge (however, when art. 9.2 comes into play, implied knowledge is sufficient) of the
parties is essential (it would not be valid acceptance of the conditions by silence or inaction)
for the interest of the uniformity. See also Ulrich Drobnig, Standard Forms and General
Conditions in International Trade; Dutch, German and Uniform Law; In Hague-Zagreb
Essay 4. On the Law of International Trade. The Hague: TMC Asser Instituut Martinus
Nijhoff Publishers 123 (1983), refering to the 1964 Ulf; Petar Sarcevic, Standards Forms and
General Conditions. In Hague-Zagreb Essays 4. On the Law of International Trade. The
Hague: TMC Asser Instituut, Martinus Nijhoff Publishers 135 (1983); and Herbert Asam,
Aktuelle Fragen zur Anwendung des Kaufrechtsübereinkommens der Vereinten Nationen
vom 10.4.80 im Deutsch-italienischen Rechtsverkehr seit 1.1.1988. Jahrbuch für italienishes
Recht 18-19 (1990). This doctrine is also supported by Marinus Vromans, Implementation
of Treaties and use of Standard Terms in Dutch Law concerning the International Sale of
Goods, Survey of the International Sale of Goods 57 (Lafili, Gevurtz, and Campbell
et al. eds., 1986). These authors follow a similar doctrine to that recited in Sections 2, 3 and
5 of the German law on General Conditions (9 December 1976-AGBG); see also Section 864
of the Austrian AGBG (linking the control of incorporation of terms into the contract with
control over their clarity). It is considered, lastly, to be either a question of validity, that must
be left to the rules of the international private Law (Yves Derains and Jaques Ghestin, La
Convention De Vienne Sur La Vente Internationale Et Les INCOTERMS 65, (Droit
des Affaires, Paris: L.G.D.J., 1990), or a unresolved question pending (Elisabeth Stern,
Erklarungen im UNCITRAL-Kaufrecht 50 (Wien: Manz, 1990). In the context of the
clarity required by the cited German and Austrian Laws, a CISG resolution contrary to the
validity position taken by Derains and Ghestin is provided by Peter Schlechtriem who
states: "Domestic laws have special rules which seek to ensure that only those standard terms
which are contained in the offer or a modifying acceptance, and which are accessible and
understandable to the other side can become part of the contract. . ." In my opinion the
criteria established in these laws can also be read into Article 8 CISG so that recourse to
domestic law is not necessary. See Vienna Sales Convention (Recent developments), at 130. The Spanish domestic doctrine equates the possibility of having conditions known and
effective knowledge (in this sense: Manuel Albaladejo, Derecho Civil, Tomo I.
Introducción y Parte General, 413 (Barcelona: Bosch 11 ed. 1991); and Jaime Santos
Briz, Derecho Civil, Teoría y Práctica, Tomo III. Derecho de Obligaciones, La
obligación y el contrato en general, Derecho de daños 279. (Madrid: Edersa 1973)),
commenting on the express dispositions of the Italian Civil Code: Articles 1341 and 1342; See
also an excellent analysis of these dispositions by Gino Gorla, Standard Conditions and Form
Contracts in Italian Law, 11 Am. J. Comp.L. 1 (1962). 33. Article 18(1) states: "A statement made by or other conduct of the offeree indicating assent
to an offer is an acceptance. Silence or inactivity does not itself amount to an acceptance."
See also Tribunal Commercial de Nivelles, 19 September 1995 (R.G. 1707/93) (Belgium)
(PACE) (UNILEX). 34. Paragraph 3 of Article 8 states: "In determining the intent of a party or the understanding
a reasonable person would have had, due consideration is to be given to all relevant
circumstances of the case including the negotiations, any practices which the parties have
established between themselves, usages and any subsequent conduct of the parties."
Article 9(1) provides: "The parties are bound by any usage to which they have agreed and by
any practices which they have established between themselves."
35. Article 9(2) states: "The parties are considered, unless otherwise agreed, to have impliedly
made applicable to their contract or its formation a usage of which the parties knew or ought
to have known and which in international trade is widely known to, and regularly observed
by, parties to contracts of the type involved in the particular trade concerned." See also
Gerechtshof's Hertogenbosch, 24 April 1996 (456/95/He) (Netherlands) (PACE) (UNILEX). 36. See Henning Stahl, Standard Business Conditions in Germany under the Vienna
Convention, Comp. Y.B. Intl'l Bus. 383, (1993); Rolf Herber & Beate Czervenka,
Internationales Kaufrecht, Kommentar zu dem Übereinkommen der Vereinten Naionen
vom 11 April 1980, über den internationalen Warenkauf 75 (München: C.H. Beck 1991);
Peter Schlechtriem, Begriff des Angebots, in Kommentar zum Einheitlichen UN
Kaufrech 138 (C.H.Beck'sche Verlagsbuchhandlung, Munichen 1995); Vienna Sales
Convention 1980 (Recent Developments) 25; and Walter A. Stoffel, Formation du Contrat.
In the 1980 Vienna Convention on the International Sale of Goods 73. Lausanne Colloquium
of November 19-20, 1984. (Institut Suisse de Droit Comparé (3), Zurich: Schulthess
Polygraphischer), (1985).
It is interesting to observe that the following language was proposed during deliberations on
the text of the CISG: "General conditions of sale referred to in the offer which are attached
to it or known to the offeree or widely known in the international trade are considered to be
a part of the contract if the offeree agrees they are to be applied. The terms of the contract
prevail if they differ from the general conditions of sale." This proposal was rejected because
the Convention Draft already had rules to determine the content of the contract. See IX
Yearbook 1978 (A/CN.9/142), n1276-278, p. 81. See also HONNOLD, supra note 22, at
For a comparison with the ULF in regard to inclusion of general conditions in an invoice, see
Hof den Haag, 25 January 1984 (Netherlands) (in appelation: Der Hoge Raad, 18 October
1985); for a ULF comparison relating to signature on a form as a conclusive acceptance, see
LG Heidelberg, 30 January 1979 (0 4/78 kfHI) (Germany) and OLG Koblenz, 23 December
1983 (2 U 1186/83) (Germany). 37. See Stoffel, supra note 34, at 74, who indicates that generally an acceptance with different
general conditions will be a counter-offer; See also Burghard Piltz, Internationales
Kaufrecht 98. (Das UN-Kaufrecht (Wiener Übereinkommen von 1980) in praxisorientierter
Darstellung). (München: Verlag C.H.Beck, 1993), Kritzer, supra note 23, at 182; and
ULRICH von HUBER, Der Uncitral-Entwurf eines Übereinkommens über Internationale
Warenkaufverträge, in Rabels Zeitschrift 444 (1979). To the same effect, see Landgericht
(LG) Landshut, 14 June 1976 (hk o 135/75) (Germany), judging Article 7(1) ULF. But see
Rechtbank Arnhem, 23 December 1982 (rolnr 1979/1761) (Netherlands), where the court has
ruled that an offer by a Holland buyer is not materially modified when the Belgian seller
accepts referring to his general conditions.
