Document-Id: 920000, Please cite as: "https://www.trans-lex.org/920000"
Title
IV.2.1 - Contractual consent
Content
No. IV.2.1 - Contractual consent
(a) A contract is concluded when one party has communicated to another an offer, and that other party has accepted it, or when the parties have united in a concurrent expression of intention, designed to create a contractual obligation or contractual obligations.
(b) A valid contractual consent requires that the parties intend to be legally bound and that they have sufficiently identified the terms of the contract with respect to the parties and the subject matter.
Commentary
1 Subsection (a) mentions two scenarios in which a contract can be concluded. In the first scenario, one party issues an offer and the other party accepts that offer. In this scenario, the contract is concluded once the offer has been accepted, unless that acceptance contains additions, limitations or other modifications which, when compared with the offer, constitute a material alteration of the offer. In that later case, the reply which purports to be an acceptance constitutes a rejection of the offer and a counter-offer. That counter-offer must be accepted by the party who issued the initial offer for the contract to be concluded.
2 Subsection (b) lists the two requirements which every declaration of will must meet in order to be qualified as a binding offer or acceptance, a subjective and an objective one.
3 The subjective one relates to the fact that for offer and acceptance to be legally valid and binding, they must be issued by the parties with an intention to be legally bound. Usually, such intention is not declared expressly and must be inferred from the circumstances of the case. If a statement is made by one party without such intention, that statement must be qualified as a non-binding declaration of interest or an invitation to make an offer ("invitatio ad offerendum").
4 The objective requirement relates to the fact that offer and acceptance must identify the essential elements ("essentialia negotii") of the contract which the parties intend to conclude, i.e. the identity of the parties, and, in case of a sales contract, the nature of the goods to be delivered by the seller and the price to be paid by the buyer. These elements can be determined by application of the general principles of interpretation. Essentially, the offer must be so specific that the offeree can conclude the contract by simply saying "yes". Put differently, the acceptance must be the mirror image of the offer. However, a contract can be concluded with the price or other essential elements being fixed at a subsequent stage if the parties indicate that they want to be bound even though that essential element has not yet been fixed.
5 There is a connection between both requirements. The more detailed and specific an offer is, the more likely it is that the party wants to be bound by it.
2 Subsection (b) lists the two requirements which every declaration of will must meet in order to be qualified as a binding offer or acceptance, a subjective and an objective one.
3 The subjective one relates to the fact that for offer and acceptance to be legally valid and binding, they must be issued by the parties with an intention to be legally bound. Usually, such intention is not declared expressly and must be inferred from the circumstances of the case. If a statement is made by one party without such intention, that statement must be qualified as a non-binding declaration of interest or an invitation to make an offer ("invitatio ad offerendum").
4 The objective requirement relates to the fact that offer and acceptance must identify the essential elements ("essentialia negotii") of the contract which the parties intend to conclude, i.e. the identity of the parties, and, in case of a sales contract, the nature of the goods to be delivered by the seller and the price to be paid by the buyer. These elements can be determined by application of the general principles of interpretation. Essentially, the offer must be so specific that the offeree can conclude the contract by simply saying "yes". Put differently, the acceptance must be the mirror image of the offer. However, a contract can be concluded with the price or other essential elements being fixed at a subsequent stage if the parties indicate that they want to be bound even though that essential element has not yet been fixed.
5 There is a connection between both requirements. The more detailed and specific an offer is, the more likely it is that the party wants to be bound by it.
References
Model Laws
A Contract Code: Drawn up on Behalf of the English Law CommissionPrinciples of Latin American Contract Law (PLACL)The Draft Civil Code for Israel in: Siehr, Kurt/Zimmermann, Reinhard (ed.) The Draft Civil Code for Israel in comparative perspective, 2008Uniform Law on the Formation of Contracts for the International Sale of GoodsArbitral Awards
African Holding Company of America, Inc. Et Société Africaine de Construction au Congo S.A.R.L. v. La République Démocratique du Congo, CIRDI No. ARB/05/21ICC Award No. 3327, Clunet 1982, at 971 et seq.Iran-US Claims Tribunal, Award in Case No. 34, YCA 1987, 257Society of Maritime Arbitrators, Inc., New York, Award No. 1757 "The Swee Lean", YCA 1984 at 150 et seq.Doctrine
Anson, William R./Brierly, J. L., Principles of The English Law of Contract and of Agency in its Relation to ContractDerains, Yves, note to ICC Award No. 3327, Clunet 1982, at 975 et seq.Domingo, Ortega, Rodriguez-Antolin, Zambrana, Principios de Derecho Global, Navarra, 2006Hutchison, Dale (Ed.) / Pretorius, Chris (Ed.), The Law of Contract in South Africa, Oxford University Press Southern Africa, 2018Jenks, Edward et al., A Digest of English Civil Law, London, Sydney, Calcutta, Winnipeg, Wellington 1921.MacQueen, Hector L./Thomson, Joe, Contract Law in Scotland, Fourth Edition 2016Ripert, Georges, Les Règles du Droit Civil Applicables aux Rapports Internationaux (Contribution à l'Etude des Principes Généraux du Droit Visés au Statut de la Cour Permanente de Justice Internationale), 44 Rec.Cours 1933-II, at 569 et seq.Schlesinger/ Rudolf B. (ed.), Formation of Contracts, A Study of the Common Core of Legal Systems, Vol. I, New York, London 1968Schmidt, Jessica, Der Vertragsschluss (2013)National Legislation
Civil Code of the People's Republic of China (2020)Civil Code Québec 1991Contract Law of the People's Republic of ChinaCzechoslovak International Trade CodeDanish Contracts ActEthiopian Civil CodeFinnish Contracts ActFrench Civil Code 2016GIW DDRGIW GDRIndonesian Civil Code (excerpts)Louisiana Civil Code 2015Philippines Republic Act 386 (Civil Code)Russian Civil CodeSaudi Arabia Civil Transactions Law - Royal Decree No. M/191, June 18, 2023, official translationThe Indian Contract Act, 1872 (Act no. 9 of 1872)International Legislation
Fontaine, Marcel, OHADA Uniform Act On Contract Law Preliminary DraftOrganization for the Harmonization of Business Law in Africa (OHADA), Uniform act relating to general commercial lawUnited Nations Convention on Contracts for the International Sale of Goods (CISG)Principles / Restatements
OHADAC principles on international commercial contractsPrinciples of European Contract Law - PECLPrinciples of the Existing EC Contract Law (Acquis Principles)UNIDROIT Principles of International Commercial Contracts 2016