Comprehensive analysis of the composition, conditions and failures of the offer

In international commerce, the formation and invalidation of an offer are important contents of the United Nations Convention on Contracts for the International Sale of Goods (hereinafter referred to as the “Convention”). According to Article 14 of the Convention, to constitute a valid offer, the following conditions must be met:

1. Specificity: An offer must be made to one or more specific offerees to demonstrate the offeror’s intention to commit.
2. Certainty: The content of the offer should be clear and unmistakable, and should contain at least three basic elements, namely the name of the goods, quantity and price. Any unclear expression may invalidate the offer.
3. Legal intention: The offer must clearly express the intention to contract, that is, the offeror will promise to abide by the conditions of the offer and bear relevant legal responsibilities after acceptance.

In addition, the offer must not contain reservations such as “for reference only” or “subject to confirmation of…”. Such wording does not constitute a valid offer, but is only an invitation for the other party to make an offer.

Basic trading conditions for valid offers

In order to ensure the effectiveness of the offer, it is recommended that at least seven transaction conditions be clearly listed in the offer. These seven transaction conditions include: product name, quality (or specifications), quantity, packaging, price, shipment and payment terms of the goods. If these conditions are accepted by the offeree, there is no need to discuss these conditions again, thereby improving transaction efficiency.

Invalidation of the offer

The Convention also stipulates the issue of invalid offer. It points out that although an offer can be regarded as irrevocable, when the offeree refuses and notifies the offeror, the offer will automatically become invalid and the offeror will no longer be bound by the offer. Specific circumstances that lead to the invalidation of the offer include:

1. The offeror voluntarily withdraws the offer before the offeree accepts it.
2. The validity period specified in the offer expires.
3. The offer is invalid due to specific reasons, such as a government ban, the death of the offeror or the bankruptcy of a legal person.

In the context of electronic communications, the concept of offer failure is the same as the traditional form above and still follows the above principles.

Example of offer under electronic communication

The following is an example of a typical offer in an email:

September 10, 2015

OFFER

Dear Mr. Johnson,

We are glad to receive your inquiry of September 9#. You will be pleased to note that we have had a long history for over twenty years in handling locks. Our products are popularly received in the European market. As requested, we are making you an offer below:

1. Commodity: Swallow Brand copper locks
2. Packing: Every 100 locks in one carton
3. Quantity, Specification and Price:
10,000 locks, No.2015-F1, US$28.80 per lock FOB Tianjin
4. Payment: by irrevocable L/C at sight to be opened in our favor
5. Shipment: within 30 days after receipt of L/C

Our bank is the Bank of China, you may refer its branch in London to our standing. We look forward to receiving your first order.

This offer is good for five days.

Faithfully,
Feng Zhang

In this example, the content of the offer is clearly structured and clearly lists all aspects of the transaction conditions, providing a clear legal framework for subsequent transactions between the two parties.