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CISG Contract - Coggle Diagram
CISG Contract
Contract
General Exclusions
Customary usage
between the parties is relevant only if necessary to clarify ambiguous contract terms. (VLM Food)
Oral Negotiations and Course of Conduct:
court only addresses them to resolve discrepancies between oral and written agreements. (VLM Food)
Invoices with additional terms
sent after the contract formed do not modify the contract.
Standard conditions
are not incorporated into a contract unless one party attempts to incorporate the standard conditions and the other party has reasonable notice of that attempt.
Roser Technologies:
CSN attempted to incorporate the standard conditions by referring Roser to a website. This language was ambiguous, and there is no evidence that the parties discussed the standard conditions or that Roser was even aware of them. Conditions not part of the contract.
Industry Practices:
Contracts do not automatically incorporate industry practices under the CISG. (VLM Food)
Offer
Definition and
Requirements
Valid Offer:
specify the product, quantity, and price, just like under the UCC. (VLM Food)
Article 14 (offer):
(1) A proposal for concluding a contract that is addressed to one or more specific person is an offer if it is definite and indicates the offeror’s intent to be bound by an acceptance.
Article 14 (definite):
(1) indicates goods; and (2) provisions for determining the quantity and price
Effective
Article 15 (Withdraw):
An offer can be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.
Article 15 (Effective):
An offer is effective when it reaches the offeree.
Revoking
Article 16 (cannot be revoked):
cannot be revoked (a) if it states in some way that it’s irrevocable; or (b) it’s reasonable for the offeree to rely on it as irrevocable and has acted in reliance on the offer.
Article 16 (can be revoked):
Until a contract is concluded, an offer
can
be revoked if it reaches the offeree before they have provided an acceptance.
Article 17 (Rejection):
An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror
Acceptance
Article 18 (assent to offer):
Statement or a conduct by the offeree indicating assent to an offer is an acceptance. However, the offeree can consent by performing an act per the offer or practices between the parties. Even without notice to the offeror, the acceptance is effective.
Article 18 (not acceptance):
Silence and inactivity are not acceptance.
Effective
Article 22 (Withdraw):
An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective.
Article 23 (contract concluded):
A contract is concluded at the moment when an acceptance of an offer becomes effective. (Article 18)
Article 24 (how it reaches them):
An offer, acceptance, or any other indication of intention “reaches” the addressee when it is spoken or delivered to them personally (place of business, mailing address, habitual residence).
Article 18 (effective when it reaches the offeror):
An acceptance of an offer is effective when the assent reaches the offeror. It is not effective if the assent does not reach the offeror within the fixed time or a reasonable time, if there is no fixed time.
Article 19 ("Mirror-image” Rule):
the acceptance does not add, limit, or change the offer’s terms in any way
Offeror Doesn't Object:
A reply that has terms different terms from the offer can be an acceptance if they do not materially alter the terms in the offer. If the offeror does not reject, the modifications become part of the contract.
Material Terms:
Different terms relating to price, payment, quality of goods, quantity of goods, place and time of delivery, extent of liability, settlement disputes, etc, alter the offer materially.
Additional Terms:
A reply that includes additional terms is a rejection and counteroffer
Article 18 (oral offer):
An oral offer must be accepted immediately, unless other circumstances indicate otherwise.
Continuing to Place Orders:
Illinois Trading’s purchase orders met the requirements of a valid offer by specifying the product, quantity, and price. VLM’s e-mails confirmed those terms without alteration, qualifying as acceptance. Therefore, the contracts formed at that point and did not include the fee-shifting provision appearing in VLM’s trailing invoices. Illinois Trading never affirmatively agreed to modification. Continuing to place orders does not mean Illinois Trading agreed to fee-shifting. (VLM Food)
Article 11 (form):
The contract doesn’t need to be in any specific form, including witnesses.
Article 8 ("Parol Evidence Rule"):
CISG allows for the introduction of extrinsic evidence to establish the parties' subjective intent or to allow trade usages to be introduced
(2) If Article 8(1) doesn’t apply, conduct and statements made by either party should be interpreted based on what a reasonable person in the same position would have interpreted.
(3) When deciding the intent, consideration should be given to all relevant circumstances, including: (1) negotiations; (2) practices between the parties; and (3) usages and any subsequent conduct of the parties.
(1) Conduct and statements from either party should be interpreted by their intent when the other party knew or should have known the intent.
Multiple Places of Business (Article 10):
If a contracting party conducts business in multiple locations, the location that has the closest relationship to the contract and its performance is selected for purposes of determining applicability of the Convention on Contracts for the International Sale of Goods.
If a party has more than one place of business, the relevant location is the one that has the closest relationship to the contract and its performance
Federal district courts have original jurisdiction over claims arising under a United States treaty
Exceptions
Article 1 (2):
If the fact that they are at different locations isn't in the contract, it's disregarded.
Article 95:
Any state can decide not to be bound by Article 1(b)
Article 1 (3):
Nationality, civil, or commercial characters of the parties or contract won’t be considered in determining whether to apply the CISG
Asante Technologies, Inc. v. PMC-Sierra, Inc.:
PMC maintains its corporate headquarters and most of its operations in Canada. Although Asante had contacts with PMC’s Oregon office, none of the claimed breaches of contract occurred or arose out of those contacts. Instead, Asante alleges that the circuits it purchased did not conform to PMC’s technical specifications, which undisputedly emanated from Canada. Asante and PMC are contracting parties from different countries, and the CISG applies.
General Application to Contracts
When CISG Does NOT Apply
Article 4 (p. 440):
CISG does NOT apply to: (a) validity of the contract, its provisions, or usage; and (b) the effect of the contract on the goods.
Article 95:
Any state can decide not to be bound by Article 1(b)
Article 1 (3):
Nationality, civil, or commercial characters of the parties or contract won’t be considered in determining whether to apply the CISG
Article 6 (p. 441)
The parties may exclude using the CISG or vary the effect of any CISG provisions.
Article 1 (p. 440):
CISG applies to contracts for goods between parties whose places of business are in different states: (a) the states are contracting states; or (b) the rules of private international law led to using the law of a contracting state.
Article 4 (p. 440):
CISG only applies to forming contracts for the sale of goods and the buyer/seller obligations under the contract.