Comparative Contract Law Tutorial 1

Group 1: Mara Erath and Romy Vandenhove

Understanding of the Topic:

What is a contract?
Distinguish between moral agreements and contracts.
There must be an agreement + intention to be legally bound.
 
Article 1101 French Civil Code: A contract is an agreement of will between two or more
persons that is intended to create, modify or distinguish obligations.
 
Article 2:101 Principles od European Contract Law: A contract is concluded if the parties
intend to be legally bound and they reach a sufficient agreement without any further
requirement.
 
What are the rights and obligations under the contract?
(1)  Contract interpretation: How do you attribute meaning to the words used in the
contract?
(2)  Filling the gaps in contracts: default rules
(3)   Controlling the fairness of the contractual terms
(4)  Illegal and immoral contracts
(5)  Remedies in case of non-performance

Offer and acceptance model:

Article 113 French Civil Code: A contract is formed by the meeting of an offer and an
acceptance through which the parties express their will to be bound.
 
Article 6:217 Dutch Civil Code: A contract is formed through an offer and the acceptance
thereof.
 
German Law, PECL and English Law does not have such an article about offer and
acceptance, but it stands in other articles.
What is an offer?
Article 2:201 Principles of European Contract Law: A proposal amounts to an offer if it is
intended to result in a contract if the other party accepts it and it contains sufficiently defined
terms to form a contract
 
Article 114 French Civil Code: the offer made to a specific person or to anyone or
indeterminately comprises the essential elements of the envisaged contract and expresses the
will of its author to be bound in case of acceptance.
 
Dutch Law: offer is a legal act (rechtshandeling).
German Law: offer is a declaration of intention (willenserklarung).
 
Article 6:213 Dutch Civil Code: A contract in the sense of this title is a multilateral legal
act, whereby one or more parties undertake an obligation as against one or more others.
 
Article 3:33 Dutch Civil Code: A legal act requires a will directed towards a legal effect
which has been manifested by a declaration.
 
What is an acceptance:
Article 2:204 Principles of European Contract Law: Any form of statement or conduct by
the offeree is an acceptance if it indicates assent to the offer.
 
Article 1118 French Civil Code: The acceptance is the expression of the will of its author to
be bound under the terms of the offer.
 
Dutch Law: offer is a legal act (rechtshandeling).
Art.3:33 Dutch Civil Code
German Law: offer is a declaration of intention (willenserklarung).
 
Display of Goods and Advertisements:
Display of goods:
Dutch and French Law: the seller is making an offer to the potential buyers; the buyer may
decide if he/she accept the offer. Lemonade bottle case in French Law.
 
English and German Law: It is seen as an invitation to treat. The buyer is making an offer and
the seller may choose if he/she accepts the offer. Pharmaceutical Society v Boots in English
Law.
 
Advertisement:
Dutch and French Law: the seller is making an offer to the potential buyers; the buyer may
decide if he/she accept the offer. With the exception of specific goods. Hofland/ Hennis case
in the Netherlands. Maltzkorn/ Braquet case in French Law.
 
English and German Law: It is seen as an invitation to treat. The buyer is making an offer
and the seller may choose if he/she accepts the offer. Partridge v Crittenden case in English
Law.
 
The withdrawal and revocation of an offer:
Art.3:37 (3) Dutch Civil Code: a declaration that is directed at a particular person must have
reached that person, in order to have affect. Nevertheless, a declaration that has not reached
the person to whom is was directed in time or not at all, also has affect, if the untimely arrival
or lack of arrival is the consequence of his own conduct, of the conduct of persons for whom
he is liable, or of other circumstances concerning his person that justify that he bears the
disadvantage.
Art.3:37 (5) Dutch Civil Code: Withdrawal of a declaration that is directed to a particular
person must, in order to have affect, reach that person before or at the same time as the
declaration that is withdrawn.
Art.6:219 Dutch Civil Code: An offer may be revoked, unless it contains a time period for
acceptance or if its irrevocability follows from the offer in another manner.
Distinguish between withdrawal and revocation
 
In German Law: Para.130 German Civil Code and Para.145 German Civil Code.
 
In French Law: Art.1115 French Civil Code and Art.1116 French Civil Code.
 
Under English law it is always possible to revoke an offer until the offer has been accepted.
Offord v Davies (1862).
We also have to look at the doctrine of consideration.
 
The communication must reach the other person. But what does reach mean?
Art.1:303 PECL:
 
Sphere of influence: within the possibility of the offeree to come aware of the existence of
an offer or the withdrawal so it’s possible for him to take notice of the fact.
 