But see Franz Bydlinski, Das Allgemeines Vertragsrecht, P. Doralt (ed.). Das
Uncitral-Kaufrecht im Vergleich zum Österreichischen Recht, Wien: Manz, 72, 1985; and
Schlechtriem, supra note 25, at 19. 38. Often the situation is complicated by multiple communications: multiple exchanges by the
cross of different communications and notifications (verbally or by writing). The problem is
better confronted by starting with a simple situation.
39. Article 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 itself amount to an acceptance. [. . .] (3) However, if, by virtue of the offer or as a result of practices which the parties have
established between themselves or of usage, the offeree may indicate assent by performing
an act, such as one relating to the dispatch of the goods or payment of the price, without
notice to the offeror, the acceptance is effective at the moment the act is performed, provided
that the act is performed within the period of time laid down in the preceeding paragraph." 40. Analysis of the offer-acceptance-counter-offer pattern is provided by numerous
commentators on the Convention. There are some differences in their opinions which will be
indicated. See generally Schlechtriem, supra note 25, at 120. See also Katharina S.
Ludwig, Der Vertragsschluss nach UN-Kaufrecht im Spannungsverhältnis von Common Law
und Civil Law: dargestellt auf der Grundlage der Rechtsordnungne Englands und
Deutschlands, Studien zum vergleichenden und internationalen Recht-Comparative and
International Law Studies, Band 24, Frankfurt am Main, Berlin, New York, Paris and Wien:
Peter Lang, 1994, p.339-40; Karl Neumayer, "Das Wiener Kaufrechts-Übereinkommen
und die sogennante "battle of the forms." In Freiheit und Zwang: rechtliche, wirtschaftliche
und gesellschaftliche Aspekte. Fetschrift zum 60. Geburstag von Hans Giger, Bern: Stämpfli,
512, 1989; Karl Neumayer & Catherine Ming, Convention de Vienne sur les contrats de
vente internationale de marchandises. Lausanne: Cedidac, 184, 1993, who reject the "knock
out" solution; MURRAY, supra note 22, at 38; Velden, supra note 20, at 236 et seq; Kritzer, supra note 23, at 117 et seq; Terry Kaan, "Standard Term Contracts," In
Singapore Conferences on International Business Law, Conference VI: Current
Developments in International Transfers of Goods and Services (9-11 September 1992).
Organized by: Faculty of Law, National University of Singapore, p. 28 et seq; Paul c.
Blodgett, The U.N. Convention on the Sale of Goods and the "Battle of the Forms," The
Colorado Lawyer, 1989, vol. 18, n. 13, p. 425 et seq; Fritz Enderlein and Dietrich
Maskow, International Sales Law: United Convention On Contracts On For The
International Sale Of Goods, 101, (1992); Burt A. Leete, Contract Formation under
the United Nations Convention on Contracts for the International Sale of Goods and the
Uniform Commercial Code: Pitfalls for the Unwary, Temple Intl. and Comp. L. J., 1992,
vol. 6, n12, pp. 208-15; Roland Loewe, Internationales Kaufrecht. Wien: Manz, 44, 1989; HERBER and CZERWENKA, supra note 34, at 107, n. 118.; Joseph M. Lookofsky, The
1980 United Nations Convention Onf Contracts For The International Sale Of
Goods, International Encyclopedia of Laws, 58 (1993); and John A. Spanogle, The Arrival
of International Private Law, The George Washington J. of Intl. L. and Econ., 513, n.
124-25, (1991). In studying non-conformity of the goods under the Convention and the
UCC, Schlechtriem expresses concern over the application of the last-shot doctrine, because
in his opinion, clauses limiting liability will be seldom known by the buyer until the dispute
arises. Peter Schlectriem, Einheitliches Kaufrecht und Nationales Obligationenrecht,
Baden-Baden: Nomos, 312 et seq. (1987). Nevertheless, he thinks that the result could be
ameliorated, even though he indicates his doubts, by an strict interpretation of Article 35(2)
CISG phrase: "Except where the parties have agreed otherwise." Id. The Secretariat
Commentary to Article 17 of the Draft Convention of 1978 states: "If the reply contains a
material alteration, the reply would not constitute an acceptance but would constitute a
counter-offer. If the original offeror responds to his reply by shipping the goods or paying
the price, a contract may eventually be formed by notice to the original offeree of the
shipment or payment. In such a case the terms of the contract would be those of the
counter-offer, including the additional or different term.""(A/CONF.97/19, n. 115, p. 24). For authors who stress the importance of solutions based on examination of the facts of each
case and provide interpretative guides for the conduct of such examinations, see Jean
Thieffry and Chantal Granier, La Venta Internacional. Madrid: ICEX, 75, (1989);
and Manuel Medina De Lemus, La Venta Internacional de Mercaderías. Madrid:
Tecnos, 81, (1992).
