KluwerArbitration

Document information Chapter 2: Formation and Authority of Agents

Legislative History (key documents)
Publication In preparation of the 1994 Principles – Rapporteur Michael Joachim Bonell:
UNIDROIT Principles of StL-Doc. 2, pp. 1-6 (1st outline in 1971); StL-Doc. 3, pp. 9-16 (2nd outline in 1972);
International Commercial
Contracts: An Article-by- StL-Doc. 8, pp. 4-16 (1st draft and questionnaire in 1975); StL-Doc. 9, pp. 4-10 (replies to
Article Commentary the questionnaire in 1976); StL-Doc. 11 (2nd draft in 1977); StL-Doc. 15 (1st draft on
(Second Edition) standard terms in 1979); StL-Doc. 16, pp. 1-13 (1st discussion in 1979); StL-Doc. 25,
pp. 1-11 (3rd draft in 1983); P.C.-Misc. 4, pp. 1-8 (2nd discussion in 1983); StL-Doc. 41 (4th
draft in 1988); P.C.-Misc. 12 (3rd discussion in 1988);
Organization In preparation of the 2004 Principles (change to Art. 2.1.8, 2.1.18; change to Official
International Institute for Comments on Art. 2.1.1, 2.1.7, 2.1.15):
the Unification of Private
Law StL-Misc. 24, pp. 46-49 (1st discussion with respect to electronic commerce in 2002); StL-
WP.11, pp. 5-6, 8-10 (2nd discussion in 2002); StL-[unnumbered document], pp. 2–3 (final
decision in 2003);
Promulgation In preparation of the 2016 Principles (change to Art. 2.1.14; change to Official Comments
on Art. 2.1.15) ) – Rapporteur Neil Cohen:
2016
StL-Doc. 126 (position paper in 2014); StL-Doc. 130 rev., pp. 2-3 (revised comments on Art.
2.1.15 in 2015); StL-Misc. 31 rev., pp. 3–9 (1st discussion in 2015); StL-Doc. 129 rev., pp. 2-–4
(revised draft of Art. 2.1.14 in 2016);StL-Misc. 32, pp. 6-10 (2nd discussion in 2016).
Link(s) to Related
Legislation Section 1 Formation
Unidroit PRINCIPLES OF
INTERNATIONAL Article 2.1.1 (Manner of formation)
COMMERCIAL CONTRACTS A contract may be concluded either by the acceptance of an offer or by conduct of the
2016 parties that is sufficient to show agreement.

A. Beyond the Traditional Approach to Contract Formation

Bibliographic 1. The Classical Offer-and-Acceptance Test
reference 1 Art. 2.1.1 covers firstly the classical offer (Art. 2.1.1-2.1.5, 2.1.11 (1)) and acceptance (Art.
'Chapter 2: Formation and 2.1.6-2.1.10, 2.1.11 (2)) scenario, (1) without any other requirement than agreement (Art.
Authority of Agents', in 3.1.2) to be proven by the party who wants to rely on the contract, and subject to capacity
Eckart Brödermann , of the parties (Art. 3.1.1) and mandatory law requirements (Art. 1.4), if any. This may
UNIDROIT Principles of require an interpretation of the statements made by either party to establish their
International Commercial intention that the agreement will have legal effect. (2) The offer-and-acceptance test is
Contracts: An Article-by- supplemented (i) by Art. 2.1.19-2.1.22 in case of contracting with standard terms and (ii)
Article Commentary by Art. 2.1.12-2.1.18 coping with “uncertainties arising of the usual offer-and-acceptance
(Second Edition), 2nd course of negotiations”. (3) The principles on interpretation in Art. 4.2-4.3 (including the
edition (© Kluwer Law “reasonable person of the same kind in the same circumstances” standard in Art. 4.2 (2))
International; Kluwer Law (4) may assist in interpreting statements which arguably may contain an offer or an
International 2023) pp. 103 acceptance. In practice, especially in complex long-term contract (→ Art. 1.11 3rd
- 162 hyphen), projects with negotiations of multiple agreements (or annexes to a framework
agreement over many months), the classical offer-and-acceptance test may fail (5) and
merely serves as a “guidance in finding whether an agreement between the parties has
been reached” (6) , whereby circumstances may require to carefully distinguish between
different kinds of agreements negotiated in parallel.
2. Conduct Sufficient to Show Agreement
2 Art. 2.1.1 covers secondly the possibility of agreement by conduct, (7) as interpreted
pursuant to Art. 4.2 (2) and 4.2.3, and subject to any agreement on a certain form (→ no. 4
below) or applicable mandatory law which also might require to observe a certain form
(Art. 1.4). Again, this may require an interpretation of the statements made by either
party to establish their intention that the agreement will have legal effect. (8) This is in
line with various legal systems around the globe (9) and goes beyond the wording of the
CISG (10) for which this is also being argued on the basis of Art. 7 (2) CISG. (11) Conduct
sufficient to show agreement may include a ‘closing’, especially in complex multi-party
situations, (12) or – as often observed in practice – the factual beginning of its execution,
e.g. by a payment, (13) although some points of the agreement are not yet settled (14) (→
Art. 2.1.14). Automated contracting via systems that set in motion self-executing
electronic actions (e.g. EDI – Electronic Data Interchange) also fall within this category.
(15)

B. A ‘Relaxed’ Approach towards Contract Negotiation

1
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 3 In view of the many hurdles to international, often intercultural and long-distance
contracting it will be often helpful that Art. 2.1.1, in combination with Art. 2.1.2
(“sufficiently definite”) (16) takes a “relaxed approach towards the formation of contracts”
(17) as compared to some domestic laws (also → Art. 2.1.14). Upon acceptance of an offer,
which misses or does not clearly define an essential term, (18) there can be a contract.
(19) In light of the favor contractus principle, the Unidroit Principles contain numerous
default rules to fill in missing details (e.g. Art. 5.1.5-5.1.7, 4.8, Art. 5.1.1-5.1.3).

C. Options: Form
4 Pursuant to Art. 1.5, parties are free to agree (or one party can insist unilaterally, → Art.
2.1.13), that their contract conclusion, as well as any later changes to such contract, be
submitted to a written form whereby the parties might vary the broad definition in Art.
1.11 5th hyphen (→ Art. 1.5) and further specify the kind of execution of a formal document
(e.g. a traditional form of signing including docusign, or on exchanging a signed document
as a pdf). In long-term contract relations (→ Art. 1.11 3d hyphen), which often include a
multitude of contracts, the parties may wish to vary the form requirements depending on
the kind of declarations or agreements. Example from practice under the Unidroit
Principles in 2021 (automotive industry): For a framework contract on the construction of
parts discarding the standard terms of either party the parties agreed (i) on a written
form for the conclusion of the framework agreement which shall govern the entire
business relationship; (ii) on a special form for orders to be exchanged per EDI while
amendments of the framework agreement shall require signed documents to be
exchanged per pdf; (iii) on a special clause with regard to future references to standard
terms which either party may have automatically integrated in their electronic system
and/or their standard texts for orders or order confirmations, whereby the parties agree
that these shall be disregarded even if the other party declares (quasi automatically) to
approve them by an acceptance declaration.

D. ‘Sham’ or ‘Simulation’ (20)

5 If the wording of a contract does not reflect the (established and known; → Art. 4.1 (1))
genuine or real common intention of the parties to be bound by the contents of a
documented contract (e.g. by a conspiracy to circumvent mandatory law (fraus legis –
evasion) (21) or to cheat a third party like a shareholder of one party (22) ), the legal
consequence for such ‘appearance of a contract’ (23) depends on the true joint intention
of the parties (even if this follows, pursuant to Art. 4 (2), from an individualised and
contextualised ‘reasonable person’ test (24) ). (i) If there is no intention to be bound at
all, there is no contract. (25) (ii) If the genuine commitment relates to another agreement,
“the latter agreement should be deemed valid and enforceable.” (26) This is why ‘back
dating’ (e.g. to evade tax consequences) does not help; and why ‘business contributions’
must be handled transparently (e.g. by integrating them into price and amortisation
calculations). The same must apply to ‘side letters’. (27)
Article 2.1.2 (Definition of offer)
A proposal for concluding a contract constitutes an offer if it is sufficiently definite and
indicates the intention of the offeror to be bound in case of acceptance.

