Dr hab. Fryderyk Zoll, Professor at the Jagiellonian University

1. Dr hab. Fryderyk Zoll, Professoratthe Jagiellonian University Formation of Contract

2. Formation of Contract • The concept of the offer Art. II. 4:102 DCFR How intention is determined The intention of a party to enter into a binding relationship or bring about some other legal effect is to be determined from the party’s statements or conduct as they were reasonably understood by the other party

3. Formation of Contract • Art. II. – 4: 201 DCFR: Offer • A proposalamounts to an offerif: • itisintended to resultin a contractiftheother party acceptsit; and • itcontainssufficientlydefiniteterms to form a contract (2) An offermay be made to one ormorespecificpersonsor to the public (3) A proposal to supplygoodsor services atstatedpricesmade by a business in a public adevertismementor a catalogue, or by a display of goods, istreated, unlessthecircumstancesindicateotherwise, as an offer to sellorsupplyatthatpriceuntilthestock of goods, orthebusiness’scapacity to supplythe services, isexhausted

4. Formation of Contract • Art. 14 CISG • (1) A proposal for concluding a contractaddressed to one ormorespecificpersonsconstitutes an offerifitissufficientlydefinite and indicatestheintention of theofferor to be boundincase of acceptance. A proposalissufficientlydefiniteifitindicatesthegoods and expresslyorimplicityfixesormakesprovision for determiningthequantity and theprice. • (2) A proposalotherthan one addressed to one ormorespecificpersonsis to be consideredmerely as an invitation to makesofferes, unlessthecontraryindicated by the person makingtheproposal

5. Formation of Contract • Court of Appeal • Clifton v. Palumbo [1944] 2 A11 ER 497 (Beal/Hartkamp/Koetz/Tallon: Cases, Materials and Text on Contract Law, p. 179) Clifton wrote to Palumbo without legal assistance: „I am prepared to offer you my estate for £ 600.000. I also agree that a reasonable and sufficient time shall be granted to you for the examination and consideration of all the data and details necessary for the preparation of the Schedule of Completion”

6. Formation of Contract • Lord Greene: „(…) Therefore words like „agree”, „offer”, „accept”, when used in relation to price are not to be read necessarily as intention to make, then and there, a contract or an offer as the case may be. Whether they do or do not must depend entirely on the construction of particular document”

7. Formation of Contract • Court of Appeal Bigg v. Boyd-Gibbins Ltd. [1971] 2 A11 ER 183 Beale and Others, Cases, p. 180 TheBiggswrote to Gibbins „As youareawarethat I paid £ 25.000 for this property, youroffer of £ 20.000 wouldappear to be atleast a littleoptimistic. For a quick sale I wouldaccept £ 26.000”. In replyGibbinswrote „I acceptyouroffer”. He askedthefamilyBiggs to contact his solicitors. MrBiggsresponded: „I amputtingthematterinthehands of my solicitors. My wife and I arebothpleasedthatyouarepurchasingthe property”

8. Formation of Contract • Judgment: Russel LJ: „…the defendants were correct in treating the first letter of 22 December 1969, as an offer to sell the property at £ 26.000 when they wrote „I accept your offer”. Further then that, it seems to me that the last letter of 13 January is a recognition, an affirmation indeed, that the parties have come to agreement on the sale of the property”.

9. Formation of Contract • Conclusions for the English Law (Beale and Others – Cases, p. 180 – 181) • Question whether a statement constitutes an offer depends on the objectively ascertained intention of the party making the statement. • The statement of a price by the seller is not decisive in determining whether he made an offer. • The use of the word „offer” is not decisive for determining the nature of the statement

10. Formation of Contract • TheFrench Law Cass. Com. 6.03. 1990, Bull.civ. IV.74. JCP 1990.II.21583 – Beale and Others, Cases, p. 181 Facts(according to Beale and Others, Cases, p. 181): MrBordeorderedcertainequipmentfromMessersHuginSweda for thepurposes of his business; that company hadstated, inthe general conditions of sale featuringinits order forms, thatitsofferdid not becomedefinitive , and did not constitute a bindingcommitement, untiltheywereapproved by it, and, moreoverthat an order would not be regarded as definiteuntilithadbeenaccepted by the company. Before his order was accepted by HuginSweda, MrBordechanged his mind and withdrewit.

11. Formation of Contract • Judgment(Beale and Others, Cases, p. 181) „Under Articles 1134 and 1583 of theCodeCivil; whereasbetweentraders, a proposal to enter into a contractconstitutes an offeronlyifitstates an intention on the part of the person makingit to be bound by itintheevent of itsacceptance; WhereasindismissingMrBorde’sclaim for repayment of the sum paid by him on account, thecourd’appelheldthatthe order form constituted a firm purchase on thetermsproposed by theHuginSweda and theclauseappearinginthat form constituted a conditionhavingsuspensoryeffectwhich was intendedsolely for the benefit of thevendor and which do not entitlethepurchaser to withdrawfrom a sale whichhadbeendefintelyconcluded by agreementbetweentheparties as to thesubject –matter and theprice; Whereasin so ruling , despitethefactthat, by complyingwiththeproposalcontainedinthe order form MrBordehadmerelymade an offer to purchasewhichheremainedatliberty to withdrawuntilsuch time as the sale becamedefinitive by acceptance on the part of thevendor, thecourd’appelinfringedthelegislationreferredabove. Homework: readtheCase on p. 183, TheAeroplane Charter