Fact ：陈璐  8 1st 8 10th NongFa 农发 Co.(CHN) (Seller) Falconer Co.(US) (Buyer) sell agricultural commodities “commodities packed in sound bags” 以牢固袋子包装 Required “commodities packed in new bags” 以新袋子包装 NongFa’s Agent, Rogers Accepted the terms

NongFa (Seller) Falconer (Buyer) Price in the market had risen greatly Informed “No valid contract was ever formed” Alleged “A valid contract had been formed” Why NongFa alleged “no valid contract was ever formed”? Filed suit

Issue: 黄美欢 The agent was without authority had altered the terms of the offer. The agent’s acceptance was effective Minor alteration (packing in new bags) the contract was not formed NONG FA’ s claimFALCONER’s claim the contract was formed

Issue ：黄美欢 ISSUE  1.Whether the agent’s acceptance was effective?  2.Whether the different terms in the confirmation materially altered the terms of the offer?  3.whether a valid contract had been formed or not?

宋博华 Reasoning:  Our reasoning parts contains the following aspects:  1.CISG is the applicable law.  2.The new additional terms are not material alteration.  3.The agent has no authority.  4.No valid contract arises.

宋博华 Firstly, CISG is the applicable law. Reasons lie in the following aspects:  In accordance with CISG Art.1 1.The contract is for commercial sale of goods. 2.The parties are in China and in US. 3.Both parties have ratified CISG. So, CISG applies to the case.

宋博华 Secondly, the new additional terms are not material alteration. In accordance with CISG art.19(3): Attention  The packing terms are major terms, but the alteration of it is not the material alteration to the contract.  So, the new additional terms didn’t materially change the offer.

宋博华 Thirdly, the agent has no authority. Under the CISG,only the person to whom the offer is made and the authorized agent are entitled to accept the offer and create a binding contract.

4. Whether a valid contract is formed ? ＊ Seller’s claim :  No contract arises. ＊ Buyer’s argument :  A valid contract is formed. 冯玉洁

Judge’s ruling: CISG, Art 19(2) (1)Applicable law : CISG, Art 19(2) “a reply…which do not materially alter… constitutes an acceptance, unless the offeror …objects to the discrepancy…” “a reply…which do not materially alter… constitutes an acceptance, unless the offeror …objects to the discrepancy…”  (2)Two requirements for an acceptance containing alteration to be effective: The different terms do not materially alter the offer.  A. The different terms do not materially alter the offer. Without undue delay, the offeror does not object to the alteration.  B. Without undue delay, the offeror does not object to the alteration. 冯玉洁

not material  (3) In this case, alteration is not material, objects the offeror promptly (the second day) objects, no authority the agent has no authority to accept. No contract arised. 冯玉洁

Decision : The agent has no authority to accept. With the offeror’s objection, no valid contract exists. The court held for NongFa company. 冯玉洁

comment 1 ：梁月莹 Not concluded CISG →→ Offeror objects without undue delay ≠ UCC → If both parties are merchants, any additional terms contained in the seller’s confirmation automatically become a part of the contract unless the buyer notifies the seller of an objection to the additional terms within a reasonable time after receiving the confirmation containing the new terms. Concluded without the new terms The contract is established & NongFa (the seller) should make the goods packing in sound bags (according to the original offer)

comment 1 ：梁月莹 CISGUCC merchantsnonmerchants Minor change Material alteration Offeror rejects the minor change Offeror rejects the material alteration Different intentions Concluded, Concluded, New terms New terms Concluded, Original terms Concluded, Original terms Concluded, Original terms Concluded, Original terms Counteroffer, Concluded, Not concluded Original terms Rejection, Not concluded Rejection, Not concluded Concluded, Original terms Concluded, Original terms Mainly adopts mirror image rule Protects transaction

COMMENT 2 Whether a reply to the offer which contains modification still constitute an acceptance ? 2 conditions: Ⅰ.whether the modification is material alteration or not (objective condition) Ⅱ.if not material,whether the offeror objects these terms without undue delay (subjective condition) 邓诗彗

Ⅰ. Material alteration ＆ Minor changes Material alteration Minor alteration Definition not commonly accepted in the trade and that would result in surprise hardship to one party. commonly accepted in usual and customary usage in the trade. Example ○ price, ○ payment, ○ quality and quantity of goods, ○ place and time of delivery, ○ extent of one party’s liability, ○ settlement of disputes. 1.Emphasize the offeror’s legal obligation in the acceptance. 强调要约人的法定义务 2.Add terms of instruction. 增加说明条款 3.Alter the terms within the offeror’s permission,etc. 在授权范围内对要约作修改 Result Place greater liability on the other party. May not add new burden to the other. 邓诗彗

Ⅱ. Without undue delay “ within a reasonable time”, “promptly” this period should concern about all the circumstances in the transaction: the feature of the goods, the fluctuation of the market price, the communication medium, etc. 邓诗彗 不过分延迟

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