European Contract Protocols - Chapter 2

CHAPTER 2 - FORMATION

Section 1 - General Provisions

Article 2.101 (ex art. 5.101) - Conditions for the Conclusion of a Contract
(1) A contract is concluded if:
(a) the parties intend to be legally bound, and
(b) they reach a sufficient agreement
without any further requirement.
(2) A contract need not be concluded or evidenced in writing nor is it subject to any other requirement as to form. The contract may be proved by any means, including witnesses.

Article 2.102 (ex art. 5.102) - Intention

The intention of a party to be legally bound by contract is to be determined from the party's statements or conduct as they were reasonably understood by the other party.

Article 2.103 (ex art. 5.103) - Sufficient Agreement

(1) There is sufficient agreement if the terms:
(a) have been sufficiently defined by the parties so that the contract can be enforced, or
(b) can be determined under these Principles.
(2) However, if one of the parties refuses to conclude a contract unless the parties have agreed on some specific matter, there is no contract unless agreement on that matter has been reached.

Article 2.104 (ex art. 5.103 A) - Terms not individually negotiated

(1) Contract terms which have not been individually negotiated may be invoked against a party who did not know of them only if the party invoking them took reasonable steps to bring them to the other party's attention before or when the contract was concluded.
(2) Terms are not brought appropriately to a party's attention by a mere reference to them in a contract document, even if that party signs the document.

Article 2.105 (ex art. 5.106 A) - Merger Clause

(1) If a written contract contains an individually negotiated clause stating that the writing embodies all the terms of the contract (a merger clause), any prior statements, undertakings or agreements which are not embodied in the writing do not form part of the contract.
(2) If the merger clause is not individually negotiated it will only establish a presumption that the parties intended that their prior statements, undertakings or agreements were not to form part of the contract. This rule may not be excluded or restricted.
(3) The parties' prior statements may be used to interpret the contract. This rule may not be excluded or restricted except by an individually negotiated clause.
(4) A party may by its statements or conduct be precluded from asserting a merger clause to the extent that the other party has reasonably relied on them.

Article 2.106 (ex art. 5.106 B) - Written Modification only

(1) A clause in a written contract requiring any modification or ending by agreement to be made in writing establishes only a presumption that an agreement to modify or end the contract is not intended to be legally binding unless it is in writing.
(2) A party may by its statements or conduct be precluded from asserting such a clause to the extent that the other party has reasonably relied on them.

Article 2.107 (ex art. 5.108) - Promises binding without acceptance

A promise which is intended to be legally binding without acceptance is binding.

Section 2 - Offer and Acceptance

Article 2.201 (ex art. 5.201) - Offer

(1) A proposal amounts to an offer if:
(a) it is intended to result in a contract if the other party accepts it, and
(b) it contains sufficiently definite terms to form a contract.
(2) An offer may be made to one or more specific persons or to the public.
(3) 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.

Article 2.202 (ex art. 5.202) - Revocation of an Offer

(1) 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).
(2) An offer made to the public can be revoked by the same means as were used to make the offer.
(3) However, a revocation of an offer is ineffective if:
(a) the offer indicates that it is irrevocable; or
(b) it states a fixed time for its acceptance; or
(c) it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

Article 2.203 (ex art. 5.203) - Lapse of an Offer

When a rejection of an offer reaches the offeror, the offer lapses.

Article 2.204 (ex art. 5.204) - Acceptance

(1) Any form of statement or conduct by the offeree is an acceptance if it indicates assent to the offer.
(2) Silence or inactivity does not in itself amount to acceptance.

Article 2.205 (ex art. 5.205) - Time of Conclusion of the Contract

(1) If an acceptance has been dispatched by the offeree the contract is concluded when the acceptance reaches the offeror.
(2) In case of acceptance by conduct, the contract is concluded when notice of the conduct reaches the offeror.
(3) If by virtue of the offer, of practices which the parties have established between themselves, or of a usage, the offeree may accept the offer by performing an act without notice to the offeror, the contract is concluded when the performance of the act begins.

Article 2.206 (ex art. 5.206) - Time Limit for Acceptance

(1) In order to be effective, acceptance of an offer must reach the offeror within the time fixed by it.
(2) If no time has been fixed by the offeror acceptance must reach it within a reasonable time.
(3) In the case of an acceptance by an act of performance under art. 2.205 (3), that act must be performed within the time for acceptance fixed by the offeror or, if no such time is fixed, within a reasonable time.

Article 2.207 (ex art. 5.208) - Late Acceptance

(1) A late acceptance is nonetheless effective as an acceptance if without delay the offeror informs the offeree that he treats it as such.
(2) If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror informs the offeree that it considers its offer as having lapsed.

Article 2.208 (ex art. 5.209) - Modified Acceptance

(1) A reply by the offeree which states or implies additional or different terms which would materially alter the terms of the offer is a rejection and a new offer.
(2) A reply which gives a definite assent to an offer operates as an acceptance even if it states or implies additional or different terms, provided these do not materially alter the terms of the offer. The additional or different terms then become part of the contract.
(3) However, such a reply will be treated as a rejection of the offer if:
(a) the offer expressly limits acceptance to the terms of the offer; or
(b) the offeror objects to the additional or different terms without delay; or
(c) the offeree makes its acceptance conditional upon the offeror's assent to the additional or different terms, and the assent does not reach the offeree within a reasonable time.

Article 2.209 (ex art. 5.210) - Conflicting General conditions

(1) If the parties have reached agreement except that the offer and acceptance refer to conflicting general conditions of contract, a contract is nonetheless formed. The general conditions form part of the contract to the extent that they are common in substance.
(2) However, no contract is formed if one party:
(a) has indicated in advance, explicitly, and not by way of general conditions, that it does not intend to be bound by a contract on the basis of paragraph (1); or
(b) without delay, informs the other party that it does not intend to be bound by such contract
(3) General conditions of contract are terms which have been formulated in advance for an indefinite number of contracts of a certain nature, and which have not been individually negotiated between the parties.

Article 2.210 (ex art. 5.211) - Professional's written confirmation

If professionals have concluded a contract but have not embodied it in a final document, and one without delay sends the other a writing which purports to be a confirmation of the contract but which contains additional or different terms, such terms will become part of the contract unless:
(a) the terms materially alter the terms of the contract, or
(b) the addressee objects to them without delay.

Article 2.211 (ex art. 5.212) - Contracts not Concluded through Offer and Acceptance

The rules in this section apply with appropriate adaptations even though the process of conclusion of a contract cannot be analysed into offer and acceptance.