The Lapse of an offer:
(1)   Revocation: it can no longer be accepted.
(2)  Rejection: Offeree does not accept the offer (para.146 German Civil Code, art.6:221
Dutch Civil code, art.1118 French Civil Code and Hyde v Wrench (1840) case in
English Law)
(3)   Counter offer: offeree makes a counter offer. Original offer can no longer be
accepted. (art.6:225 Dutch Civil Code, art.1118 French Civil Code, para.150(2)
German Civil Code and Hyde v Wrench (1840) case in English Law)
(4)  Offer contains a time-limit: (para.148 German Civil Code, art.1117 French Civil
Code) Face to face it has to be accepted immediately otherwise the offer expires
(art.147(1) German Civil Code, art.6:221 Dutch Civil Code). In all other situations
then the offer lapses after a reasonable time period (para.147(2) German Civil Code,
art.1117 French Civil Code, art.6:221 Dutch Civil Code and also in English case law).
 
Acceptance:
Receipt theory: reaching the offeror (art.1121 French Civil Code, para.130 German Civil
Code, art.3:37(3) Dutch Civil Code). Reach is when the offer comes into the sphere of
influence of the offeror, delivered to his adress.
General rule of English Law: communication of the acceptance to the offeror.
Issues like failure of communication.
 
Instantaneous communication (face to face, or over phone): the acceptance takes place
when the offer comes to the offeror’s attention. They can identify easy when there is an issue.
Brinkibon Ltd v Stahag Stahl GmbH (1983) case.
 
Non-instantaneous communication (they are not directly speaking, e.g. mail): mailbox or
postal rule applies the acceptance takes place when the offeror posts the acceptance. In
English the dispatch theory: the acceptance takes effect upon the time that the offeree posts
the acceptance to the offeror. Laid down in the case of Adams v Lindsell (1818).
Risk lies by the offeror. Household Fire and Carriage Accident Insurance Co Ltd v Grant
(1879). Offeror cannot revoke the offer after it has been accepted by the offeree. Holwell
Securities Ltd v Hughes (1974): postal rule does not always apply, the offeror can require that
the acceptance must be directly communicated or sometimes the rule is not appropriated.
 
Silence and Inactivity:
Can it be treated as an acceptance?
Article 2:104(2) PECL: A silence or inactivity can not to be constituted as an acceptance.
Same conclusion: Art.1120 French Civil Code, Felthouse v Bindley (1862) English Law.
The need for communication of the acceptance.
Art.1120 French Civil Code: silence does not amount to acceptance unless otherwise
follows from the law custom, business relations or special circumstances.
Para.151 German Civil Code: a contract is formed by the acceptance of an offer without the
offeror needing to be notified of the acceptance is such a declaration is not to be expected
according to common practice.  
Its not an absolute rule, because in some circumstances silence/ inactivity can be seen as an
acceptance.

 
 
Problem Task: Apartment and Bike for Sale
John wants to sell his apartment and his bike. For this reason, he places the following
advertisement in a local newspaper:
‘Apartment for sale, 100m2, located in a modern city centre complex, Donellus Avenue 2, L-
shape living room, new kitchen, separate study, 2 bedrooms, luxurious bathroom, garage,
balcony, € 195,000. Also for sale, 10-speed men’s bicycle, top condition, € 150. Tel. 043-
5551974.’
Alex has been looking for an apartment for quite some time. He becomes very enthusiastic
when he notices John’s advertisement in the newspaper. He phones John and tells him that he
agrees to buy the apartment for € 195.000. John also receives a phone call from Bill who tells
him that he agrees to buy the bicycle.
 
 Issue: The question is whether there exists a contract merely by his newspaper advertisement
between John and Alex and John and Bill.

Dutch Law

Rule: Art. 6:217 (1) Dutch Civil Code A contract is formed through an offer and an
acceptance
Application: Since John made an advertisement in the newspaper he made an offer and Alex
and Bill accepted his offer.

Conclusion: All In all under Dutch Law a valid contract is existing, since the sufficient
requirements stated in the article are fulfilled.

German Law

Rule: §657 (1) BGB As long as the parties have not yet agreed on all points of a contract
about which an agreement is to be reached according to the declaration of even only one
party, the contract is, in case of doubt, not concluded(…).

Application: Since John made only an advertisement it can only be seen as an invitation to
make an offer, but John still has not agreed to accept the offers.

Conclusion: Lastly, there is no valid contract, since John has not agreed on the offers of Alex
and Bill.

French Law

Rule: Art. 1114 Code Civil The offer, made to a specific person or to anyone indeterminately,
compromises the essential elements of the envisaged contract and expresses the will of its
author to be bound in case of acceptance. Otherwise, there is only an invitation to enter into
negotiations.

Art. 1121 Code Civil The contract is concluded as soon as the acceptance reaches the offeror.
It is deemed to be located at the place where the acceptance is received.

Application: The first article states that the advertisement can be seen as binding offer since it
is directed to the public and John has the intention to sell both of his objects. By applicating
the second article, Alex and Bills acceptance becomes binding for John, since those were
acceptances directed to him.

