COMPARATIVE PRIVATE LAW FORMATION

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COMPARATIVE PRIVATE LAWFORMATION

• University of Oslo
• Prof. Giuditta Cordero Moss

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Case I Written Amendment

• Installation contract between constructor and
  sub-contractor
• Contractual price turns out to be insufficient
  (no margin of profit for sub-contractor)
• Sub-contractor proposes increase of price and
  constructor agrees
• Written amendment agreement
• Constructor finds another sub-contractor and
  revokes amendment
• Was the amendment binding?

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Case I- Was the amendment binding?

• English law
• Amendment is not enforceable

• Others
• Amendment is binding and enforceable

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Case II- Irrevocable offer

• Tender for construction
• Contractor makes a bid
• Bid based on local sub-contractors prices
• Contractor is awarded the contract

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The subcontractors offer

• This offer is binding on the offeror and cannot
  be revoked before 30 days have elapsed from the
  date hereof
• Subcontractor revokes the offer before the term
  (but after the the contract was awarded)

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Case II- Was the offer binding?

• English law
• The offer was not enforceable

• Others
• The offer was binding and enforceable

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Case III-Modified Acceptance

• Seller and Buyer agree on the phone on quality,
  volume, price, delivery place, and agree to send
  written confirmation
• Seller sends confirmation specifying that
  transport to be made on ship at sellers
  discretion
• Buyer sends acceptance, but requests ship of
  certain nationality
• Seller does not reply
• At moment of shipment, seller says that the
  contract was not concluded

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Case III Was the contract concluded?

• Norwegian, Italian, English law
• No

• German law, CISG, UNIDROIT, PECL
• Yes

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Case IV Battle of the Forms

• Seller and Buyer agree on the phone on quality,
  volume and price
• Seller sends offer on pre-printed general sale
  conditions. Conditions contain limitation of
  liability for delays
• Buyer sends acceptance on pre-printed general
  purchase conditions. Conditions contain no
  limitation of liability except for force majeure
• At time of delivery shortage of goods prevents
  timely delivery

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Case IV- Was contract binding, is liability
limited?

• Norwegian, Italian, English law, CISG
• No contract
• If performance was started contract is binding,
  no limitation of liability (last shot)

• German law, UNIDROIT, PECL
• Contract is binding
• Neither of the liability clauses is applicable
  (knock out)

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Case V- Break-off of negotiations

• Negotiations between car producer (Carp) and
  component producer (Comp) for joint production
• Plant identified, neg. teams discuss technical
  design, allocation of personel, funding,
  profit-split
• Result of negotiations to be recorded in MoU by
  each team MoUs to be transformed into contract
• From the start Carp negotiates in parallel with
  other comp (Comp 2). Towards the end of the
  negotiations Carp breaks off with Comp and
  enteres into contract with Comp 2

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Case V- Is Carp responsible for break-off?

• Norwegian, German, Italian law, UNIDROIT, PECL
• Comp is entitled to reimbursement of damages

• English law, CISG
• No liability

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Common Features

• Contract is concluded by exchange of conforming
  offer and acceptance. Acceptance can be tacit.

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Norwegian Law

• Act on Formation of Contracts 1-9
• Exchange
• No form requirements
• Offer is binding
• Acceptance must conform otherwise
  counter-offer
• Mirror image rule (unless awareness of
  misunderstanding)
• Last shot rule

• Progressive creation of consent (formal contract
  not necessary)
• Duty of loyalty in negotiations

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German Law

• 145 ff BGB
• Exchange
• No form requirements
• Offer is binding
• Acceptance must conform, otherwise counter-offer
• Mirror image rule but, if parties have interest,
  only modified part is deemed counter-offer 155)
• Battle of the forms if contract is deemed
  concluded, knock-out (154)

• No contract until all points agreed upon (154.1)
• Formal contract necessary if parties referred to
  it (154.2)
• Culpa in contrahendo (311.2, 241.2

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Italian Law

• Art. 1325 cc
• Agreement, causa (art. 1343 legal), object, form
  (only for certain contracts)
• Exchange
• Offer revokable unless firm (1329)
• Acceptance must conform, otherwise counter-offer
• Mirror image rule
• Good faith in negotiations (1337)

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English Law

• Exchange
• Consideration
• Offer is revocable even if firm
• Acceptance must conform, otherwise counter-offer
• Mirror image
• No duty of loyalty or good faith

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CISG

• Exchange (art. 23)
• No form, no causa, no consideration
• Amendment is valid by mer agreement (29.1)
• Offer revocable unless firm (16)
• Conforming acceptance, otherwise counter-offer
  (19.1)
• Minor modifications acceptable (19.2), but most
  modifications are material (19.3)
• No specific rule on general conditions mirror
  image last shot (last shot directly only if
  minor modifications)
• No pre-contractual liability

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UNIDROIT Principles

• Exchange (3.2)
• No form, no causa, no consideration
• Offer revocable unless firm (2.4)
• Mirror image last shot
• Directly last shot if immaterial modifications
  (2.11)
• Battle of the forms knock-out (2.22)
• Negotiations must be in good faith( 2.15)

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PECL

• Mere agreement (2101(1))
• Revocable offer, unless firm (2202)
• Last shot if immaterial modifications (2208)
• Battle of the forms knock-out (2209)
• Negotiations in good faith (2301)

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Main differences

• Consideration
• Mirror image vs. Knock-out
• Pre-contractual liability