41. This objection to the last-shot rule is insistently repeated by its detractors, especially by
U.S. authors, for whom this defect of the last-shot rule has been overcome by the more
innovative rule of Section 2-207 UCC. See the critics Of SAMUEL WILLISTON, A
TREATISE ON THE LAW OF CONTRACTS, p. 133 et. seq. n.16.17(40 ed. 1990); Brown,
supra note 24, at 901, and MURRAY, supra note 24, at 1331. See also J. Edward Murray,
On Contracts, 163 (3RD ed. 1990). For U.S. scholars who have written on the
Convention, see J. Edward Murray, "An Essay," supra note 22, at 39; See also Christine
Moccia, The United Nations Convention on Contracts for the International Sale of Goods
and the "Battle of the Forms," Fordham Intl. L. J. 650, 657 and 659; See also Pich, supra
note 25, at 1017-19. For Spanish scholars see Jesus Alfaro, Las Condiciones Generales de
la Contratación, Madrid: Civitas, 278, 1991. 42. This criticism of the Vienna Convention, as well as of domestic law, is unanimous among
scholars who argue against the last-shot rule. See Williston, supra note 39, at 134; and
David Slawson, The New Meaning of Contract: The Transformation of Contracts Law by
Standard Forms, 46 U. of Pitt. L. Rev. 58 (1984); and MURRAY, supra note 22, at 43, who
indicates that the right to object to non-material alterations that is permitted by Article 19(2)
CISG allows the offeror to escape from a contract when in fact the non-material alterations
would not effect the contract or the offeror. For this reason, he concludes that Article 19
CISG is not only objectively absurd, but also creates contradictions in the Convention. See
Apart from rapid variations in price, there also other circumstances in which it is possible to
use Article 19 CISG in bad faith. See id. 43. In this sense, it has been said that the mirror-image rule exists only in text books: See
Douglas Baird and Robert Wiesberg, Rules, Standards, and the Battle of the Forms: A
Reassessment of 2-207, 68 VA L. Rev. 1233, (1982).
44. See LG München, 3 July 1989 (17 HKO 3726/89) (Germany) (PACE, English translation)
(UNILEX): a notification of the lack of conformity of textiles made 8 days after delivery was
made in a reasonable time; See also LG Stuttgart, 31 August 1989 (3 kfh O 97/89)
(Germany) (PACE, English translation) (UNILEX): a notification made after 16 days after
delivery of shoes was declared unreasonable; ICC n15713, 1989 (PACE) (UNILEX): a
notification 8 days after the publication of the report of the inspection of goods by an
independent enterprise was deemed reasonable; LG Aachen, 3 April 1990 (41 O 198/89)
(Germany) (PACE) (UNILEX): notice of the lack of conformity of shoes made the day
following of the reception and inspection of the goods was deemed reasonable; Rechtbank
Dordrecht, 21 November 1990 (2762/1989) (Netherlands) (PACE) (UNILEX): notice of lack
of conformity of textiles 15 months after delivery was unreasonable; Rechtbank Roermond,
19 December 1991 (900336) (Netherlands) (PACE) (UNILEX): it was deemed that the
notice of the existence of maggots on cheese must be as short as possible notify to the seller,
since it is a perishable good; Pretore della Giurisdizione di Locarno-Campagna, 27 April 1992
(n1652) (Switzerland) (PACE) (UNILEX): on the basis of the existence of an evident defect
in the furniture sold, buyer had the obligation to inspect and give notice of the lack of
conformity at the same time of the delivery; LG Berlin, 16 September 1992 (99 O 29/92)
(Germany) (PACE) (UNILEX): two months after the delivery of the shoes was not
reasonable. See also LG Berlin, 30 September 1992 (99 O 123/92) (Germany) (PACE)
(UNILEX); Oberlandesgericht (OLG) Düsseldorf, 8 January 1993 (17 U 82/93) (Germany)
(PACE, English translation) (UNILEX): notice 7 days after the delivery of fresh cucumbers
was unreasonable; Rechtbank Roerdmond, 6 May 1993 (920150) (Netherlands) (PACE)
(UNILEX): 3 months in a sales contract of electric machines was deemed unreasonable. But see OLG Innsbruck, 1 June 1994 (4 R 161/94) (Austria) (PACE) (UNILEX): two months
for notifying the lack of conformity of flowers was considered reasonable; Cour d'Appel de
Grenoble, 13 September 1995 (France) (PACE) (UNILEX): a month for notifying the lack
of conformity of cheese was considered reasonable; Amtsgericht Augsburg, 29 January 1996
(Germany) (PACE) (UNILEX): the period for notifying the lack of conformity in the case of
seasonable goods is a month (in the case at hand were shoes) (on the contrary, it has been
stated that for seasonable goods (in the given case: plastic), the reasonable period of time is
8 days: and OLG München, 8 February 1995 (Germany) (PACE) (UNILEX). It is worth noting that some case law attempts to find a uniform solution (Article 7 CISG) by
providing, as a compromise between diverse legal systems, that the reasonable period of time
should be no more than a month. (OLG Stuttgart, 21 August 1995 (Germany) (PACE)
(UNILEX)): since the buyer either knows of the defects or ought to have discovered them;
(Obergericht Kanton Luzern, 8 January 1997 (Switzerland) (PACE) (UNILEX)): because the
delivery of the goods has occurred. 45. This has happened in a case resolved by United States courts: Lea Tai Textile Co. v.
Manning Fabrics, Inc, 411 F.Supp. 1404 (S.D.N.Y. 1975). Manning's form indicated that
the settlement of a dispute would be held in New York by the "American Arbitration
Association" or by an arbitrator of the textile industry, whereas Lea Tai, in its form, specified
that the arbitration would be conducted in accordance with the Civil Code of Hong Kong
with each party choosing and arbitrator. See id. Applying Section 2-207 UCC, the court
invalidated the clauses, forcing the parties to resolve their conflict before domestic courts. See
id. Comparing this case with the Convention rules, Kelso, supra note 26, at 554, points out
that the CISG would apply the last-shot doctrine, and consequently, the Lea Tai form would
therefore be regarded as a counter-offer which was accepted by some act of performance by
Manning. See id. However, the application of the rules in Part II of the Convention would
lead to another result if one took a restrictive interpretation of the terms listed in Article 19(3)
CISG. In other words, an understanding of the term "settlement of disputes" is limited only
to the variations which are directly related to the solution of disputes related to an arbitration
or, to the contrary, an ordinary court. For this reason, judging this case under the norms of
the Convention should lead to the following result: Lea Tai's form should not be considered
a counter-offer because it does not vary the terms of the offer concerning the "settlement of
disputes." But it could be deemed an acceptance with non-material variations of the terms of
the offer relative to the place and the norms of procedure. In this sense, in accordance with
Article 19(2) CISG, and taking into account that there was no objection by the offeror, the
terms of the contract will be those of the offer with the modifications contained in the
acceptance. In other words, there exists an arbitration clause, which assigns the place of
arbitration as Hong-Kong. Therefore, the Rules of the Civil Code of Hong-Kong will be
applied and there will be two arbitrators, one already been chosen by Manning, and one from
the "American Arbitration Association" or from the textile industry. However, under either
view, the result would be arbitration rather than litigation of the dispute. 46. Applications have progressed from the traditional rigidity of the mirror-image rule. See
Hyde v. Wrench (England) 49 E.R. 132 (1840) or the more modern approach of Butler
Machine Tool Co. Ltd. v. Ex-Cell-O Corporation (England) Ltd 1All E.R. 965, 1 W.L.R. 401
(1979). Both decisions are cited in English and American commentaries. For the former see
G. H. TREITEL, The Law of Contract 19 ( 8th ed. 1991); W. R. ANSON, Law of Contract 33 (26th ed. 1984); See also the analysis of these cases in Pitch, supra note 25,
at 1025-29; and Rick Rawlings, The Battle of Forms, 42 Mod.L.Rev. 715-21 (1979).
