Case Analysis: On December 1, Seller sent Buyer an offer to sell 5,000 widgets t

Question

Case Analysis: On December 1, Seller sent Buyer an offer to sell 5,000 widgets to Buyer for $25 apiece. The offer stated: "The offer will remain open until December 31" On December 10, Buyer answered: "The price is too high; I don't accept your offer." Then, on December 15, Buyer changed his mind and sent a telegram stating:" I accept your December 1 offer after all." Seller replied: "Your acceptance is too late, since you already rejected the offer" In turn, Buyer answered, "The acceptance is good, you promised to keep your offer open until December 31." Is there a contract under the CISG? Please give your analysis based on the rules specified in the CISG (40%) 3.

Explanation / Answer

United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention,1980) or commonly abbreviated as CISG is an uniformed and consolidated convention or contract system on the commercial exchange or sale of goods in the international market.It is primarily intended to provide a fair,uniform,systamatic and an organized contract system between the buyer and seller involved in international sale of goods to facilitate the entire tsale/exchange process in a transparent,fair and systematic manner.CISG contract system would apply whenever the contract for the sale of any good between the buyer and seller are carried out in the place of business that is located in the contracting states.Furthermore,CISG contract system can also be applied under mutual consent of the contractual parties irrespective of whether the place of business or sale is located in the contracting states.Thus it can be valid even when place of business of the transacting parties i.e. the buyer and the seller are located in different contracting states and it is also subject to the choice or wish of the concerned parties.

Additionally,CISG contracts can only be implemented when the international sale of the concerned good occurs between two businesses(B2B sale) and excludes sales to private consumers and services.The contract system under CISG also enforces certain obligations for both buyers and sellers.The seller has a primary obligation to fulfill the final delivery of the good in full conformity with the contractual rules and regulations pertaining to quantity and quality as promised.The buyer also has an obligation to pay the full and final price for the good as decided under the contract and accepting the delivery by the seller as demanded.In this context,the CISG contract also includes the alternative or the remmedial conducts to be under taken under the breach of these contractual obligations both on the part of the buyers and sellers.Now,it must be noted that CISG contracts are only applicable or limited to international B2B commercial exchange of goods and does not include any strictly domestic sale or any private sale contract between domestic parties.

In this instance,notice that firstly,it is not clear whether the sale of 500 widgets mentioned is an international or domestic sale and further if the sale occurs between private businsseses or business and consumer or business and any service agency.Hence,the particular type of the sale is not confirmed in this case.Secondly,as stated the price offered by the seller is $25 per unit the buyer does not really accept it implying that there is no fixed price contract between the buyer and the seller in this case although it can be reasonably assumed that the buyer demands a total of 500 widgets.Furthermore and importantly,the buyer already changed his mind regarding the purchase once due to disagreement on the commodity price.However,observe that the seller at least proclaims to keep the offer open until December 31st which seems to be violated according to the buyer indicated by the seller's refusal to sell the good after the reversal of the buyer's decision.Thirdly,it is also not known whether the place of the business of both seller and the buyer are located in contracting states or not.

Therefore, based on several uncertainties such as whether the concerned sale in this case is international or domestic,type of the business or sale (B2B/B2C or service agency etc),lack of definite and mutual price determination for the goods between buyer and seller,failure of the seller to abide by the initial timeline of the offer,multiple changes in the pruchasing decision of the buyer and so forth it cannot be undoubtedly stated that the particular sale in this case comes under CISG contract.

Citation

http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG.html

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