All 2 entries tagged Rule

Explication : the revocability of the offer

Follow-up to The postal rule – Acceptance sent through the post from Aurelie's blog

This difference can be explained by the difference concerning the revocability of the offer in the 3 systems. Whereas German law considers the offer as irrevocable (1), French and English law accept this possibility of revocability in the name of freedom of contract, but with some limitations or exceptions.

The revocability of the offer is possible in England only when no consideration was provided and in case of bilateral contracts (2). In France, the general possibility of revocation (3) is limited to a “reasonable time” by jurisprudence (4). Moreover can the offeror bound himself by proposing a period of validity of the offer (5), which is not possible under English law (6). But this liability is limited to damages. Indeed, French law refused to govern pre-contractual period by contract law, and let apply tort law (droit délictuel) in such situations.

As said before, the choice between the two principal theories of emission and reception allows to answer in three different situations between the time the letter of acceptance was sent and the time it arrives :

- Did the offeree miss the deadline proposed by the offeror to accept the offer?

- Can the offer be revocked by the offeror?

- Is the offeree which send an acceptance and revocked it just after by mail bound when both arrived at the same time? NB: an acceptance is always NOT revocable when the contract was concluded, but is here the contract concluded?

The answers to the first and third question depend purely on the applicable theory. The answer to the second one depends on the applicable theory AND on the applicable law. Indeed, German law which doesn’t allow to revoke the offer has no interest to choose the theory of emission, which will just add problems concerning proofs for the 1st and 3rd situations. On the other hand, English and French law need this theory to protect the offeree from offeror’s revocation during this period.

There’s still one question: why does French law in this Avant projet Catala opt for the reception theory? This project conserved the possibility of revocability and its limitations, but allows the offeree to enforce the contract when it’s not respected (7). As explained by the authors, This “progress” in favour of the offeree is compensated by the theory of reception, which protects more the offeror, and reinforces its possibility to revoke the contract (8)…

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(1) 145 BGB<http://www.gesetze-im-internet.de/bgb/index.html#BJNR001950896BJNE031602377>

(2) Dickinson v. Dodds, 2 Ch. D. 463 (1876). For unilateral contracts, cf. Daulia Ltd v Four Millbank Nominees Ltd [1977] EWCA Civ 5

(3) Civ., 3 févr. 1919, DP 1923. 1, 126. But there are some situation where French law forbid to revoke the offer during a précised time such as consumer credit law (15 days), electronical contracts (while it is accessible on the website)…

(4) Civ. 3e, 25 mai 2005, no 03-19.411 , Bull. civ. III, no 117 ; CCC 2005. no 166, obs. Leveneur.

(5) Civ. 3e, 7 mai 2008, no 07-11.690, Bull. civ. III, no 79 ; D. 2008. AJ 1480, obs. G. Forest ; Pan. 2969, obs. Amrani Mekki ; RTD civ. 2008. 474, obs. Fages ; CCC 2008, no 194, obs. Leveneur. - Déjà Civ. 1re, 17 déc. 1958, Bull. civ. I, no 579 ; RTD civ. 1959. 336, obs. J. Carbonnier.

(6)

(7) Avant projet Catala, art 1105-4

(8) Avant projet Catala, section “formation of contracts”, art 1104-1107, commentary by Delebecque P. & Mazeau, D., §3 “certainty” < http://www.justice.gouv.fr/art_pix/rapportcatatla0905-anglais.pdf>

: 09 Nov 2011 13:09 |  Tags: Acceptance Postal Rule |  Comments (0) |  Close comments |  Report a problem

The postal rule – Acceptance sent through the post

When does an acceptance sent through the post become effective? The answer to this question determines where and when the contract is formed, and allows to answer to three important questions : Did the offeree miss the deadline proposed by the offeror to accept the offer? Is a revocation made by the offeror between the time the letter of acceptance was sent and the time it arrives possible? Is the offeree which send an acceptation and revocked it just after by mail bind when both arrived at the same time?

There are 4 possibilities of answers :

• when the offeree decide to accept (externalisation theory Äußerungstheorie)

• when the offeree posts its acceptance (expedition or emission theory, dispatch theory, “postal rule”, übermittlungstheorie).
  

• when he recieves the acceptance (reception theory, Empfangstheorie) - with presumption he will knew it.

• when the offeror knows the acceptation (information theory, Vernehmungstheorie)

The most extrem possibilities (the 1st and the last) are innapplicable for proof reasons.

English law opted for the emission's theory under its “postal rule” (1), and then limits its application. For instance it's only applicable when it was reasonable to use post as a method of acceptance (2), the letter of acceptance was properly posted (3) and it didn't produced a “manifest inconvenience and absurdity” (4)

French civil code doesn't generally regulate this matter (5). French Cours de cassation decided for a long time that it was a question of facts, and should be decide “following the circumstances of the case” by the judges (6). Sometimes it decided to apply the expedition theory, sometimes the reception theory. But it definitely decided to support the emission theory in 1981 if the seller didn't stipulate anything (7). However it could change in a few years, a current law project recommending to delete it and to replace it by the reception theory (8). This theory has the inconvenience to protect more the seller than the buyer, seller who already often imposes his terms and conditions, for instance in consumer relationship.

Can we accept that a second acceptance from an other place after ours, which arrived before ours because of a strike in our post center is valid and that we consequently loose the contract? Is the contract law a game in which the more lucky win?

Anyway, today the reception theory (Empfangstheorie) is not out-of-the-way : German law opted for it in §130 BGB (9), just like the CISG (10) and Unidroit principle chose the reception theory (11).

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1. Adams v Lindsell (1818) 1 B & Ald 681, confirmed in Dunlop v Higgins (1848) 1 HLC 381.

2. Henthorn v Fraser [1892] 2 Ch 27. For instance, it doesn't apply if the offeree knows that there is going to be some delay to his acceptance due to an event such as a postal strike.

3. Getreide-Import GmbH v Contimar SA Compania Industrial, Comercial y Maritima [1953] 1 WLR 207 (misaddressed acceptance).

4. Holwell securities Ltd v Hugues [1974] 1 WLR 155 (CA), per Lawton L.J

5. But art 932 code civil choose the “reception” system concerning donation contracts and art 1985 choose emission system concerning power of attorney (mandat).

6. Cass. req. 6 août 1867

7. Cass. com. 7 janv. 1981, Bull. civ. IV, no 14, RTD civ. 1981. 849, obs. F. Chabas

8. Avant-Projet Catala, Art 1107.

9. Art 130 BGB : Effectiveness of a declaration of intent to absent parties; (1)A declaration of intent that is to be made to another becomes effective, if made in his absence, at the point of time when this declaration reaches him. It does not become effective if a revocation reaches the other previously or at the same time.

   See statement in http://dejure.org/gesetze/BGB/130.html
   

10. United Nations Convention on Contracts for the International Sale of Goods, art 18 : “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance”.

11. Unidroit principles of international commercial contracts 2010 – art 2.1.6-2° : “An acceptance of an offer becomes effective when the indication of assent reaches the offeror”.

Sources :

Patrick CHAUVEL, localisation du consentement dans le temps et dans l'espace, répertoire de droit civil DALLOZ (online), CONSENTEMENT, section 5, notes 238-255.

E. Mckendrick, Contract law, Text, cases and materials, 9rd ed. Oxford press.

Einsele, MüKo-BGB, §130.

: 01 Nov 2011 22:25 |  Tags: Acceptance Postal Rule |  Comments (0) |  Close comments |  Report a problem