A. Sufficient ‘Definiteness’ plus ‘Intention’

1 Art. 2.1.2 (which is based on Art. 14 (1) CISG) (1) defines an offer (2) with two criteria
(‘sufficient definiteness’ and ‘intention’) which “can be found in most, if not all, legal
systems”. (3) The history of the provision points in the direction that (international) public
proposals on the internet are to be interpreted as ‘mere invitations to make an offer’ (4)
and do not show an intention to be bound unless this is clearly expressed. (5) The same
applies under usual circumstances to calls for tender (6) and price quotations. (7) A
Letter of Intent (‘LoI’) or Memorandum of Understanding (‘MoU’) may or (usually) may not
bind the parties, as well as a ‘comfort letter’, (8) depending on the wording and the
circumstances (9) and the interpretation pursuant to Art. 4.1. and 4.3.

B. Interrelationship of the Two Criteria

2 Strength in one of the criteria (‘sufficient definiteness’, ‘intention’) can compensate the
weakness with respect to the other. (10) The more concrete the essential terms are being
communicated, the higher is the likelihood of being bound (11) (without explicit wording
to the contrary). An extreme example from practice: The postcard of the Chairman of a
large German company to a constructor ordering the ‘same plant’ as previously built in a
Middle American country for the business site in Brazil at the same conditions. (12) An
intention to be bound by orders may also be created by installing certain computer
systems for automatic ordering. (13) The parties are free (Art. 1.1) to avoid a binding
effect (by a clause or by their behaviour, Art. 4.2 (1)) or to create such an effect and
thereby create at least a responsibility for ‘sunk costs’ of the other party (Art. 1.8). (14)
Depending on the circumstances (Art. 4.1– 4.2), the parties may be bound when leaving
the determination of (even essential) terms to one of the parties or to a third party. If the
open term is price, they are bound pursuant to Art. 5.1.7. The omission of the third party
to determine the missing term as well as an (otherwise non-binding) ‘agreement to

2
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 negotiate’ certain open terms in the future may amount to contract formation under the
circumstances of Art. 2.1.4 (2). (15)
Article 2.1.3 (Withdrawal of offer)
(1) An offer becomes effective when it reaches the offeree.
(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the
offeree before or at the same time as the offer.

A. Para. 1 is Declaratory
1 Para. 1 (correlating with Art. 15 (2) CISG) (1) repeats Art. 1.10 (2). (2) For the definition of
“reaches” see Art. 1.10 (3).

B. Any Withdrawal Must be Clear (3)

2 Compared to Art. 2.1.4 on revocation, (4) para. 2 covers the scenario that the offer did
not yet become effective. (5) Para. 2 becomes important in cases thatwould otherwise fall
under Art. 2.1.4 (2). It correlates with the rule in Art. 2.1.10 for withdrawal of acceptance.
Article 2.1.4 (Revocation of offer)
(1) Until a contract is concluded an offer may be revoked if the revocation reaches the
offeree before it has dispatched an acceptance.
(2) However, an offer cannot be revoked
(a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is
irrevocable; or
(b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the
offeree has acted in reliance on the offer.

A. An International Middle Ground (1)

1 Art. 2.1.4 continues an international compromise reached in 1964 in The Hague (for the
Convention Relating to a Uniform Law on the Formation of Contracts for the International
Sale of Goods) (2) to bridge between diverging national laws with regard to the issue of
revocability of an offer. (3) It correlates with Art. 16 CISG (4) and similar solutions in a
number of national laws, e.g. in China, Japan, Russia and in the USA. (5)

B. A Self-Explanatory Principle with two exceptions

2 Para. 1 states the principle of revocability until the dispatch of the acceptance. (6)
Para. 2 states two exceptions which derive from the general principle prohibiting
inconsistent behaviour (7) (→ Art. 1.8) and thereby from the general principle of good faith
and fair dealing in Art. 1.7. (8) Lit. a) requires an interpretation of the offer under the
interpretation rules in Art. 4.2, 4.3, (9) lit. b) calls for an assessment if “a reasonable
person [add: in the same circumstances] could be expected to act in reliance of the
offer”; (10) this also entails an interpretation of the offer pursuant to Art. 4.2, 4.3. (11)
Article 2.1.5 (Rejection of offer)
An offer is terminated when a rejection reaches the offeror.

A. Interpretation of Possibly Implicit Rejections

1 Art. 2.1.5 states a general and self-evident principle. (1) While an explicit rejection is
clear, a statement with a possibly implicit rejection needs interpretation (Art. 4.2-4.3). A
request to reconsider or to adjust a condition (e.g. price) is usually not yet a rejection. (2)
An acceptance communicated after a rejection of an offer constitutes a new offer. (3)

B. Termination of an Offer by Other Means

2 Other means of eliminating the effect of an offer include revocation (Art. 2.1.4) (4) and
lapse of time (Art. 2.1.7). (5) The issue of capacity (e.g. the impact of death; or the
disappearance of the capacity of a company (6) ) is not covered by the Unidroit
Principles (→ Art. 3.1.1). For Europe it has been suggested for the PECL that the general
principles imply that an offer “remains unaffected” by the death of either party “unless a
contrary intention can expressly or impliedly be derived from the offer” (7) (→ Art. 4.2-
4.3).
Article 2.1.6 (Mode of acceptance)
(1) A statement made by or other conduct of the offeree indicating assent to an offer is
an acceptance. Silence or inactivity does not in itself amount to acceptance.
(2) An acceptance of an offer becomes effective when the indication of assent reaches
the offeror.
(3) However, if, by virtue of the offer or as a result of practices which the parties have
established between themselves or of usage, the offeree may indicate assent by
performing an act without notice to the offeror, the acceptance is effective when the act

3
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 is performed.

A. Function and Systematic Place of the Principle

1 Art. 2.1.6 correlates with Art. 2.1.2 on offer within the frame of an open, favor contractus-
based approach towards contract formation (→ Art. 2.1.1 no. 3).

B. When Does the Offeree’s Expression of Assent Amount to Acceptance?

1. The Basic Principle in Para. 1 Sentence 1
2 Pursuant to para. 1, and in line with Art. 18 (1) CISG, (1) the expression of assent by a
statement or by conduct (‘implied acceptance’ as interpreted pursuant to Art. 4.2-4.3) of
an offeree (2) (who is capable to act, Art. 3.1.1) needs to be a timely (→ Art. 2.1.7-2.1.8),
straightforward and unqualified (unconditional) (3) ‘simple affirmation’ (4) (as
distinguished from a modified acceptance under Art. 2.1.11), (5) free from ‘grounds for
avoidance’ like a mistake (→ Art. 3.2.1 et seq.). The expression of assent is free of a
specific form (Art. 1.2), (6) unless otherwise agreed (Art. 2.1.13; including a possible
agreement on a particular means of communication) (7) or stipulated in the offer (Art. 1.1;
duly interpreted pursuant to Art. 4.2-4.3). Usually, a ‘confirmation of order’ will not
amount to assent but rather to an acknowledgement of receipt of an offer (8) while a
request to dispatch the offered goods (9) or starting immediate or prompt performance
(10) will do so.
2. Conduct without Notice (Para. 3)
3 Para. 3 mentions three self-explanatory specific scenarios – i.e. (i) the contents of the
offer (duly interpreted, → Art. 4.2, 4.3), (ii) practices established between the parties (→
Art. 1.9), or (iii) a usage (→ Art. 1.9) – which permits acceptance by ‘conduct’ (11)
(‘performing an act’) (12) which, duly interpreted (→ Art. 4.2, 4.3), (13) may constitute
assent. Interpretation will be required in particular, concerning the circumstances, in the
extreme scenario if the recipient of an offer starts to under-take performance but has not
yet (fully) finished (14) at a moment when it receives a revocation of the offer (→ Art.
2.1.4).
3. Possible Impact of Silence (Para. 1 Sentence 2)
4 Silence does not amount to acceptance (para. 1 sentence 2) (15) unless (i) Art. 2.1.12 on
‘writings in confirmation’ applies; (ii) established practices or usages between the
parties (para 3; Art. 1.9 (1)) may require otherwise (16) , e.g. an ‘automatic’ prolongation or
renewal of contracts, (17) a silent ‘continuation of a contract’ after a business transfer (18)
or a ‘writing in confirmation’ (while the effect of such writings correlates to an established
practice in some regions of the world such as Germany [kaufmännisches
Bestätigungsschreiben], (19) the proof of such a practice is not necessary because of the
more special rule in Art. 2.1.12); or (iii) if the interpretation (Art. 4.2-4.3) of the action of
the offeror (e.g. silence upon the ‘acceptance’ by the offeree of a definite proposal made
‘without obligation’ or ‘subject to contract’) (20) or of the offeree (e.g. solicitation of the
offer) (21) leads to a ‘duty to speak’, (iv) if, in cases of contracts for the sole benefit of
the offeree, (22) the circumstances (e.g. an offer to act as a suretyship or to change a
contract to the benefit of the offeree, an Art. 9.2.1 (lit. b) transfer situation) and/or a
specific principle imply a duty to promptly speak up if acceptance is not wanted
(example: silence upon an offer to release: Art. 5.1.9 (2) (23) ).

