U.N. Sales Convention Differences with the UCC (continued)

November 16, 2010, 9:37 AM

Here are some additional conflicts in the legal rules established under the UCC and the Sales Convention:

Extrinsic Evidence. Although the Sales Convention requires an offer and acceptance to be "mirror images" of each other see previous post it does permit greater recourse to "extrinsic evidence" in order to prove the existence of such an agreement and its contents. Unless by written agreement the parties have explicitly excluded extrinsic evidence in defining their respective rights and obligations, a tribunal may consider oral statements, explanatory emails, prior practices between parties, common word usages in the trade and other items of extrinsic evidence in defining the parties' contractual rights and obligations.

Revocation of an Offer. Under the UCC, either a buyer or seller is normally free to revoke an offer at any time prior to acceptance by the opposite party. Under the Sales Convention, however, an offer is considered irrevocable if the recipient of the offer has reasonably taken action in reliance on the offer prior to receiving notice that the offer has been revoked. For example, if a manufacturer in a foreign contracting state has received a bid from a U.S. exporter for a key component of the finished product, and then, in reasonable reliance on such bid, committed to supply the end-user at a stipulated price, the U.S. exporter may be under a legal duty to fulfill the offer even if "revoked" prior to receiving formal acceptance from the foreign manufacturer. --Charles V. McPhillips