47. One author, comparing the rules of the Convention on this subject with those of the UCC,
states that the approach followed by the Convention is more similar to the inflexible rules of
the Restatement of Contracts than the flexible criteria adopted by the UCC. See Peter
Winship, International Sales Contracts Under the 1980 Vienna Convention, 17 UCC.L.J.
68(1984). Section 59 Restatement (Second) of Contracts is equivalent to Article 19(1) CISG;
it adopts the principle of the exact identity in the offer and acceptance terms: "A reply to an
offer which purports to accept it but is conditional on the offeror�s assent to terms additional
to or different from those offered is not an acceptance but is a counter-offer". See
Restatement (Second) of Contracts 59 (1995).
48. Some believe that Section 2-207 UCC applies only when at least one of the parties uses
a form. See Brown, supra note 24, at 899; others hold that section 2-207 applies to the
formation of a contract in general. See Williston, supra note 39, at 188. In this way, it is
held that the section was conceived encompass the entire contract formation process. See
John Utz, More on the Battle of the Forms: The Treatment of "Different" Terms Under
the Uniform Commercial Code, UCC.L.J. 112 (1983). This idea appears to be supported
by the legislative history of the section which, at least intitially, was conceived to resolve
the battle of the forms. See John D. Wladis, UCC Section 2-207: The Drafting History: Ending the "Battle-of-the-Forms," A Symposium on the Revision of Section 2-207 of the
Uniform Commercial Code, 49 Bus. Law. 1029 (1994). For the situation in Canada, see
Morris G. Shanker, Battle of the Forms: A Comparison and Critique of Canadian,
American and Historical Common Law Perspectives, 4 Can. Bus. Law. J. 263 (1980).
49. In a very ironic way, Marianne M. Jennings, The True Meaning of Relational Contracts:
We Don't Care About the Mailbox Rule, Mirror Images, or Consideration Anymore -- Are
We Safe? 73 Den.U.L.Rev. 8-9 (1995), points out the discrepancies among courts in
interpreting section 2-207: "Some courts follow the Montessori playground philosophy of
who hit first; that is, if there is a term in the offer (purchase order) and not in the acceptance,
the term comes in as part of the contract. In states where courts follow this "me first"
Montessori philosophy, all merchants possess a strong desire to be an offeror. Other court
follow a "huh-uh, no sir" philosophy and provide that conflicting terms or terms found in one
form but not in the other, cancel each other out. Still, other courts follow the "come back
when you agree" philosophy. These courts get into the issue of conditional acceptance and
from there, dive head-on into the intricacies of section 2-207 and the realization that section
2-207 applies to additional terms, not different terms. This brings us to another assemblage
of courts that say, 'Look, if these folks can't agree and their dang forms conflict, toss
everything out and rewrite the dang contract for them.'" Id. 50. Williston, supra note 39, at 141-42; and 1 E. Allan Farnsworth, On Contracts, 262
51. See Brown, supra note 24, at 894; See also Murray, supra note 24, at 1308.
52. Williston, supra note 39, at 142. 53. Baird and Weisberg, supra note 41, at 1222; See also David Vaver, "Battle of the Forms:"
A Comment on Professor's Shanker's View, 4 Can. Bus. Law. J. 282 (1980).
54. Murray, supra note 22, at 40; See also Andre H. Friedman, The U.N. Convention on
Contracts for the International Sale of Goods, Digest of Commercial Laws of the World, 15
(1988). 55. The National Conference of Commissioners on Uniform State Laws, which governed the
revision of Article 2 UCC, has focused its forces on re-writing Section 2-207 on the basis of
two drafts which are examined by Thomas J. McCarthy, An Introduction: The Commercial
Irrelevancy of the "Battle of the Forms," In Ending the "Battle of the Forms". A Symposium
on the Revision of Section 2-207 of the Uniform Commercial Code. 49 Bus. Law. 1019-28
(1994); See also Mark E. Roszkowski and John D. Wladis, Revised U.C.C. Section 2-207:
Analysis and Recommendations. Ending the "Battle of the Forms," A Symposium on the
Revision of Section 2-207 of the Uniform Commercial Code. 49 Bus. Law. 1065-80 (1994). See also Daniel Ostas and Frank Darr, Redrafting U.C.C. Section 2-207: An Economic
Prescription for the Battle of the Forms, 76 Denv. U. L. Rev., 419-26 (1996). These authors
examine section 2-207 UCC from an economic point of view. See id.. In their opinion, the
future version of section 2-207 UCC must address the following issues: a) respect for
individual autonomy; b) reducing transaction costs; and c) providing legal stability 410-15.
See id. 56. See id. See also Ostas and Darr, supra note 53, at 413. "[T]he current 2-207 creates a
perverse incentive to carefully read and consider the fine print on each and every invoice or
purchase order received." Id. 57. Brown, supra note 24, at 897, 904. One of the objectives of Section 2-207 UCC is to
refute the mirror-image rule. See id. What she does not say, however, is that under the
last-shot doctrine, the offeror is the master of his offer. See id. This is because the
acceptance, which introduces material modifications, will no longer be an acceptance, but a
new offer, whose terms can be incorporated into the contract by acts of performance which
express an intention to accept. See Official Comments 4 and 5, Section 2-207, UCC; See also
Murray, supra note 24, at 1360. He believes that the principal objective of the section is to
avoid "oppression and the unfair surprise." Id.