C. When Does the Offeree’s Expression of Assent Become Effective to Establish a

Binding Contract?
5 Upon the timely (→ Art. 2.1.7-2.1.8) receipt of the (not withdrawn, Art. 2.1.10) notice of
acceptance by the offeror (para. 2-3; Art. 1.10 (2) (3)) which includes ‘deemed receipt’
under certain circumstances (e.g., for an acceptance sent by the same means as the offer,
by reaching the recipient’s sphere of control – e.g. its electronic email-inbox (24) under
ordinary circumstances). (25) In in-person meetings (or video-conferences, WhatsApp-
Chats and the like), “the contract is concluded as soon as the offeror perceives the
acceptance.” (26) (→ Art. 2.1.7 (1) sentence 2). “Uncertainties arising of the usual offer-and-
acceptance course of negotiations” (27) are covered in Art. 2.1.12-2.1.18.

D. Options
6 Party autonomy prevails (→ Art. 1.5). The parties can agree e.g. that the conclusion of
the contract is (i) dependent on an agreement, on a specific matter or on a particular
form (→ Art. 2.1.13), (ii) or on any other condition (→ Art. 5.3.1); or, to the contrary and
facilitating contract conclusion, (iii) they can agree that some terms be deliberately left
open (→ Art. 2.1.14).
Article 2.1.7 (Time of acceptance)
An offer must be accepted within the time the offeror has fixed or, if no time is fixed,
within a reasonable time having regard to the circumstances, including the rapidity of
the means of communication employed by the offeror. An oral offer must be accepted
immediately unless the circumstances indicate otherwise.

4
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 A. Impact of Time
1 According to sentence 1, an offer must be accepted after the time fixed in the offer (or
an amendment thereof), (1) as calculated pursuant to Art. 2.1.8, (2) or the time which is
reasonable under the circumstances. (3) These include e.g. the ‘means of communication’
(4) including the expected time for acceptance, any practices or usages (Art. 1.9) and
other criteria following from the interpretation of the offer under Art. 4.2, 4.3, such as a
fluctuating value or perishable nature of the object of the contract. (5) The offer “self-
destructs and becomes incapable of acceptance”, (6) except for (i) action by the offeror
resurrecting the offer (Art. 2.1.9 (1)) or (ii) an uncommented delay in transmission (Art. 2.1.9
(2)). (7) Absent indications to the contrary, the ‘reasonable time’ for acceptance starts
with receipt of the offer. (8) Risks for debate exist (and caution is therefore required) in
cases of tight timing over different time zones (Art. 1.12) and reduced working hours on
certain days, such as 24 or 31 December in some jurisdictions with a Christian
background, (9) which do not fall under the scope of Art. 1.12. Art. 2.1.7 correlates with Art.
18 (2) CISG (10) and is in harmony with multiple national legal contract laws. (11)

B. ‘Oral’ Offer
2 Sentence 2 describes the extreme example of the possible impact of the means of
communication employed by the offeror (sentence 1) at the time of acceptance. The rule
calls for immediate acceptance of oral offers (12) (not allowing reflection). (13) It applies
to all forms of real-time communication, including emails when used for quasi-instant
chatting, (14) and it is subject to ‘circumstances indicat(ing) otherwise’.

C. Risk Allocation
3 As the offeror is the ‘master of the offer’ (15) (who could set a time for acceptance or
revoke an offer, Art. 2.1.4; and who chooses the appropriate means of communication (16)
), it has been argued that it should bear the risk “whether the indication of assent
reached the offeror within ‘a reasonable timing’” (17) in cases where the general
principles of burden of proof suggest otherwise. (18)
Article 2.1.8 (Acceptance within a fixed period of time)
A period of acceptance fixed by the offeror begins to run from the time that the offer is
dispatched. A time indicated in the offer is deemed to be the time of dispatch unless
the circumstances indicate otherwise.

A. Calculation of Relative Time Periods

1 For the calculation of the beginning of a fixed relative time period (e.g. “open for
acceptance for seven days”), (1) Art. 2.1.8 protects the offeror who has an interest to bear
the risk of market developments for a short period only, while the offeree may like to
have time to test the market. (2) Absent an absolute time period set by the offeror as the
“master of the formation process”, (3) the time period runs pursuant to sentence 1 from
the time of dispatch, i.e. when it leaves the sphere of control of the offeror. (4) This rule is
in line with the earlier compromise reached in The Hague for the ULF in 1964 (5) and on
the U.N. level during the 1970s for the CISG (“a simplified version” of Art. 20 CISG); (6) it is
helpful to have because it creates certainty and national rules on the commencement for
the calculation of the time of acceptance differ. (7) For the computation of the set time
period (impact of official holidays, time zones) → Art. 1.12.

B. Uncertainty of Time of Dispatch

2 If the time of dispatch cannot be determined (e.g. through the record of transmission),
the date indicated on the offer (e.g. on a letter) becomes relevant pursuant to sentence 2
“unless the circumstances indicate otherwise” (e.g. a date after the arrival date). (8) In
such a case, it may be possible to calculate the time of dispatch from the arrival date
and to apply sentence 1. (9)
Article 2.1.9 (Late acceptance. Delay in transmission)
(1) A late acceptance is nevertheless effective as an acceptance if without undue delay
the offeror so informs the offeree or gives notice to that effect.
(2) If a communication containing a late acceptance shows that it has been sent in such
circumstances that if its transmission had been normal it would have reached the
offeror in due time, the late acceptance is effective as an acceptance unless, without
undue delay, the offeror informs the offeree that it considers the offer as having lapsed.

A. Principle (Para. 1)
1 In line with Art. 21 (1) CISG, (1) the 1964 compromise in the ULF (2) and various laws
around the globe, (3) para. 1 grants an effect – a “retroactive cure” (4) – to a late
acceptance. Akin to a new offer, (5) and except for transmission errors (para. 2), para. 1
creates an option (limited in time, “without undue delay”) to the (initial) offeror who
remains the master of the contract formation. (6) The extent of the acceptable time to
respond by notice (Art. 1.10) (7) requires due regard to the circumstances in light of the
general duty of good faith and fair dealing (Art. 1.7). (8) The burden of proof is upon the

5
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 party who wishes to rely on the contract formation. (9)

B. Exception (Para. 2)
2 In cases of (recognisable, (10) irregular (11) ) delay in transmission (12) (which are not
attributable to the offeree) (13) a late acceptance creates a duty to speak up (14) without
undue delay upon the offeror – and tell that it considers the offer as having lapsed –, if it
wants to avoid contract formation. (15) If it does not do so, the acceptance creates the
contract; “[t]he offeror’s silence or inactivity therefore exceptionally amounts to a
confirmation of the acceptance.” (16) Like the principle in para. 1, this exception is in line
with Art. 21 CISG and the ULF. (17) It provides certainty and goes back to the general
German Commercial Code of 1861. (18) Beyond the wording (even if the communication
does not ‘show’ the lateness), in light of the general duty of good faith and fair dealing
(Art. 1.7), para. 2 applies also when the offeror has been ‘notified’ by the offeree in
advance by other means (e.g. a text message or phone call) that the notice of acceptance
was sent timely. (19)
Article 2.1.10 (Withdrawal of acceptance)
An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the
same time as the acceptance would have become effective.
A Self-Explanatory Addendum to 2.1.6(2)
27 Art. 2.1.10 correlates with Art. 2.1.3 (2) (1) for the withdrawal of offers. It is repeti tive
with regard to Art. 1.10 (2), (3). (2) Yet, it can serve as a helpful reminder of this general
principle in the context of acceptance declarations.
Article 2.1.11 (Modified acceptance)
(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.
(2) However, a reply to an offer which purports to be an acceptance but contains
additional or different terms which do not materially alter the terms of the offer
constitutes an acceptance, unless the offeror, without undue delay, objects to the
discrepancy. If the offeror does not object, the terms of the contract are the terms of the
offer with the modifications contained in the acceptance.

