commercial & contracts bodenheimer herzberg legal

For a contract to be legally valid, there must be an offer, and a corresponding acceptance. In practice, disputes revolving around the conclusion of a contract are not uncommon. Typical fact patterns include:

  • Formal requirements. By way of illustration: Is an exchange of e-mails sufficient to constitute a contract? While the answer to this question will depend on the jurisdiction in question, on the type of contract, and on the circumstances of the case, it should be noted that the approaches can vary greatly from one country to another. For instance, under German law, a contractual clause requiring modifications of a contract to be made in writing will be considered to have been “impliedly lifted” by way of a subsequent oral modification of the contract, unless the initial clause expressly provided that no such implied modifications shall be admissible.
  • Defining Element for Acceptance. In most jurisdictions, an acceptance letter (or e-mail, fax…) must be received by the counterparty in order for a contract to come into effect. Conversely, in the Anglo-Saxon world, i.e. in England and Wales, the United States, and other common law jurisdictions, the “posting rule” (or, in the United States, “mailbox rule”) provides that an acceptance is validly made when posted. To what extent this rule applies to modern means of communication requires a case-by-case analysis.
  • Discrepancies between Offer and Acceptance. In many jurisdictions, offer and acceptance must be 100 % compatible, and even slightest deviations will cause the acceptance to be nothing but a new (counter-)offer, meaning no contract has come into force. This said, some legal frameworks, such as the CISG, provide that a contract will come into effect in spite of any discrepancies so long as they are immaterial and provided no objections are raised immediately by the party that made the initial offer.
  • Authority Issues. In the event of a dispute, the authority of a person acting on behalf of one of the contracting parties is sometimes called into question. Issues arising in this context concern whether the applicable legal rules recognise the concept of apparent authority of directors and officers who are not statutory agents of a business entity and if so, whether the relevant requirements are fulfilled.