Conclusion: It can be concluded that under French law there is a valid contract both between
John and Alex and John and Bill.

English Law

 
Rule: Case: Partridge v Crittenden (1968)

Application: The precedent states that an advertisement can only be seen as an invitation to
make an offer, but the offeror still gas the power to decide which offer he accepts.

Conclusion: There is no valid contract, because Bill and Alex only made an offer to buy the
goods, but John did not replied to them, that he accepts their offers, thus their offers are not
binding on John.

Principles of European Contract Law

Rule: 2:201 (3) PECL A proposal to supply goods or services at stated prices made by a
professional supplier in a public advertisement or a catalogue, or by a display of goods, is
presumed to be an offer to sell or supply at that price until the stock of goods, or the
supplier's capacity to supply the service, is exhausted.

Application: John is not a public supplier.

Conclusion: There is no valid contract.

Problem Task: Just in Time?
On April 25th, Julia offers to sell her copy of Introduction to Law to Angela for €15. She tells
Angela she must notify her of her acceptance before May 1st. On April 29th, Julia receives a
text message from Jack who is desperately in need of the textbook and offers to buy it for
€20. The next day, Julia calls Angela on her mobile phone but she is unable to get a hold of
her and therefore leaves a message on the voicemail saying that she has changed her mind
and that she no longer intends to sell the book to her. Angela doesn’t listen to the voicemail
before she sends her acceptance of Julia’s offer by email on April 30th, just before midnight.
The message arrives in Julia's inbox just after midnight, on May 1st.
I: Is Angela the new owner of the book Introduction to Law?

Dutch Law:
R:
Article 6:219 (1) Dutch Civil Code:
An offer may be revoked, unless it contains a time period for acceptance or if its
irrevocability follows from the offer of another manner.

Article 3:37 (3) Dutch Civil Code:

A declaration that is directed at a particular person must have reached that person, in order to
have effect. Nevertheless, a declaration that has not reached the person to whom it was
directed in time or not at all, also has effect, if the untimely arrival or lack of arrival is the
consequence of his own conduct, of the conduct of persons for whom he is liable, or of other
circumstances concerning his person that justify that e bearsthe disadvantage. 

A: The offer contains a time period for acceptance, which means it can not be revoked.
C: Julia had to sell the book to Angela, because she accepted the offer before the time period
expired. Julia can not sell the book to Jack, because the offer has a time period to accept
which means that she can not revoke the offer.

French Law:
R: Article 1116 French Civil Code:
It cannot be withdrawn before the expiry of a period of time set by its author or, failing that,
before the expiry of a reasonable period.
The withdrawal of an offer in breach of this prohibition prevents the conclusion of the
contract.
It leads to extra-contractual liability of the offeror under the conditions of general law without
obliging him to compensate for the loss of the benefits expected from the contract.

A: Julia can not revoke her offer, because she set an expiry date. If she nevertheless revokes
the offer in this time period she breaches the prohibition which means that she has to
compensate for the damage.

C: If Julia wants to sell the book to Jack she breaches the prohibition. Which means that Julia
has to compensate for the damage Angela has as result of the revocation of the offer,
probably the €20 euros for the book. So the best option would be selling the book to Angela,
but she can also sell it to Jack.

German Law:
R: Paragraph 145 German Civil Code:
A person who offers to another to conclude a contract is bound by the offer, unless has
excluded this binding effect.

Paragraph 149 German Civil Code:

If a declaration of acceptance received late by the offeror was sent in such a way that it would
have reached him in time if it had been forwarded in the usual way, and if the offeror ought to
have recognised this, he must notify the acceptor of the delay after receipt of the declaration
without undue delay, unless this has already been done. If he delays the sending of the
notification, the acceptance is deemed not to be late.

A: Julia did exclude a binding effect by setting a time period to accept the offer. Julia got the
acceptance of the offer after the set period of time. 

C: Angela had to make sure Julia got the acceptance before the time period expired which
would mean that Julia can sell the book to Jack. 

English Law:
R: We have to look at the case Offord v Davies (1862):
Someone is not bound if he/she offers something until the offer has been accepted.

A: Julia is not bound into forming a contract with Angela, because she made an offer but
there has not been an acceptance yet. 

C: Julia can sell the book to Jack. Julia is not bound with Angela, because Angela did not
accept the offer yet. 
Principles of European Contract Law (PECL):
R: Article 2:202 (1) PECL:
An offer may be revoked if the revocation reaches the offeree before it has dispatched its
acceptance or, in cases of acceptance by conduct, before the contract has been concluded
under Article 2:205 (2) or (3)

Article 2:205 (2) PECL:

In case of acceptance by conduct, the contract is concluded when notice of the conduct
reaches the offeror.

A: Angela accepted the offer, but Julia sent her a voicemail with the withdrawal before the
acceptance. 

C: Julia revoked the offer, before it was accepted. Julia can sell the book to Jack.