58. The manner in which this has been handled by the courts has been questioned by R.W.
Duesenberg, Contract Creation: The Continuing Struggle with Additional and Different
Terms under Uniform Commercial Code Section 2-207, 34 Bus.Law. 1484 (1979). See also
Ostas and Leete, supra note 25, at 381-82, for the German solution -contradictory terms are
changed by usages- which seems preferable. 59. See Murray, supra note 39, at 172; See also Pitch, supra note 25, at 1043 and Ostas and
Darr supra note 53, at 406. The difficulty with section 2-207(1) UCC lies in distinguishing
a "definite expression of acceptance" from an "expressly conditional acceptance." Id.
60. See Roto-Lith, Ltd v. F.P. Barlett & Co, 297 F.2d 497 (1st Cir.1962) [hereinafter Roto-Lith]; see also Murray, supra note 24, at 1330.
61. See Murray, supra note 22, at 41.
62. "Viewing the Subsection (1) provision within the context of the rest of the rest of that
Subsection and within the policies of 2-207 (1) itself, we believe that it is intended to apply
only to an acceptance which clearly reveals that the offeree is unwilling to proceed with the
transaction unless he is assured of the offeror�s assent to the additional or different terms
therein." Williston, supra note 39, at 239-40, citing Dorton v. Collins & Aikman Corp., 453
F.2d 1161(6th Cir. 1972), where the reply to the offer was: "my acceptance is subject to all
of the terms and conditions contained within the front and reverse side of it, including the
arbitration clause." The court ruled that this does not satisfy the requirements of Section
2-207 (1) UCC. See id.
For a clause held to conform to the statutory text, see C. Itoh & Co. v. Jordan Int�l Co., 552
F.2d 1228 (7h Cir.1977), where the reply to the offer by Jordan, which introduced an
arbitration clause, was as follows: "the acceptance by the seller . . . is expressly made
conditional on assent to the additional or different terms below indicated and to the preprinted
on the reverse side of the document. If these terms and conditions are not acceptable, the
buyer should notify it at once." Id. The court held that this reply satisfied the requirements
of Section 2-207(1) UCC, but that the contract could not be deemed concluded according to
the dictates of the subsection. See id. This is because the buyer (Itoh) had not assented to
the seller's terms; nevertheless, the existence of the contract was recognized according to
subsection 3 (knock-out rule): the terms of the contract were derived from the common terms
and the supplementary terms taken from the UCC, excluding the arbitration clause. See id.
For further comments on U.S. law, see Williston, supra note 39, at 153; Brown, supra note
24, at 917; John D. Calamari and Joseph M. Perillo, The Law of Contracts 105 (3d
ed. 1987); Murray, supra note 24, at 1330, who summarizes the U.S. doctrine; and Pitch,
supra note 22, at 1044. One author has sought to examine the Itoh case under the rules of
the Convention; this analysis gives a different result: Itoh sends his offer to Jordan, who
answers with the clause mentioned above, which includes an arbitration clause. This is a
counter-offer because it introduces a term that materially modifies the offer (Arts. 19(1) and
19(3) CISG). There is a subsequent acceptance of the goods by Itoh, who accepts the terms
of Jordan�s counter-offer, therefore the arbitration clause is deemed to be part of the contract. See id. 63. This process, sometimes referred to as "dickered terms," includes a description of goods,
price, quantity and delivery terms.
64. See Calamari and Perillo, supra note 60, at 108, who, nevertheless, report the
existence of opposite case law. 65. Murray, supra note 39, at 174; James J. White and Robert S. Summers, Uniform
Commercial Code, 42 (3d. ed. 1995). White regards the application of the knock-out rule
as appropriate, since the supplementary rules of the UCC, which are qualified as neutral, will
control. See id. Summers, however, points out that this solution is contrary to the common
law, which recognizes acceptance by conduct. See id.
66. See Baird and Weisberg, supra note 41, at 1244. This subsection was originally written
to regulate the conflicting terms of written confirmations and not to regulate the battle of
the forms. See id. For this reason, the authors state this subsection has generated much
conflict. See id.
67. See Ostas and Darr, supra note 53, at 405-6, point out. The authors point out that:
"Unfortunately, section 2-207(2) contains at least two major difficulties. First, the subsection
gives a strong preferences to offerors. A second problem with section 2-207(2) arises from
its silence regarding 'differing' terms." Id.
68. See Calamari & Perillo, supra note 60, at 104. This distinction between additional and
different terms is difficult to illustrate, as an offeror may include in his offer not only express
terms, but also implied terms. Some subscribe to the point of view that an added term in the
acceptance should be considered as additional; But see Summers & White, supra note 63,
at 36. Summers understands that the implied terms must be treated as different. See id.;
Murray, supra note 24, at 1361-1362, agrees with Summers. He adds an exception
concerning exclusion of terms by the offer. See Brown, supra note 24, at 932, who indicates
that the comparison between the terms of the forms must be made only by reference to the
express terms of the offer; otherwise, it would be impossible to determine the offeror�s
intention. 69. See Waldis, supra note 46, at 1050. The legislative history of the section is clear: in
subsection (a) the drafters rejected the regulation of different terms. See id. See also
Baird and Weisberg, supra note 41, at 1240; Duesenberg supra note 56, at 1483; and
Brown, supra note 24, at 930. But see Murray, supra note 24, at 1358, 1364; Murray,
supra note 22, at 178 ; and Utz, supra note 46, at 105. Utz explains the discrepancy
stating: "the present Code contains a critical printer�s omission." Id. 70. See White & Summers, supra note 63, at 34-35; See also Murray, supra note 24, at 1354. For support of Professor Summer's view, see Calamari and Perillo, supra note 60, at
104-5. See also Official Comments 3 and 6 of Section 2-207 U.C.C. 69-70. 71. See Wladis, supra note 46, at 1049 The words unreasonably and reasonably are also used
in comments 4 and 5 to describe the clauses that materially alter or do not alter the offer. It
is important to note that it is not the materiality of the term, but the materiality of the
alteration wrought by it, that is the standard of Section 2-207 (2)(b); compare with Brown,
supra note 24, at 933, who understands that the substantiality must refer to the contract and
not to the offer. 72. See Baird and Weisberg, supra note 41, at 933, discussing the dramatic change in the
traditional rules of offer and acceptance. 73. See Official Comments 4 and 5 to section 2-207 UCC: Uniform Commercial Code 69. Other
clauses that usually are deemed to materially alter the elements of the offer are: arbitration
clauses; clauses that forsee the lawyers fee; clauses that alter the quantity term in a
requirement or output contract, and so on. See also WHITE and SUMMERS, supra note
63, at 33. They seem to understand that terms which materially alter those of the offer are
not only those that refer to the price, quality, quantity, and delivery terms, but also those
usually incorporated at the back of documents which are not discussed. See id. See also
Williston, supra note 39, at 205. Despite of the help in interpretation provided by Comments
4 and 5, it is pointed out that they may not be applied and interpreted literally as is usually
done by the courts.