A. Modifications in the Acceptance Notice Generate a Counter-Offer

1 Para. 1 reflects a self-explanatory consequence of the traditional (1) ‘mirror rule’ (2) on
offer and acceptance which requires an unqualified acceptance. (3) Thus, upon proper
interpretation (Art. 4.2), a ‘yes, but...’ is to be constructed as ‘no, but...’. (4) If the offeree
requires a mere increase of quantities, it can be tricky to interpret whether his statement
constitutes an Art. 2.1.11-case or a straightforward acceptance of the initial offer (Art. 2.1.6
(1)) combined with a new offer (Art. 2.1.2) for the additional quantities. (5)

B. But Non-Material Alterations Generate a Duty on the Offeror to Speak Up

2 In the spirit of favouring contract conclusion (favor contractus), once the key issues have
been agreed (6) and absent an agreement on the form of the contract conclusion (Art.
2.1.13), para. 2 provides, in line with earlier international compromises, (7) for an
exception for non-material (minor) amendments (8) as they happen often in cross border
trade between different cultures (whereby, also with regard to Art. 19 (3) CISG, (9) changes
relating to price, payment, quality, quantity, place, time of delivery, liability may usually
be material (10) ). (11) The test is whether, under the circumstances of the case (and
possibly relevant usages, Art. 1.9), the offeree could expect the offeror to tacitly agree to
the proposed alteration. (12) Minor amendments do not alter the qualification of an
acceptance notice as an acceptation (and bind the offeror under para. 2 sentence 2)
unless the offeror insists on the mirror rule by a notice of objection (Art. 1.10) “without
undue delay” (13) (i.e. as soon as it knows about the discrepancy). (14) In practical terms,
para. 2 requires that the offeror reviews the acceptance notice for possible
discrepancies. (15) The risk of inaction lies with the offeror; (16) which appears acceptable
in international and inter-cultural business which generally requires an increased level of
attention. If the offeree wishes to avoid putting the contract conclusion at risk, as master
of the acceptance notice the offeree can make amendments to the offer contingent on
their acceptance by the offeror and indicate clearly that it waives the amendments in
case they are not suitable. (17) To avoid discussion about the assessment of a change as
nonmaterial as a matter of practice, or to abide by a duty of co-operation (Art. 5.1.3) as a
matter of law (e.g. when negotiating a contract on supply against the background of an
existing framework agreement under the Unidroit Principles), or in view of particular
circumstances and the practice of negotiation with (implicitly) agreed forms of
communication (Art. 1.9, 1.7), any deviations from the contractual text may require that
the offeree speaks up and communicates the change clearly, e.g. in a cover email. This
latter relates in particular to the negotiation of longterm contracts (→ Art. 1.11 3d
hyphen), often over many months (while the parties may have in fact already started to
execute the agreement for which they are negotiating the terms). (18)

6
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 C. Options for the Offeror
3 Pursuant to Art. 1.5, the offeror can (i) integrate into its offer a clause requiring strict
compliance, explicitly rejecting any deviation, material or immaterial; (19) or (ii) control
the acceptance declaration and use its right of rejection under para. 2, sentence 1. (20)

D. Special Rule for Standard Terms

4 Art. 2.1.11 does not cover the battle of forms between standard terms, i.e. a special case
of modified acceptance, (21) which is treated elsewhere (Art. 2.1.22). (22) Article 2.1.12
(Writings in confirmation)
If a writing which is sent within a reasonable time after the conclusion of the contract
and which purports to be a confirmation of the contract contains additional or different
terms, such terms become part of the contract, unless they materially alter the contract
or the recipient, without undue delay, objects to the discrepancy.

A. Exception: Changes Contained in Written ‘Confirmations of the Contract’ Might

Alter a Contract
1 In long-distance commercial negotiations it is frequent that one party summarises the
‘agreed terms’ (1) (or communicates formal acceptance of the terms of the offer) (2) after
a telephone or videoconference or, for example, during the flight home after a person-to-
person meeting, “for purposes of evidence and certainty” (3) . If the agreed terms include
an arbitration or choice of court clause, the written documentation may even be
necessary to meet written form requirements. (4) Art. 2.1.12 applies after contract
conclusion (5) (and provides the correlating rule to Art. 2.1.11 (2) (6) which applies before
contract conclusion). It copes with changes as compared to the agreed (previously known)
content. By permitting non-material changes (which are communicated in a writing of
confirmation within a ‘reasonable time’ after contract conclusion) to become part of the
contract unless the recipient objects ‘without undue delay’ (7) (i.e. immediately) in
whatever form (Art. 1.2), as long as it reaches the addressee (→ Art. 1.10 (2) and (3)), Art.
2.1.12 provides an exception both (i) to the principle that any contract amendment
requires an agreement (→ Art. 1.3 (2) and 2.1.6 (1)) (8) and (ii) to the principle that ‘silence
does not provide consent’ (9) (→ Art. 2.1.6 no. 4). This exception is limited. If the
interpretation (Art. 4.2-4.3) reveals material changes, the exception does not apply.

B. Burden of Proof and Test

2 (i) The party who wishes to rely on such a ‘written confirmation’ needs to prove (a) the
prior contract conclusion and (b) the reasonable timing of the ‘confirmation’ (‘without
undue delay’). (10) (ii) The party denying the relevance of the ‘confirmation’ must prove
either (a) a timely objection to the changes (whereby, after contract conclusion, a general
objection ‘to the confirmation as a whole’ is likely to be interpreted as an ‘objection to
the changes’) (11) or (b) that the change is material (12) or contrary to good faith (Art. 1.7).
(13) Like under Art. 2.1.11 (2), the test is whether, under the circumstances of the case
(including possibly relevant usages, Art. 1.9), the contract party could expect the other
side to tacitly agree to the proposed (minor) alteration. (14) Except for practices
established among the parties (e.g. through previous contracts, Art. 1.9 (1)), the
incorporation of standard terms or of a choice of court or arbitration clause is likely to
be interpreted (Art. 4.2–4.3) as material. (15) Sneaking in a term previously explicitly
rejected by the other party would be neither immaterial nor in good faith. (16) If the
objecting party can only prove ‘negatively’ that the ‘confirmed’ is not the ‘agreed’ but not
‘positively’ the exact content of the originally agreed, Art. 2.1.4 and 4.8 may help to
determine the contents of the contract. (17)

C. An International Compromise
3 Art. 2.1.12, inspired by § 2-207 (2) UCC, (18) contains a strange rule for many common law
lawyers in that it permits any alteration of contract by silence. (19) It goes less far than
some European legal systems where the silence upon receipt of a commercial
confirmation letter can serve also as evidence for the contract formation. (20)

D. Options
4 The recipient of the written confirmation is not obliged to react, (21) but is well advised
to compare the contents promptly with its notes or memory in order to decide whether it
needs or wishes to object. The application of Art. 2.1.12 can be avoided by insisting on a
certain form (Art. 2.1.13).
Article 2.1.13
(Conclusion of contract dependent on agreement on specific matters or in a particular
form)
Where in the course of negotiations one of the parties insists that the contract is not
concluded until there is agreement on specific matters or in a particular form, no
contract is concluded before agreement is reached on those matters or in that form.

7
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 A. Freedom to Insist on Substantive or Formal Specifics
1 As an expression of party autonomy (Art. 1.1, (1) 1.3) and in correlation with several
national laws, (2) Art. 2.1.13 provides for each party the right to express – unequivocally (3)
– a condition (Art. 5.3.1) to contract conclusion (4) (thereby exercising its freedom from
contract (Art. 1.1)), (5) by requiring either agreement on a given specific (6) substantive
issue or compliance with a certain form. (7) By doing so, each party to a contract
negotiation can avoid the application of the favor contractus principle (8) (→
Introduction no. 8) and related commercial uncertainty. (9)

B. Waiver
2 Commencement of contract execution (which may cause contract conclusion in ordinary
circumstances, Art. 2.1.6 (1), (3)) may be interpreted (pursuant to Art. 4.2– 4.3) as a waiver
of the right to plead earlier conditions to contract conclusion under Art. 2.1.13, (10)
especially when any other interpretation would lead to inconsistent behaviour (Art. 1.8).
(11)
Article 2.1.14 (Contract with terms deliberately left open)
(1) If the parties intend to conclude a contract, the fact that they intentionally leave a
term to be agreed upon in further negotiations or to be determined by one of the parties
or by a third person does not prevent a contract from coming into existence.
(2) The existence of the contract is not affected by the fact that subsequently
(a) the parties reach no agreement on the term;
(b) the party who is to determine the term does not do so; or
(c) the third person does not determine the term, provided that there is an alternative
means of rendering the term definite that is reasonable in the circumstances, having
regard to the intention of the parties.

