COMPARATIVE PRIVATE LAW

FORMATION

University of Oslo

Prof. Giuditta Cordero Moss

Case I – Written Amendment

• Installation contract between constructor and sub-contractor

• Contractual price turns out to be insufficient (no margin of profit for sub-contractor)

• Sub-contractor proposes increase of price and constructor agrees

• Written amendment agreement• Constructor finds another sub-contractor and

revokes amendment• Was the amendment binding?

Case I- Was the amendment binding?

• English law:

Amendment is not enforceable

• Others:

Amendment is binding and enforceable

Case II- Irrevocable offer

• Tender for construction

• Contractor makes a bid

• Bid based on local sub-contractors’ prices

• Contractor is awarded the contract

The subcontractors’ offer

• ”This offer is binding on the offeror and cannot be revoked before 30 days have elapsed from the date hereof”

• Subcontractor revokes the offer before the term (but after the the contract was awarded)

Case II- Was the offer binding?

• English law:

The offer was not enforceable

• Others:

The offer was binding and enforceable

Case III-Modified Acceptance

• Seller and Buyer agree on the phone on quality, volume, price, delivery place, and agree to send written confirmation

• Seller sends confirmation specifying that transport to be made on ship at seller’s discretion

• Buyer sends acceptance, but requests ship of certain nationality

• Seller does not reply• At moment of shipment, seller says that the

contract was not concluded

Case III – Was the contract concluded?

• Norwegian, Italian, English law:

No

• German law, CISG, UNIDROIT, PECL:

Yes

Case IV – Battle of the Forms

• Seller and Buyer agree on the phone on quality, volume and price

• Seller sends offer on pre-printed general sale conditions. Conditions contain limitation of liability for delays

• Buyer sends acceptance on pre-printed general purchase conditions. Conditions contain no limitation of liability except for force majeure

• At time of delivery shortage of goods prevents timely delivery

Case IV- Was contract binding, is liability limited?

• Norwegian, Italian, English law, CISG:

• No contract• If performance was

started: contract is binding, no limitation of liability (”last shot”)

• German law, UNIDROIT, PECL:

• Contract is binding• Neither of the liability

clauses is applicable (”knock out”)

Case V- Break-off of negotiations

• Negotiations between car producer (”Carp”) and component producer (”Comp”) for joint production

• Plant identified, neg. teams discuss technical design, allocation of personel, funding, profit-split

• Result of negotiations to be recorded in MoU by each team; MoUs to be transformed into contract

• From the start Carp negotiates in parallel with other comp (”Comp 2”). Towards the end of the negotiations Carp breaks off with Comp and enteres into contract with Comp 2

Case V- Is Carp responsible for break-off?

• Norwegian, German, Italian law, UNIDROIT, PECL:

Comp is entitled to reimbursement of damages

• English law, CISG:

No liability

Common Features

• Contract is concluded by exchange of conforming offer and acceptance. Acceptance can be tacit.

Norwegian Law

• Act on Formation of Contracts §§ 1-9

• Exchange• No form requirements• Offer is binding• Acceptance must

conform – otherwise: counter-offer

• Mirror image rule (unless awareness of misunderstanding)

• Last shot rule

• Progressive creation of consent (formal contract not necessary)

• Duty of loyalty in negotiations

German Law

• §§ 145 ff BGB• Exchange• No form requirements• Offer is binding• Acceptance must conform,

otherwise counter-offer• Mirror image rule but, if parties

have interest, only modified part is deemed counter-offer §155)

• Battle of the forms: if contract is deemed concluded, knock-out (§154)

• No contract until all points agreed upon (§154.1)

• Formal contract necessary if parties referred to it (§154.2)

• Culpa in contrahendo (§311.2, 241.2

Italian Law

• Art. 1325 cc• Agreement, causa (art. 1343: legal), object, form

(only for certain contracts)• Exchange• Offer revokable unless firm (1329)• Acceptance must conform, otherwise counter-

offer• Mirror image rule• Good faith in negotiations (1337)

English Law

• Exchange

• Consideration

• Offer is revocable even if firm

• Acceptance must conform, otherwise counter-offer

• Mirror image

• No duty of loyalty or good faith

CISG

• Exchange (art. 23)• No form, no causa, no consideration• Amendment is valid by mer agreement (29.1)• Offer revocable unless firm (16)• Conforming acceptance, otherwise counter-offer (19.1)• Minor modifications acceptable (19.2), but: most

modifications are material (19.3)• No specific rule on general conditions: mirror image +

last shot (last shot directly only if minor modifications)• No pre-contractual liability

UNIDROIT Principles

• Exchange (3.2)• No form, no causa, no consideration• Offer revocable unless firm (2.4)• Mirror image + last shot• Directly last shot if immaterial

modifications (2.11)• Battle of the forms: knock-out (2.22)• Negotiations must be in good faith( 2.15)

PECL

• Mere agreement (2:101(1))

• Revocable offer, unless firm (2:202)

• Last shot if immaterial modifications (2:208)

• Battle of the forms: knock-out (2:209)

• Negotiations in good faith (2:301)

Main differences

• Consideration

• Mirror image vs. Knock-out

• Pre-contractual liability