74. CISG Article 2.209 (Conflicting General Conditions) Principles of European Contract
Law indicates that: "(1) If the parties have reached agreement except that the offer and
acceptance refer to conflicting general conditions of contract, a contract is nonetheless
formed. The general conditions form part of the contract to the extent that they are
common in substance. (2) However, no contract is formed (a) if one party has indicated in
advance, explicitly, and not by way of general conditions, that he does not intend to be
bound by a contract on the basis of paragraph 1; or (b) if later on, one party, without
undue delay, informs the other party that he does not intend to be bound by such contract.
(3) General conditions of contract are the terms which have been formulated in advance
for an indefinite number of contracts of a certain nature." Id.
75. See UNIDROIT art. 2.22 cmts. 2 and 3.
76. To help understand this effect, the following illustration is given: "A orders a machine from
B indicating the type of machine, the price and terms of payment, and the date and place of
delivery. A uses an order form with its 'General Conditions of Purchase' printed on the
reverse side. B accepts by sending an acknowledgement of order form on the reverse side
of which appear its own 'General Conditions of Sale.' When A subsequently seeks to
withdraw from the deal it claims that no contract was ever concluded as there was no
agreement as to which set of standard terms should apply. Since, however, the parties have
agreed on the essential terms of the contract, a contract has been concluded on those terms
of the contract and on any standard terms which are common in substance." UNIDROIT
art. 2.22 cmt. 3.
77. "Standard terms" are defined as: "provisions which are prepared in advance for general and
repeated use by one party and which are actually used without negotiation with the other
party." UNIDROIT art. 2.19(2)
78. UNIDROIT art. 2.19 indicates that: "Where one party or both parties use standard terms
in concluding a contract, the general rules on formation apply, subject to UNIDROIT arts.
2.20-2.22." Id.
79. In relation to what should be understood by "clearly," UNIDROIT art. 2.22 cmt. 3,
indicates that: "the inclusion of a clause of this kind in the standard terms themselves will not
normally be sufficient since what is necessary is a specific declaration by the party concerned
in its offer or acceptance." Id. 80. See Cour d'appel de Grenoble, 24 January 1996 (France). There, the contract contained
a liability clause which incorporated the carrier's standard conditions of sale. This clause
limited the carrier's liability to $50.00 per shipment. According to the Court, "while every
single page of the contract bore the signature of both parties, the general terms, printed in
miniscule lettering, had been neither signed nor initialed by the client, and that as a
consequence, it was not possible to establish that it was aware of these terms at the time
of signing the contract." Id. The Court concluded that the general terms clause limiting
liability to a nominal sum so low as to constitute virtually no compensation at all, ran
counter to the principle of acceptance of liability spelled out in the contract. See id. The
Court held that "there was a principle, in international trade law, that 'in the event of
incompatibility between a standard clause and a non-standard clause, the latter prevails
(UNIDROIT art. 2.21)' and that 'if contract terms are unclear, an interpretation against
the party that supplied them is preferred (UNIDROIT art. 4.6).'" Id. The conclusion was
clear: the general term was invalid. See id. See also the abstract in English and French in 1
Uniform Law Review 180 (1997). 81. See Principles of European Contract Law, art. 5.104 -- Preference to Negotiated Terms --
which establishes that "Terms which have been individually negotiated take preference over
those which are not." Id.
82. UNIDROIT art. 2.20 cmt. 2 indicates that "regard must be had on the one hand to the terms
which are commonly to be found in standard terms generally used in the trade sector
concerned, and on the other to the individual negotiations between the parties." Id.
83. It is noted that "Other reasons for a particular term contained in standard terms being
surprising to the adhering party may be the language in which it is couched, which may be
obscure, or the way in which it is presented typographically, for instance in minute print."
UNIDROIT art. 2.20 cmt. 3. It is also noted that "regard is to be had not so much to the
formulation or presentation commonly used in the type of standard terms involved, but more
to the professional skill and experience of persons of the same kind as the adhering party."
Id. Lastly, the foreign language of the clause could result in surprise to the party who does
not fully understand the language and who could not appreciate all the implications. See id.
84. Similar to this Article, Principles of European Contract Law art. 2.104 -- Not Individually
Negotiated Terms -- states that: "(1) Contract terms which have not been individually
negotiated may be invoked against a party who did not know of them only if the party
invoking them took reasonable steps to bring them to the other party's attention before or
when the contract was concluded. (2) Terms are not brought appropriately to a party's
attention by a mere reference to them in a signed contract document." Id.
85. See UNIDROIT art. 7.1(6) cmt. 1 - Exemption clause. However, UNIDROIT arts. 3.10
and 7.1(6) indicate that an exemption clause may not be invoked if it would be grossly unfair
to do so. 86. See UNIDROIT art. 4.1 cmt. 4 (Intention of the parties).
87. Principles of European Contract Law, art. 2.208 -Modified Acceptance- states that: "(1) A
reply by the offeree which states or implies additional or different terms which would
materially alter the terms of the offer is a rejection and a new offer. (2) A reply which gives
a definite assent to an offer operates as an acceptance even if it states or implies terms
additional to or different from the terms offered, provided the additional or different terms
do not materially alter the terms of the offer. The additional or different terms then become
part of the contract. (3) However, such a reply will be treated as a rejection of the offer if: (a)
the offer expressly limits acceptance to the terms of the offer; or (b) the offeror objects to the
additional or different terms without delay; or (c) the offeree makes his acceptance
conditional upon the offeror's assent to the additional or different terms, and the assent does
not reach the offeree within a reasonable time." Id.
88. BGB � 150.2 Eine Annahme unter Erweiterungen, Einschränkungen oder sonstigen
Änderungen gilt als Ablehnung verbunden mit einem neuen Antrage. However, in the
German Civil Code, there is no difference between material modifications and non-material
ones, even though the case law has succeeded in relaxing the norm. In Austrian law,
following the German example, it is indicated that an acceptance with modification is also a
counter offer. See stern, supra note 30, at 47; and bydlinski, supra note 35, at 71. 89. See UNIDROIT art. 2.11 (2) (Modified acceptance) and ULF art. 7 (1964).