A. Possible Contract Conclusion Despite a Term Deliberately Left Open

1 In international practice, it happens that the parties reach an agreement except for one
issue which is deliberately left for the future (either as ‘agreement to agree’ (1) under
para. 1 1st alternative; or as an agreement with terms left for future determination
pursuant to para. 1 2nd or 3rd alternative). For example, in a long-term contract (Art. 1.11
3rd hyphen), the open issue may be even the price after the passage of an initial period
of time for which a price has been agreed (2) or an agreement on limitation of liability,
unresolved objections raised to standard terms, or an agreement to negotiate to
overcome a battle of forms (→ Art. 2.1.22 no. 4). If, in such cases, the parties start to
perform (3) the agreed parts or one party starts to invest in the premise of the agreement,
(4) there may be contract conclusion pursuant to Art. 2.1.14 (which was modelled on § 2-
204 (3) UCC (USA)). (5) The underlying idea is to preserve rather than to destroy bargains
(favor contractus). (6)

B. Three Requirements for Contract Conclusion

2 (i) The terms, duly interpreted (Art. 4.1, 4.3 et seq.), need to be ‘sufficiently definite’ (Art.
2.1.1) to (make commercial sense and thereby to) (7) show agreement. (8) (ii) The parties
have to have ‘intention’ to conclude a contract (9) (and not a contract with a suspensive
or resolutive condition, Art. 5.3.1). (10) Possible indications for such intention include (11)
e.g. (a) the nature of the issue which is left open (essential or non-essential items which
by their nature can only be determined at a later stage), (12) (b) commencement of
performance, (c) investments premised by the agreement and/or (d) concrete terms
regarding the determination of the missing term. (iii) Finally, the issue must have been
left open ‘intentionally’ by both or all parties; (13) although it is essential. (14) Silence
alone to cover a secondary issue does not trigger Art. 2.1.14 (but would rather be solved
by supplementation under Art. 4.8 and 5.1.2). (15)

C. Three Contractual Options (Para. 1)

3 Since the 2016 edition, para. 1 offers three options for filling in the missing term. (16)
The missing term can be filled in (i) by an additional agreement – which is usually
negotiated in good faith (Art. 5.1.4 (2)) (17) and sometimes even implied (Art. 5.1.1) (18) –,
(ii) by determination by one of the parties (in practice, offering to the other party to
determine an issue in the future can prove to be a useful tool to build the trust for a
contractual relationship; the other party will be bound to determine the missing issue
with due regard to the general principle of good faith and faith dealing, Art. 1.7; (19) also
argumentum → Art. 5.1.6 on quality and Art. 5.1.7(2) on price); (20) or (iii) by determination
by a third person (21) (para. 1), e.g. an expert or an arbitrator empowered to act ex aequo
et bono (22) (if an institution like a Chamber of Commerce is empowered to nominate the
third person and such person does not accept the task or does not perform, the contract,
duly interpreted (Art. 4.1, 4.3 et seq.) will usually cover that the institution may appoint an
alternate expert). (23)

D. Alternative Means (Para. 2)

8
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 4 If the contractually chosen instrument of negotiation or determination fails for some
reason, para. 2 upholds the contract ‘provided that there is an alternative means of
rendering the contract definite’ which is reasonable in the circumstances, with particular
regard to the intention of the parties (whereby para. 2 operates with the same factors as
Art. 4.1 on interpretation, in a slightly different tune; it is submitted that the
circumstances set forth in Art. 4.3 can also be considered in the context of para. 2). The
alternative means can differ. In practice, a missing term may be (mis-)used by one party
to try to walk away from the contract.
1. Alternative Means contained in the U nidroit Principles
5 Often the Unidroit Principles itself will provide reasonable means. Sections 1 of
Chapters 5 and 6 offer ‘gap-filling’ provisions. (24) This includes in particular (i) Art. 5.1.4
and 5.1.5 on determining the kind of duty, (ii) Art. 5.1.6 on quality determination, (iii) Art.
5.1.7 on price determination, (iv) Art. 6.1.1-6.1.5 on the time of performance, (v) Art. 6.1.6
on the place of performance, (vi) Art. 6.1.7-6.1.10 on payment and currency issues, (vii) Art.
6.1.11 on costs of performance, (viii) Art.6.1.12 and 6.1.13 on imputation of performance,
(ix) Art. 6.1.14-6.1.17 on public permissions.
2. Special Circumstances (Long-term Contracts)
6 In some circumstances such as the conclusion of a long-term contract (Art. 1.11 3d
hyphen), the gap-filling provisions in the Unidroit Principles may not be appropriate
even where they cover the subject-matter of the missing term. (25) For these situations,
the Official Comments refer to the application of ‘Art. 4.8 or 5.1.2’ (26) which may lead to
an appropriate adaptation of the default rule in the Unidroit Principles (27) (e.g. by
changing the reference point for a price determination in Art. 5.1.7 (1) from the time of
contract conclusion to the time of the end of an initial time period for which the price has
been fixed; (28) or by changing the default reference point for the time of performance in
Art. 6.1.1 lit. c which relates to “a reasonable time after the conclusion of the contract” to
a reasonable time after the completion of a prior milestone). (29)
3. Contractual Options
7 The parties are free to create their own system of determination (Art. 1.1, 1.3). When the
open term is commercial (e.g. the determination of a value of a company), it minimises
the risk of a later dispute (and has often proven acceptable to all parties in the cross-
border practice of the author) to provide (i) for an expert solution with a pre-appointed
expert or at least the agreement on an institution appointing the expert upon request of
a party, (30) (ii) the right for any party disagreeing with the outcome to appoint a
counter-expert (who has to work within contractually pre-agreed time frames), (iii) an
understanding that the initial result stands (or that the mathematical figure in the
middle of the figures of the two experts) applies unless the second expert comes forward
with a result deviating by more than x %, and (iv) that, in such case, a third expert will be
appointed by a pre-determined institute, who has to determine the binding result within
the frame provided by the two previous expert opinions.
4. Arbitration
8 If the dispute about a missing term arises in arbitration, an arbitrator will have to
balance between the two extremes with due regard to the circumstances of the case: on
the one hand (which is prefered by the favor contractus approach of the Unidroit
Principles), it may be possible to fill the gap, e.g. with Art. 4.8,
5.1.1-5.1.2, 5.1.6 and 5.1.7, (31) especially if the party trying to opt out of the contract acts
in bad faith (cf. Art. 1.7) and/or inconsistently (Art. 1.8). On the other extreme, the contract
interpretation might reveal a resolutive condition, Art. 5.3.1; (32) yet, absent clear
language or circumstances of the case, this should be the exception. It has even been
argued that the burden of proof is on the party “seeking to assert that … there is no
contract”. (33)
Article 2.1.15 (Negotiations in bad faith)
(1) A party is free to negotiate and is not liable for failure to reach an agreement.
(2) However, a party who negotiates or breaks off negotiations in bad faith is liable for
the losses caused to the other party.
(3) It is bad faith, in particular, for a party to enter into or continue negotiations when
intending not to reach an agreement with the other party.

A. Avoiding a Cultural Clash, Functions of Art. 2.1.15

1 Art. 2.1.15 dwells on another aspect of the friction between freedom of contract (Art. 1.1)
and good faith and fair dealing (Art. 7). (1) Disputes over a ‘broken deal’ are a common
place in business. They sometimes come unexpected if the parties derive from different
cultural backgrounds with a different basic understanding of negotiations. (2) One
extreme is found in England (where there is virtually no precontractual liability), (3) the
other extreme may be found in Germany where a party might walk away from a deal to a
competing offeror by pricing in the ‘reliance’ damage or ‘negative’ interest, e.g. of

9
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 attorney fees to be compensated to the other party after the initial deal breaks. (4) Art.
2.1.15 provides a compromise (5) by underlining the right not to agree in para. 1 (Art. 1.1),
(6) but sanctioning breaking off negotiations in ‘bad faith’ (para. 2–3). (7) This scheme
manages expectations and is thereby useful; regardless of the doctrinal issue that Art.
2.1.15 reaches out to the phase before contract conclusion. (8) Systematically, Art. 2.1.15
becomes an expression of the good faith principle in Art. 1.7 (9) and 1.8, and it is
discussed if it is even equally mandatory, at least unlesssomething different is agreed by
the parties. (10) It can be understood as a ‘functional approach to good faith’: “On the one
hand, negotiating parties are presumed to be honest when they negotiate, and to disclose
any relevant information to the other party. […] On the other hand, the parties are asked to
consider and respect the other party’s legitimate interest and to behave consistently.” (11)
The application of Art. 2.1.15 will be fact driven. It will apply if the party breaking off the
negotiations of a contract (which it did not intend to conclude (12) ) caused the other
party by its conduct and statements (13) (duly interpreted pursuant to Art. 4.2, 4.3) to
legitimately believe, based on objective facts, (14) that a contract should be concluded
(mistakes, negligent misrepresentation and non-disclosure will usually not constitute bad
faith (15) ), while it has no legitimate reason (16) to break off the negotiations (17) and did
not reserve its full freedom (→ no. 4 below).
1a Art. 2.1.15 can serve its purpose when the Unidroit Principles are chosen as the
applicable legal regime for a cross-border Letter of Intent (18) (from a civil law
perspective this is much smarter than the choice of English law if one seeks to protect
investments into a project). As Art. 2.1.15 is an expression of the general good faith-
principle in Art. 1.7, there is no reason not to apply Art. 2.1.15 if the frustrated costs are
due to the violation of a duty to negotiate under an agreement pursuant to Art. 2.1.13 or
2.1.14. (19) Subject to the limits under Art. 7.1.6 (20) or applicable mandatory law (Art. 1.4),
the parties might agree in advance in a Memorandum of Understanding on a contractual
regime (Art. 1.1, 1.3) which grants more freedom to the negotiation and defines certain
walk-away scenarios as not being ‘bad faith’ (21) (clarity on these issues is still better
than any cultural clash due to different concepts). In long-term contract scenarios (→ Art.
1.11 3d hyphen), – possibly concluded under the Unidroit Principles – with regard to a
project agreement that still needs to be negotiated, breaking off the negotiation may
constitute a straightforward violation of such agreement giving rise to a contractual claim
for damages, (22) possibly limited to the reliance interest. (23)

