1. United Technologies International, Inc.
International Business Law Case Study
United Technologies International, Inc.
v. Magyar Légi Közlekedési Vállalat
(Málev Hungarian Airline)
Jeong Yun Park
Elena Shuppe
Sei Youn Kim

2. INDEX Facts Issues Issue #1 Was There An Offer?
Issue #2 Was There An Acceptance
Issue #3 Was There A Binding Contract
under CISG?
Conclusion
Appeal

3. VS Plaintiff: Pratt & Whitney
division of United Technologies International
Made an offer to the defendant on 14th December 1990
Got acceptance letter on 21st December 1990
After Defendant’s reneged to purchase the goods offered, sued the defendant.
To obtain a declaratory judgment
To prove that valid contract existed between the plaintiff and the defendant
Defendant: Magyar Légi Közlekedési Vállalat
(Málev Hungarian Airline)
Received offer from the plaintiff on 14th December 1990
Sent acceptance letter on 21st December 1990 (due date set by the plaintiff)
Later on refuse to purchase the product
Argues that there was no binding contract
(Offer did not existed:
No definite price and quantity mentioned)
FACTS
ISSUE VS
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

4. FACTS ISSUE ISSUE #1 ISSUE #2 ISSUE #3 APPEAL 14th Dec 1990 OFFER 1
OFFER 2(Extension)
Goods
(engine for aircraft)
PW4056
(for Boeing ER)
PW4152 or PW4156/A
(for Airbus A )
Price
$5,847,675
$5,552,675
Quantity
Total of 5
(2 for each aircraft.
Min. # of aircraft: 2
With 1 spare engine)
(Can purchase more for extra aircraft)
Time
To be delivered as stated in Attachment 1
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

5. 5 Part Test for Contract CISG FACTS OFFER - “sufficiently definite”
ACCEPTANCE
Consideration
Legality
Capacity
FACTS
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CISG
CISG Applies to Contracts for the International Sale of Goods
Basic principle:
The goal of the CISG is the creation of a uniform body of
International commercial sales law
CONCLUSION
APPEAL

6. ISSUES Was There an OFFER? 2. Was There an ACCEPTANCE?
FACTS
Was There an OFFER?
2. Was There an ACCEPTANCE?
3. Can Government Approval be a Limitation to Contract Under CISG?
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
여기서 넘어가기 전에 we are going to explain each issue in IRAC form, applying CISG rules
CONCLUSION
APPEAL

7. ISSUE #1Was There an OFFER?
FACTS
Rule of Law
General Rule
For a validly binding contract to exist all five elements of contract has to be satisfied
Five elements: offer, acceptance, consideration, legality, capacity
Offer
CISG, Article 14 (1)
“a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance”
“[a] proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.”
CISG, Article 3(1)
Contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production.
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

8. VS ISSUE #1Was There an OFFER? Application FACTS Plaintiff Defendant
GOODS
- PW4056 (Boeing) - PW4152 OR PW4156/A (Airbus)
PRICE - Specifically mentioned (PW4056 $5,552,675 PW4152 & PW4156/A $5,847,675)
QUANTITY: engines & 1 spare engine per aircraft. (min aircraft: 2)
TIME - Specified the deadline for acceptance( ) - Attachment 1 specify the delivery date
Art. 14 (1)CISG (Sufficiently Definite)
‘Unilateral Power' for defendant to chose is commonly practiced in legal and commercial practice
FACTS
Defendant
GOODS
- 2 parallel offers for goods
PRICE
- No explicitly stated price, only base price is mentioned
QUANTITY
- Dependent on other contract (buying the aircraft)
TIME:
- Continued negotiations after Provisions for counter-offer
Ambiguous “goods” & “ quantity “(not “sufficiently definite” )
Insufficient data “make provisions for determining price”(Art. 14 (1)CISG)
ISSUE
ISSUE #1 VS
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

9. ISSUE #2 Was There an ACCEPTANCE?
FACTS
Rule of Law
Acceptance
CISG, Article 18 (1)
An acceptance is “[a] statement made by, or other conduct of, the offeree indicating assent to an offer is an acceptance.”
CISG, Article 19(1)
“[a] reply to an offer which purports to be an acceptance but contains additions, limitations, or other modifications is a rejection of the offer and constitutes a counter-offer”
CISG, Article 23
“[a] contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention”
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

10. VS ISSUE #2 Was There an ACCEPTANCE? Application FACTS Plaintiff
Intent to Accept
- letter of acceptance unambiguously states that it accepts the offer (CISG, Article 14(1))
Time of Acceptance
letter of acceptance sent to plaintiff by the defendant on
(due date set by the offeror)
- the acceptance came into force upon receiving the defendant's letter of acceptance (CISG, Article 23)
Limitation
- keeping acceptance confidential does not constitute "additions, limitations, or other modifications" (CISG, Article 19(1)
FACTS
Defendant
Intent to Accept
- intent to make a future contract, premium was not transferred yet (CISG, article 14 (1))
Time of Acceptance
- discuss finalization of the contract(CISG, article 23)
Limitation
neither of the government signed the contract yet, provisions for new offer (CISG, article 19(1)
ISSUE
ISSUE #1 VS
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

11. ISSUE #3 Can Government Approval be a
Limitation to Contract Under CISG?
FACTS
Rule of Law
CISG:
1. The sale must be international
2. The buyer and seller must have their places of business in different states.
3. Additionally, either:
Both of the states must be contracting parties to the convention, or
b) The rules of private international law must lead to the application of the law of a Contracting State.
*Preempt: To take precedence over. To determine if CISG applies to a particular contractual issue, one must look to the convention itself, not domestic law
*Choice-of-Law Clause: Contractual provision that identifies the law to be applied in the event of a dispute over the terms or performance of the contract
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

12. ISSUE #3 Can Government Approval be a
Limitation to Contract Under CISG?
FACTS
Rule of Law
Section 215 of Civil Code : “ if the conclusion of the contract requires the approval of the third party, the contract will not come into force until approval is obtained”.
Section 228 (1) of Hungarian Civil Code : “ if the parties agree to terms that makes a contract’s entry into force dependent on the uncertain event in the future, the agreement will not come into force until the event occurs”.
Section 228 (2) of Hungarian Civil Code : “ if parties provide termination of a contract upon the occurrence of an uncertain event, the contract will terminate upon the occurrence of that event. “
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

13. VS ISSUE #3 Can Government Approval be a
Limitation to Contract Under CISG?
FACTS
Application
Plaintiff
- Both the U.S. and Hungary are parties to CISG
- Nothing in CISG that forbids from parties agreeing to the convention
HOWEVER,
Domestic Law is preempted by CISG
ISSUE
Defendant
Plaintiff was notified of the condition to make the contract come into force
(both governments’ signature)
(Section 215, 228(1), 228(2))
- Provision for Choice-of-Law Clause to be made in the final Contract
ISSUE #1 VS
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

14. CONCLUSION YES - NO Was There an OFFER? 2. Was There an ACCEPTANCE?
FACTS
Was There an OFFER?
YES
2. Was There an ACCEPTANCE?
3. Can Government Approval be a Limitation to Contract Under CISG?
- NO
ISSUE
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
APPEAL

15. APPEAL Appealed to Hungarian Supreme Court (25 September 1992) Ruling
FACTS
ISSUE
Appealed to Hungarian Supreme Court
(25 September 1992)
Ruling
: Amended the Judgment of the Previous Court
ISSUE #1
ISSUE #2
ISSUE #3
CONCLUSION
Thank You! 
APPEAL