Notes on the United Nations Convention on the use of Electronic Communications in International Contracts and its effects on the United Nations Convention on Contracts for the International Sale of Goods.

It should be noted that the ECC, similarly to other international instruments, (149) distinguishes between delivery of messages to a specifically designated electronic address and delivery of messages to an address not specifically designated. (150) Under the Convention, if a message is sent to a designated electronic address it is received when it reaches that address. (151) When an electronic communication is sent to a non-designated address, a message is received when (i) the electronic communication "becomes capable of being retrieved by the addressee at that address" (which occurs when the communication reaches an electronic address of the addressee) and (ii) the addressee actually "becomes aware that the electronic communication has been sent to that address." (152)

The Convention, however, in contrast to the Model Law, does not specifically address when communications are sent to a nondesignated information system. "The Model Law distinguishes between communications sent to an information system other than the designated one and communications sent to any information system of the addressee in the absence of a particular designation." (153)

Withdrawal of offer, revocation of an offer, and rejection

How can a withdrawal of an offer made electronically be accomplished? For purposes of the CISG, an offeror can withdraw the offer, even if it is irrevocable, if the "withdrawal reaches the offeree before or at the same time as the offer." (154) Once the offer reaches the offeree, subject to CISG article 16(2), an offeror may revoke the offer as long as "the revocation reaches the offeree before he has dispatched an acceptance." (155) Finally, an offer, even if it is irrevocable, is terminated when a rejection, dispatched by the offeree, reaches the offeror. (156)

If electronic communication is the only method for the parties to communicate, withdrawing an offer might seem very difficult. Assume, for example, that the offeror is in the United States and the offerree is in Europe. The offeror e-mails his offer at 8 pm. Then, two or three hours later, he discovers something about the offeree, changes his mind about the offer and he dispatches a withdrawal. Assuming that the offer and the withdrawal are delivered to the offeree in the same sequence as dispatched, when the offeree checks his e-mail, he will have an offer first, then a withdrawal. This example illustrates some of the difficulties of an effective withdrawal in the context of electronic communications, assuming that the parties decided to negotiate exclusively through electronic communications. This difficulty is a consequence of the ECC's approach. Under the Convention, the time of receipt depends on the addressee's ability to retrieve the communication, not on the entry of the information into the system. (157) The Commission, however, noted that the difference in wording will not cause uncertainty as to the determination of the time of retrieval which is still to be determined pursuant to an objective method. (158) The Commission indicated that

[d]espite the different wording used, the effect of the rules on

receipt of electronic communications in the draft convention is

consistent with the article 15 of the UNCITRAL Model Law on

Electronic Commerce. As is the case under article 15 of the

Model Law, the draft convention retains the objective test of

entry of a communication in an information system to determine

when an electronic communication is presumed to be "capable

of being retrieved" and therefore "received." The requirement

that a message should be capable of being retrieved, which is

presumed to occur when the message reaches the addressee's

electronic address, should not be seen as adding an extraneous

subjective element to the rule contained in article 15 of the

Model Law. In fact "entry" in an information system is

understood under article 15 of the Model Law as the time when

a data message "becomes available for processing within that

information system," which is arguably also the time when the

message becomes "capable of being retrieved" by the

addressee. (159)

Thus, notwithstanding the language used, the Convention retains the objective test taken from the U.N. Model Law because the most accessible and reliable proof of when the electronic communication has left an information system is the information as to when the electronic communication was delivered to the destination or intermediary transmission system. (160)

Place of dispatch and receipt of an electronic communication

ECC article 10(3) and (4) specifically deal with the issue of the place of dispatch or receipt of an electronic communication. (161) Regardless of where the information system is located or from where the communication is retrieved, for purposes of the Convention, this place is the "place of business, as determined pursuant to Article 6." (162) Notwithstanding the wording, "paragraph 3 contains a firm rule and not merely a presumption." (163) The rationale behind these rules is to ensure that "there is some reasonable connection between the addressee and what is deemed to be the place of receipt, and that that place can be readily ascertained by the originator." (164)

(7) Place of conclusion of a contract

The CISG applies to sales contracts when the parties have their place of business in different states or "the rules of international private law lead to the application of the law of a Contracting State." (165) If the rules of international private law determine the applicable law based on the place of conclusion of the contract, where did the parties conclude the contract? For purposes of this article, the place the contract is concluded is not relevant. However, the place of conclusion of the CISG contract might be relevant for purposes of the court's jurisdiction and, in general, for other domestic law purposes. If the applicable law is the CISG, how can one determine where the contract was concluded? Article 23 merely states that "[a] contract is concluded when an acceptance of an offer becomes effective in accordance with the provisions of this Convention." (166) This means, reading in conjunction with CISG article 18(2), that a contract, subject to CISG article 18(3), is concluded when the acceptance "reaches" the offeror. (167) There is nothing in the CISG that indicates where the contract is concluded. Is this "gap" to be resolved pursuant to CISG article 7(2) or is it outside the scope of the CISG? The CISG history clearly indicates that a proposal to link the time of the conclusion of the contract with the place of the conclusion of the contract was rejected

for conflicting reasons. Some thought that the place would in

any event be determined by the time, others thought that it

would be undesirable to link place automatically to time, and

still others thought that no provision on place was needed since

the Convention would not refer to place of conclusion, but only

to time. (168)

In light of this history, the Secretariat Commentary on article 21 [draft counterpart of CISG article 23] states that

[s]uch a provision [dealing with place of conclusion] is

unnecessary since no provision of this Convention depends

upon the place at which the contract is concluded. Furthermore,

the consequences in regard to conflicts of law and judicial

jurisdiction which might arise from fixing the place at which the

contract is concluded are uncertain and might be unfortunate.

However, the fact that article 21 [draft counterpart of CISG

article 23], in conjunction with article 16 [draft counterpart of

CISG article 18], fixes the moment at which the contract is

concluded may be interpreted in some legal systems to be

determinative of the place at which it is concluded. (169)

It seems, then, reasonable to conclude that it is an external gap governed by the otherwise applicable domestic law. The Secretariat Commentary recognizes that in many instances the time when the contract is concluded may also be relevant for purposes of determining where the contract was concluded, (170) but such relevance is a matter for domestic law. (171)

Like the CISG, the ECC does not tackle the gap issue, at least directly. The ECC, however, does provide direction for determining the place of conclusion of an e-contract. ECC article 10(3) provides that "[a]n electronic communication is deemed to be dispatched at the place where the originator has its place of business and is deemed to be received at the place where the addressee has its place of business, as determined in accordance with article 6." (172) ECC article 10(4) is also relevant for this purpose: "Paragraph 2 of this article applies notwithstanding that the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is deemed to be received under paragraph 3 of this article." (173)