B. Bad Faith Examples

2 The term ‘negotiations’ relates to “the gradual process of contract formation”, in
cluding the parties’ behaviour even before the issuance of any offer. (24) Bad faith needs
to be interpreted as the coin flip of ‘good faith’ (Art. 1.7) (25) and is not reduced to
“manifestly dishonest or vexatious acts or omissions”. (26) Para. 3 provides two self-
explanatory examples which have in common that the behaviour of one party
deliberately causes the other party to engage in vain in more expenses (‘sham
negotiations’; (27) breaking off negotiations after ‘justified reliance’ (28) whereby, as a
rule of thumb, the higher the degree of resolved issues and the probability to reach an
agreement, the more justified is the reliance). (29) Other examples include intentional
misleading of the other side by misrepresenting or not disclosing facts. (30) Depending
on the circumstances of the case, additional claims may exist under Art. 3.2.1 et seq.
(grounds for avoidance), in particular Art. 3.2.5 (fraud) in connection with Art. 3.2.16. (31)

C. Damage Calculation, Burden of Proof

3 The retrievable damage (32) is usually limited to the ‘reliance’ or ‘negative’ interest
which excludes lost profit from the frustrated contract project, (33) while lost profits from
another contract project “that the claimant could have demonstrably concluded with a
third person if he had not relied on the negotiations already begun” may by claimed. (34)
Exceptionally, lost profit from the frustrated contract (i.e. full compensation for breach of
contract) might be claimed if the parties had previously contractually agreed on an
explicitly stipulated duty ‘to negotiate in good faith’ (35) (i.e. a duty to negotiate or re-
negotiate “with an intent to conclude an agreement, but not that an agreement must be
reached”). (36) Examples may be found in (i) a ‘Letter of Intent’ or ‘Memorandum of
Understanding’ (dependant on the wording), or (ii) long-term contracts (37) (Art. 1.11 3rd
hyphen). In international trade for clients from civil law jurisdictions, such agreement to
negotiate in good faith can often be observed in practice. The burden of proof is upon
the party alleging bad faith. (38) However, “Once it has been shown that the claimant had
a legitimate reason to rely on the formation of the contract, the defendant will need
exceptional circumstances to prove that breaking off negotiations was nevertheless
legitimate”. (39)

D. Options
4 Communication matters. By clearly communicating and documenting the intention to
negotiate with several interested parties, or that a party is not yet fully decided whether
to conclude a contract, reliance on the other party and the risk of exposure for breaking
off negotiations in bad faith can be avoided.
Article 2.1.16 (Duty of confidentiality)

10
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 Where information is given as confidential by one party in the course of negotiations,
the other party is under a duty not to disclose that information or to use it improperly
for its own purposes, whether or not a contract is subsequently concluded. Where
appropriate, the remedy for breach of that duty may include compensation based on the
benefit received by the other party.

A. Implied or Express Duty of Confidentiality (Sentence 1)

1 As a further expression of the good faith principle (Art. 1.7) within the Unidroit Principles
(1) (and in line with national laws around the globe providing for other doctrinal
foundations), (2) sentence 1 states a self-explanatory duty of confidentiality of any
information provided (expressly or impliedly) (3) ‘as confidential’ during the
negotiations. Interpretation of the statements and conduct of the person providing the
information pursuant to Art. 4.2-4.3 (e.g. Art. 4.3 (c)) will usually lead to a straightforward
understanding both of the term ‘confidential’ (e.g. that publicly available information is
not confidential) (4) and whether the recipient ought to understand that it was provided
‘as confidential’. (5) Express confidentiality agreements (or clauses) often provide further
details, e.g. to determine the group of persons who may access the information
(subjected often themselves to similar duties of confidentiality). (6) The wording has been
described as “a mixture of the common law idea of liability in equity for breach of
confidence and the civilian idea of culpa in contrahendo.” (7) A breach consists either of a
(negligent or intentional) (8) disclosure (i.e. all forms of deliberate or negligent
communication of the information by any means) (9) or of improper use of the
information for one’s own purposes which needs to be assessed with regard to the
circumstances; (10) with an exception under exceptional circumstances which may be
public interest or a “disclosure in the interest of justice” in legal proceedings, especially
against the other party. (11)

B. Remedies (Sentence 2)
2 Upon violation of a special confidentiality agreement causing (12) damage, the
compensation can include lost profit (Art. 7.4.2 (1) sentence 2, as once enforced by the
author in an arbitration under the Unidroit Principles-regime) (13) or the benefit
generated by the breaching party (14) by selling the confidential information. (15) The
reference to ‘where appropriate’ grants discretion to duly regard the circumstances of the
case (e.g. the relative situation of the parties or competitors, (16) or the timeline). (17)
Article 2.1.17 (Merger clauses)
A contract in writing which contains a clause indicating that the writing completely
embodies the terms on which the parties have agreed cannot be contradicted or
supplemented by evidence of prior statements or agreements. However, such
statements or agreements may be used to interpret the writing.

A. Another Contribution to Cross Cultural Understanding

1 Merger clauses (or ‘entire agreement clauses’, ‘integration clauses’) (1) are common
practice in the common law world (2) and are increasingly imposed also in civil law
contexts where lawyers grow up with an understanding that prior versions of a contract
may become important for later disputes about its interpretation. To bridge between
cultures, it is helpful that the Unidroit Principles address the issue with a compromise.
By a merger clause, the parties “protect the ‘integrity of the writing’”. (3) Prior statements
or agreements shall not ‘contradict’ or ‘supplement’ the contents of the contract (4)
(sentence 1), but, in line with Art. 4.3 (a), (5) prior statements or agreements may be used
‘to interpret’ the contract (sentence 2) (6) unless otherwise agreed in the merger clause
(Art. 1.5). (7) They can be helpful to ascertain in more detail an obligation contained in the
contract, but, in light of the clear language of sentence 1, sentence 2 does not give room
to go beyond the plain meaning of the words of the contract. (8)

B. Limits
2 The merger clause is limited to contracts ‘in writing’ (Art. 1.11). It is restricted to
‘evidence of prior statements or agreements’ (whereby subsequent changes of the agreed
terms are permissible, Art. 1.2, but may be subject to a written form requirement, Art.
2.1.18). (9) Unless explicitly provided otherwise, a merger clause does not exclude the
application of trade usages established between the parties (Art. 1.9 and 4.3. (b) (f)). (10) A
merger clause cannot hinder to bring forward arguments based on grounds for avoidance
(Art. 3.2.1 et seq.). (11) If a party did rely on a prior statement (as it happens in
international trade across cultures) and is later confronted with a merger clause in
standard contract terms, it can only try to rely on Art. 1.8 arguing that reliance of the
other party on the merger clause would constitute inconsistent behaviour. (12) Inversely,
the more time parties have spent on negotiating a merger clause, the less there is a risk
of such an argument. (13)
Article 2.1.18 (Modification in a particular form)
A contract in writing which contains a clause requiring any modification or termination
by agreement to be in a particular form may not be otherwise modified or terminated.

11
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 However, a party may be precluded by its conduct from asserting such a clause to the
extent that the other party has reasonably acted in reliance on that conduct.