90. The UNIDROIT has no article similar to CISG art. 19(3). However, the UNIDROIT
comments reach the same result by enumerating the terms listed in CISG art. 19(3), and thus
consider them as material.
91. There are judicial decisions on the materiality of the alteration contained in the reply to the
See LG Baden-Baden, 14 August 1991 (Germany) (UNILEX), published in Recht der
Internationalen Wirtschaft, 1992, p. 62-63: A clause that states that the notice of defects are
valid only if made within 30 days after the date of the invoice is not a material alteration of
OLG Hamm, 22 September 1992 (Germany) (UNILEX): considering a material alteration
a counter offer relating to the packaging of bacon (the offer stated "in Säcken" while the
counter-offer said "losen");
LG Giessen, 22 December 1992, affirmed by OLG Frankfurt am Main, 4 March 1994
(Germany) (UNILEX). In this case, the court considered additions and variations in the
acceptance related to the payment (the addressee replied, insisting on advance payment or the
opening of a letter of credit), as well as the change in the quality offered. For a similar view
relating to payment terms under the ULF, see OLG Hamm, 21 March 1979 (Germany);
Cámara Nacional de adelacions en lo Comercial, 14 October 1993 (Argentina) (UNILEX),
judging a forum selection clause; Cour de Cassation, 4 January 1995 (France) (UNILEX), commented on by Claude Witz, Le
premier arrêt de la Cour de cassation confronté à la Convention de Vienne sur la vente
internationale de marchandises.-Note sous Cass. 1re civ., 4 Jan. 1995, Recueil Dalloz
Sirey 289 (1995); and Tomás Vazquez Lepinette, La Conservación de las Mercancías en
la Compraventa Internacional: Primera Jurisprudencia, Revista General de Derecho
3437 (1996). In this case, the order stated a future revision of the price in case of a decrease
in market prices, while the seller's reply stated a future revision according to both an increase
and decrease in market price. The seller was not able to confirm the order with regard to
some of the items. See id. The Appellate Court held that the reply by the seller did not
materially alter the terms of the offer. See id. This statement was confirmed by the Supreme
Court. See id.
See also OLG München, 8 February 1995 (Germany) (UNILEX): the reply (delivery July,
August, September, October) to an offer (delivery between July and the 15th August) is a
counter offer; OLG Hamm, 6 April 1978 (Germany); OLG Hamm, 7 December 1978 (Germany); and OLG Hamm, 17 December 1981 (Germany) for the ULF. See OLG Frankfurt am Main, 31 March 1995 (Germany) (UNILEX), which declared that a
contract was not concluded, since the offer stated the quality of the glass ("Fiolax"), while
the purported acceptance stated ("Duran") and there was no subsequent conduct of the
parties showing the existence of the contract. See id.
92. See von HUBER, supra note 35, at 413, who, referring to Article 17 of the 1978 Draft
Convention, thinks that it is a question of validity, so its regulation must be decided by the
applicable domestic law through the application of CISG art. 4. Nevertheless, he indicates
that if only one of the parties uses general conditions, its validity will be regulated by the
Convention rules. See id. See also François Dessemontet, La Convention des Nations Unies
du 11 Avril 1980 sur les Contrats de Vente Internationale de Marchandises, in Les
contrats de vente internationale de marchandises 56 (F. Dessemontet, ed., 1991);
Monique Jametti Greiner, Der Vertragsabschluss, in Das Uncitral-Kaufrecht im
Vergleich zum österrichischen Recht. Wien: Manz 46 (P. Doralt, coord., 1985);
holger muller & hans- herrman otto, Allgemeine Geschäftsbedingungen im
internationalen Wirtschaftsverkehr 40 (1994); Beverly M. Carl, Contratos
Internacionales: la Compraventa de Mercaderías entre Empresas de Países con Distintos
Sistemas Jurídicos, 34 Revista de la Facultad de Ciencias Jurídicas y Políticas,
Universidad Central de Venezuela 341 (1989), who points out that a good solution may
be the one contained in section UCC �2-207 (3). See also PICH, supra note 25, at 1089,
who believes there is a gap filling when a contradiction between clauses exists, and although
he explains the two main solutions to this problem, he does not choose one.
93. See Oberster Gerichtshof, 6 February 1996 (Austria) (UNILEX), indicating that since the
CISG does not have any express rule dealing with general conditions, the formation rules
apply. Also, the negotiations and the practices established between the parties must be taken
into account. See also OLG Hamm, 18 October 1982 (Germany): applying the ULF
formation rules to determine the inclusion of general conditions to the contract. See also
Perillo, supra note 17, at 289, who believes the formation rules are not useful to solve
battle-of-the-forms problems. 94. See generally, UNCITRAL Yearbook, vol.VIII, p. 82. See also Honnold, supra note
22, at 284. 95. See Official Records (A/CONF.97/C.1/SR.10, in A/CONF.97/19 at 288-289. Some authors
take advantage of this rejection to place the battle of the forms outside the scope of the
Convention. See Jan Hellner, The Vienna Convention and Standard Form Contracts, International Sales of Goods 342 (1986).
96. See Official Records (A/CONF.97/C.1/SR.10, in A/CONF.97/19, pfos. 90-92, pp. 288-289. 97. See Van Der Velden, supra note 22, at 241 and Moccia, supra note 39, at 667. Another
commentator finds it difficult to evaluate the acts of performance as acts of acceptance when
there is a battle of the forms. See Mario Frigo, L�Efficacia delle Condizioni Generali di
Contratto alla luce delle Convenzioni di Roma e di Vienna del 1980, 537 Diritto del
Commercio Internazionale (1993). See also Louis Del Duca and Patrick Del Duca,
Practice Under the Convention on International Sale of Goods (CISG): A Primer for
Attorneys and International Traders (Part II), 29 Uniform Commercial Code L. J. 122
(1996), who state that the CISG does not give any answer where there is a battle-of-the-forms conflict and a subsequent performance of the contract. Therefore, the general
principles of the CISG and private international law must be looked at to resolve such
questions. 98. See Van Der Velden, supra note 20, at 243; See also Moccia, supra note 39, at 667. Other authors simply indicate that the general principles of the CISG contained in Part II are
applied. See Louis Del Duca and E. Guttman, Problems and Materials on Sales
Under the Uniform Commerical Code and the Convention on International Sale of Goods,
Commercial Transactions, Vol. 2, 176 (1993). Others say that the battle of the forms
is a gap in the Convention, because the Belgian proposal was rejected during the Diplomatic
Conference. See Hellner, supra note 93, at 342; and Drobnig, supra note 30, at 126
(indicating that the solution does not give an answer to the problems, without mentioning the
Belgian proposal).