A. ‘No Oral Modifications’ Clauses

1 Sentence 1 transfers the right to agree on a certain form (Art. 2.1.13) for modifications
after contract conclusion. (1) Such protection of the ‘integrity of the writing’ (2) is
standard in international construction contracts (which often provide for ‘change request’
procedures; → Art. 4.3 no. 4 at C.). It enables a party, in particular of a long-term contract
(Art. 1.11 3rd hyphen), to rely on the agreed terms even if for some time it did tolerate a
deviation. (3) The purpose of such clause is to either prevent fraudulent or false
allegations (4) or, in practice often more relevant within large groups of companies, to
avoid that technical or operational personal without legal training creates an unintended
legal effect. It is also useful in other contractual scenarios. Similar to Art. 29 (2) CISG, (5)
Art. 2.1.18 provides for the possibility of requiring, in writing (→ Art. 1.11 5th hyphen), (6) a
writing (7) (or any other form like a tighter ‘notarial authentication’ or a more lenient
‘confirmation in writing’, Art. 2.1.12) (8) as a condition for a valid contract modification or
termination. Like ‘merger clauses’ (Art. 2.1.17), a ‘No Oral Modification’-Clause serves the
goal of legal certainty (9) and documentation which is particularly important in cross-
cultural contexts (where proof by witnesses in case of a dispute is costly and risky,
witnesses may not be available or become shy by relating to communication or language
problems). It is therefore important to enforce and not to undermine such a clause. (10)

B. Limits
2 In the required form, the parties can change their agreement (Art. 1.5). Further, sentence
2 provides for a specific application of the prohibition of inconsistent behaviour in Art.
1.8. (11) In narrowly construed (12) exceptions under sentence 2 (which is an expression of
Art. 1.8), (13) a party may cause the other side to reasonably rely on an oral
representation (14) (e.g. when parties cooperate on a daily basis in construction and
deviate daily from the agreed procedure. (15) While this often is a nightmare for legal risk
managers, the art is e.g. to avoid that reliance of the other side on the action on the
construction site can reasonably be invoked under the circumstances).

C. Options
3 By agreeing in addition that also the modification of the ‘no oral modification’clause
requires a writing, i.e. a ‘double’ or ‘qualified’ ‘no oral modification’clause, reasonable
reliance (sentence 2) on conduct deviating from the contract might be more difficult to
establish. (16)
Article 2.1.19 (Contracting under standard terms)
(1) Where one party or both parties use standard terms in concluding a contract, the
general rules on formation apply, subject to Articles 2.1.20–2.1.22.
(2) Standard terms are provisions which are prepared in advance for general and
repeated use by one party and which are actually used without negotiation with the
other party.

A. A Straightforward Regime on Standard Terms in Four Articles

1 With Art. 2.1.19-2.1.22, the Unidroit Principles provide a straightforward and
uncomplicated regime for standard terms (1) which are part of our global commercial
life. (2) The Unidroit regime copes with five standard issues: definition, incorporation,
surprising terms, priority of individual terms, battle of forms. Otherwise, it provides no
special regime for abusive or unconscionable standard terms. (3) In this respect the
general principles on inconsistent behaviour (Art. 1.8), the principles covering certain
extreme case scenarios may step in, e.g. on unreasonable exemption clauses such as an
unreasonable limitation of liability clause (Art. 7.1.6), on gross disparity (Art. 3.2.7, 3.1.4) or
generally on grounds for avoidance (Art. 3.2.1 et seq.) (4) suffice, supplemented by
multiple rules calling for respecting the limits of good faith and fair dealing (→ Art. 1.7 no.
4). With respect to interpretation, the general rules in Chapter 4 apply (including the
general contra proferentem rule in Art. 4.6), (5) whereby, with respect to the application
of Art. 4.1 (2) (and absent a common intention in the sense of Art. 4.1 (1) which could then
easily amount to an individually negotiated term, Art. 2.1.21) (6) the reasonable
expectation of the relevant user would serve as the yardstick for the interpretation so
that the interpretation would be the same in all transactions for which the standard
terms are intended. (7) For cross-border B2B contracts, there is no need for a more
sophisticated level of protection of the adhering party as compared to many national
laws which have been drafted foremost to protect consumers. (8) Moreover, to the extent
that mandatory law is applicable (Art. 1.4), it can impose additional requirements to be
respected by standard terms (→ Art. 1.4 no. 4). (9)

B. Definition (Para. 2)
2 Para. 2 contains a self-explanatory three-prong definition of standard terms: (i)
prepared in advance; (10) (ii) for general and repeated use by one party (11) (which

12
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 requires the intention of the actual (12) ‘user of the terms’ to use them repeatedly, such
intention may often be inferred – Art. 4.2(2) – from the presentation of the terms, e.g. in a
pre-printed form) (13) and (iii) which are actually used ‘without negotiation’. (14) The
length of the terms (one or many provisions) is irrelevant. (15) In light of the international
character of the Unidroit Principles (Art. 1.6), the possibility to ‘negotiate’ different terms
with the other party (e.g. on limitation of liability) and thereby to reach an ‘individual
agreement’ should be understood in a broad sense considering the freedom of contract
(Art. 1.1–1.2) and integrating all realistic means of communication including conduct (Art.
1.2, 4.2–4.3). If such ‘individual agreement’ is reached, Art. 2.1.19 et seq. are inapplicable
and it would also be inconsistent, Art. 1.8, to then still try to rely on Art. 2.1.20. By
definition, negotiation of an issue avoids ‘surprise’. Under the frame of the Unidroit
Principles, it is therefore much easier to reach an ‘individual agreement’ as compared to
reaching such agreement under some national laws. (16)

C. Incorporation (Para. 1)
3 Generally, as general rules of formation apply, (17) the ‘user of standard terms’ can only
rely on such terms if it has received an acceptance declaration (Art. 2.1.1, 2.1.6) from ‘the
other (adhering) party’ (18) to an offer which includes the standard terms. (19) This is a
straightforward requirement (and a compromise between different concepts of
incorporation), (20) even if it requires some management of the contract conclusion
process. Pursuant to the Official Comments, the ‘user of standard terms’ has the choice,
with regard to the circumstances, (i) to integrate the terms into the (written) contract, (21)
(ii) to make an express reference to the standard terms in the offer (22) (which meets the
reasonableness test below), or (iii) to incorporate the standard terms impliedly by usage
or practice, (23) either between the parties (Art. 1.9 (1)) or by usage as observed in a
particular trade (Art. 1.9 (2)). (24) It is not enough to argue that the other party ‘ought to
have known’ about the existence of standard terms. (25) Rather, as a reflection of the
good faith principle (Art. 1.8), (26) the ‘user of standard terms’ will have to establish that
it took “reasonable steps to bring them to the attention of the other party”. (27)
4 The circumstances of relevance (to be interpreted pursuant to Art. 4.2-4.3.3) are
multiple and include e.g. (i) clear and timely communication about the terms, (28)
(ii) specific and clear language (of the contract or otherwise agreed or accepted), (29)
(iii) accessibility or availability of the text (30) (there remain risks of meeting the
‘reasonable-test’ in case of a mere ‘general’ reference to a website as opposed to a
‘deep’ reference to the standard terms), (31) and (iv) the circumstances of
communication. If this test is met, the adhering party is bound by the standard terms
“irrespective of whether it actually knows their contents.” (32) Thereby, the standard for
incorporation of standard terms into an international contract governed by the Unidroit
Principles is more relaxed and adequate for its cross-border business-tobusiness (B2B)
purpose than the consumer-oriented domestic law on standard terms in many nations; it
has been described as part of the “general part of transnational contract law”. (33) In the
author’s German practice, this comparative advantage of the Unidroit Principles is one of
the reasons to always choose the Unidroit Principles instead of its own national (German)
law (which is less business-orientpréparatoires that “parties from developing countries
should not be bound by standard terms which, though in common usage in the particular
trade, are not sufficiently known in their countries”).
ed (34) ) when contracting with business clients from other jurisdictions (→ Art. 1.4 no. 4).
In a negotiated framework contract for a long-term business relationship the parties may
wish to explicitly discard the effect of any references to standard terms in the course of
future communications, often automatically triggered by preintegrated standard text of
large business units, e.g. for offers provided electronically and thereby automatically
transferred together with the individualized text (→ Art. 2.1.1 no. 4).
Article 2.1.20 (Surprising terms)
(1) No term contained in standard terms which is of such a character that the other party
could not reasonably have expected it, is effective unless it has been expressly
accepted by that party.
(2) In determining whether a term is of such a character regard shall be had to its
content, language and presentation.