99. See generally Stahl, supra note 34, at 381; and Ludwig, supra note 38, at 412, who,
although in favor of the application of the last-shot rule, thinks the tacit derogation of Article
19 is possible when it could be derived from an usage of trade of CISG art. 9. See also this thesis as adopted by Amtsgericht Kehl, 6 October 1995 (Germany) (UNILEX). 100. See Luis Diez-Picazo, "Condiciones Generales de la Contratación y Cláusulas Abusivas,"
In Encuentros sobre Derecho Iberoamericano, Derecho Privado, Fundación BBV, 1995, p.
8; and Una nueva doctrina general del contrato? Anuario de Derecho Civil, 1993, tomo
XLVI, fasc. IV, p. 1716; See also Bernard Audit, La Vente Internationale de marchandises
(Convention des Nations-Unies du 11 Avril 1980). Droit des Affaires. Paris: L.G.D.J., 1990,
p. 70. See also Pich, supra note 25, at 1083. 101. A slight variation of this thesis is the one which understands that Article 19(2) may be
applied when there is a non-material modification, with domestic law applied when there is
a material modification: See Hellner, supra note 93, at 341-42 and 351 et seq, who,
nevertheless, finally indicates that it is preferable that the battle of forms no be regulated by
the Convention, supporting his opinion by reference to the rejected Belgian proposal.
102. See CISG art. 18(1). Many Vienna scholars agree that the Convention applies the
last-shot rule. Neumayer could not be more explicit -even though he dedicates a great part
of his article to questioning the advantages and disadvantages of the different solutions, he
indicates that the knock-out rule does not find support in the Convention. See Neumayer,
supra note 38, at 524. See also Herber and Czerwenka, supra note 34, at 107. Honnold thinks that two theories, with opposite consequences, might be advanced: 1) When
seller received no acceptance to the counter-offer, he accepted the initial offer by shipping the
goods; 2) Buyer, by receiving and accepting the goods, accepted Seller�s counter-offer. See Honnold, supra note 22, at 195. The first theory is, however, contrary to the Vienna
Convention because the reply to the offer with material alterations is a rejection and a new
offer (art.19(1) and (3), in relation with Article 17), should make it impossible for the original
offer revive. See the criticism of Professor Honnold's position by Moccia, supra note 41, at
673-674. Some authors do not analyze the problem taking into account the acts of
performance, but in a theoric plane of exchange of forms they indicate that contradictions of
forms are always material, so the contract is not concluded. See Neumayer and Ming,
supra note 34, at 185-86. 103. See Pilar Perales Viscasillas, Contract Conclusion Under CISG, 16 J. of L. and
Commerce 315, (Issue 2) 1997.
104. See Velden, supra note 20, at 241. He takes the position that mere acts of performance
cannot be deemed an acceptance of these terms. See id. In his view, for this to happen must
be aware the previous offeror of the contradictions between the two sets of forms, and that
such awareness can be demonstrated. See id. For example, when he makes acts of
performance in conformity with the conditions of their counterpart and, at the same time, in
disconformity with his own. See id. This thesis is confusing; we cannot understand how an
act of execution (acceptance of the goods or payment of the price) can show conformity with,
for example, an arbitration clause in the counter-offer and, at the same time, indicate a
rejection of his previous requirement that disputes be submitted to the courts. See id. See
also Stoffel, supra note 34, at 75. He states that the conditions that must be met for an
acceptance by acts of performance in accordance with Article 18(3) CISG are doubtfully
satisfied when there is a battle of the forms followed by acts of performance. See id. He
would solve the battle of forms problem by applying the applicable substantive law. See id.
See Walter F.VonPetzinger, "Battle of Forms" und Allgemeine Geschäftsbedingungen im
amerikanischen Recht. Recht der Internationalen Wirtschaftrecht, 1988, p. 679; and see
Herber and Czerwenka, supra note 34, at 106, for authors who understand that such an
acceptance is in conformity with Article 18 CISG.
105. For case law under the CISG applying the rules of the formation of the contract (offer and
acceptance) to determine the inclusion of general conditions at the back of the forms, see
OLG Saarbrucken, 13 January 1993 (Germany) (PACE) (UNILEX): Cour d�Appel of Paris,
13 December 1995 (France) (PACE) (UNILEX); and Amtsgericht Kehl, 10 June 1995
(Germany) (PACE) (UNILEX). The following cases judged under the Hague Formation Law have applied the last-shot rule
to the battle of the forms: LG Landshut, 14 July 1976 (HK O 135/75) (Germany); OLG
Hamm, 18 October 1982 (2 W 29/82) (Germany); HOF S-Gravenhage, 25 March 1983
(Netherlands); LG Bielefeld, 5 June 1987 (12 0 122/86) (Germany). See also the comment
to the last one by I. Schewnzer, "The Battle of the Forms" und das EAG, IPrax, 1988, n.14, pp. 212-14, and the abstracts at 229-30.
106. This is acknowledged by authors such as Vergne, supra note 25, at 254, who is not a
supporter of the Article 19 rule. He points out that the solution of Article 19 is simpler and
easier to apply than Section 2-207 UCC. See also Ugo Draetta, La Battle of Forms nella
prassi del commercio internazionale, Rivista di Diritto Internazionale Privato e
Processuale, 326, n.12, 1986 (a supporter of the last-shot rule).
107. See Murray, supra note 21, at 291.
108. See OLG Hamm, 29 April 1982 (Germany), published in IPrax, 1983, p.231 (ULIS). See
also Peter Schlechtriem, The Seller's Obligations Under the United Nations
Convention on Contracts for the International Sale of Goods, En International
Sales, The United Nations Convention on Contracts for the International Sale
of Goods, 6-6, (1984), citing the ULIS case.
109. See WHITE and SUMMERS, supra note 63, at 28-52. They study 8 cases that we will use
in their basic structure, although, in order to have a better understanding, we will make some
variations. At the end of the present study we include a comparative diagram where the
results we will reach can be appreciated in a better way. Pace Law School Institute of
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