A. Safeguard of Basic Fairness

1 Art. 2.1.20 can be qualified as yet another specific expression of the general principle of
good faith and fair dealing (→ Art. 1.7). As the ‘flip-side’ to keeping reasonably low the
efforts of the ‘user of standard terms’ of integrating them as binding (Art. 2.1.19 (1))
irrespective whether the other party has read them, Art. 2.1.20 strives to prevent the ‘user
of standard terms’ to take an unfair advantage of the other party by imposing terms “that
the other party could not reasonably have expected”. (1) One should not mislead its
contract partner. (2) To take an advantage is fair, however merely, if the term has been
‘expressly accepted’ by the other party. (3)

B. Test

13
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 2 Terms are surprising if, “a reasonable person of the same kind [e.g. professional skill
and experience (4) ] as the adhering party would not have expected it in the type of
standard terms involved”. (5) Typical fact patterns include inconsistencies with
negotiations, advertisements, (6) agreed terms (e.g. a heavy deviation from the ‘visible’
terms) (7) or the purpose of the contract. (8) Particularly burdensome (9) or bizarre (10)
conditions may also be surprising, while terms “commonly found in standard terms used
in the trade sector concerned” (11) or by the adhering side itself are not ‘surprising’.
Avoiding such fact patterns contributes to transparency. (12) Especially when non-native
English speakers are involved, according to the Official Comments, “it cannot be
excluded that some of its terms, although fairly clear in themselves, will turn out to be
surprising for the adhering party who could not reasonably have been expected fully to
appreciate all their implication.” (13) Abbreviations should be defined or avoided unless
they constitute usages and practices (→ Art. 1.9). Typographical minuscule print may also
be surprising, depending on the “professional skill and experience of persons of the same
kind as the adhering party.” (14)
3 The default rules of the Unidroit Principles and its underlying principles (including their
openness to usages and practice, → Art. 1.9) provide a neutral reference point (Leitbild)
(15) to an arbitrator or judge applying Art. 2.1.20. Thereby the perspective of Art. 2.1.20 is
more open-minded than the perspective of any consumeroriented national law (16) (→
Art. 1.4 no. 4). The dispute resolution regime will decide to what extent mandatory
national (or international or transnational, e.g. European) (17) law will require increased
standards of judicial review of contractual standard terms (→ Art. 1.4 no. 1, 3).
Article 2.1.21 (Conflict between standard terms and non-standard terms)
In case of conflict between a standard term and a term which is not a standard term the
latter prevails.
Priority of the Individual Term
1 In line with many laws around the globe, (1) common sense (2) and a rebuttable
presumption under the CISG (3) , individual terms trump standard terms in case of
conflict (4) since the individually agreed terms are more likely to reflect the intention of
the parties, (5) even if they are orally (6) or impliedly agreed (Art. 2.1.1, 2.1.6). (7) In the
same vein, in times of EDI with automated inclusion of standard terms, individually
agreed framework contracts increasingly contain specific blocking clauses against
standard terms to which either party may later refer automatically in specific orders (→
Art. 2.1.1 no. 4).
Article 2.1.22 (Battle of forms)
Where both parties use standard terms and reach agreement except on those terms, a
contract is concluded on the basis of the agreed terms and of any standard terms which
are common in substance unless one party clearly indicates in advance, or later and
without undue delay informs the other party, that it does not intend to be bound by such
a contract.

A. A Favor Contractus Approach to Competing Standard Terms

1 Art. 2.1.22 constitutes an adaptation of Art. 2.1.11 (modified acceptance) to competing
standard terms which upholds the contract (favor contractus) (1) otherwise agreed
individually unless one party objects in time or promptly. Again, the Unidroit Principles
provide a reasonable compromise between different approaches, avoiding the common
law ‘last-shot’-doctrine (where the terms sent out last may prevail), (2) the Dutch first
shot-doctrine (3) or a ‘total knock out’ (where none of the standard terms apply). (4)
Rather, as one might expect from a helicopter good faith perspective favouring
international business, the common substance of the competing standard terms, if any
(after due interpretation, (5) Art. 4.2-4.3), applies. (6) Conflicting clauses are ‘knocked
out’ (7) if otherwise the ‘deal is on’. (8) The parties share the risk that some issues are left
open. (9) By timely objection and clear communication, (10) each party can effectively
switch to the ‘last-shot’-doctrine of Art. 2.1.1 and 2.1.6 (11) and/or avoid contract
conclusion based on standard terms of the other party (12) (Art. 1.5). Otherwise, each
party is bound (13) (in line with Art. 2.1.1 and 1.8). (14)

B. Limits
2 Clauses on issues addressed only by one of the parties are not ‘in battle’; Art. 2.1.22 does
not apply to such clauses (15) (which might be accepted by performance, Art. 2.1.11 and
Art. 2.1.6 (3)).

C. Filling the Gaps

3 Absent an explicit agreement (salvatorische Klausel), revealed gaps should be filled by
interpretation (Art. 4.2-4.3) of the agreed terms, usages (Art. 1.9) and with the underlying
principles of the Unidroit Principles (Art. 1.6). (16)

D. Options in View of Paramount Practical Importance of the Issue

4 Both market power and the philosophies of legal departments with regard to the use of

14
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 standard terms differ. In many scenarios, it is sensible to have such terms for the mere
reason of being able to rebut offers made under standard terms by the potential
contract partner and to trigger readiness to negotiate individual terms. Depending on the
perspective of the supplier or buyer, different issues are of prime interest. In light of the
different national approaches (and mindsets of the acting persons), contract risk
management requires to treat the matter of possible conflicts of standard terms with
utmost attention. A simple ‘defense-clause’ objecting to the contract partner’s standard
terms does not suffice. (17) Such defense should be clearly communicated. Scenarios
from practice: (i) The supplier makes an offer under its standard terms including a
reference to the Unidroit Principles (Introduction → no. 9a-b). The buyer places an order,
e.g. through an EDI system, in which it accepts the offer but rejects the standard terms of
the supplier. It references to its own standard terms, or even attaches them, with a choice
of its national law clause and excludes the CISG. (18) The competent business unit of
supplier starts immediately performing the order (i.e. “immediately after receiving an
acceptance on the terms of the offeree” (19) ). The counter-offer of the buyer and its
standard terms may have been accepted by conduct (20) (→ Art. 2.1.6 sentence 1, if
applicable under the circumstances (21) ), as duly interpreted under the circumstances
(Art. 4.2, 4.3). (22) (ii) Alternatively, the parties may agree (a) to start performance with
regard to time constraints of a long-term project, (b) to leave the conflict between their
standard terms deliberately open for now (→ Art. 2.1.14), and (c) to negotiate the open
issues (or a list of agreed issues) in good faith within a certain time frame. (23) In such
cases, default rules apply under the applicable legal regime, e.g. the CISG if the contract
relates to the international sales of goods (as an exclusion of the CISG in the standard
terms has not (yet) any effect).
5 It is thus important to determine at the beginning of a contract negotiation which
(default) rules of law apply in case of conflict of standard terms, especially if the dispute
resolution and choice of the Unidroit Principles (or choice of a national law) clause – or a
clause excluding the CISG under its Art. 6 – are contained in the standard terms on which
there is no agreement. The determination must be made with regard to applicable
treaties on uniform law (like the CISG) and the potentially applicable private
international law rules. In this scenario, the private international law at the seat of the
contract partner may be relevant. (24) For international sales contracts, often the CISG
will apply (→ Introduction no. 9b) for which its Advisory Council has issued, with due
regard to Art. 2.1.22 of the Unidroit Principles, the opinion to apply the knock-out-rule.
(25)
6 Long-Term contracts: For a practical need to object to automated references to
standard terms in the course of future contract conclusions under the ambit of a
framework agreement see → Art. 2.1.1 no. 4.

Section 2 Authority of Agents

Article 2.2.1 (Scope of the Section)
(1) This Section governs the authority of a person (“the agent”) to affect the legal
relations of another person (“the principal”) by or with respect to a contract with a third
party, whether the agent acts in its own name or in that of the principal.
(2) It governs only the relations between the principal or the agent on the one hand, and
the third party on the other.
(3) It does not govern an agent’s authority conferred by law or the authority of an agent
appointed by a public or judicial authority.

UNIDROIT Principles of International Commercial Contracts: An Article-by-Article

Commentary (Second Edition)
A. Only Agency in the Contract Formation Process
1 Art. 2.2.1 defines the scope of Section 2, i.e. all aspects of agency that are relevant for a
contractual relationship with a third party. (1) Based to a large extent on the 1983
(Geneva) Unidroit Convention on Agency in the International Sale of Goods, (2) pursuant
to para. 1 Art. 2.2.1–2.2.10 restate principles for the frequent cases (3) in which cross-
border contract formation (and other steps in the life of a contract) (4) includes activities
of ‘agents’, (5) acting with express, implied (Art. 2.2.2), apparent (Art. 2.2.5) or without
authority (Art. 2.2.6., 2.2.9), including sub-agency (Art. 2.2.8), but except for ‘indirect’ and
‘undisclosed’ agencies. (6) The rules on agency apply regardless of the traditional civil
law criterion whether the agent acts ‘in its own name or in that of the principal’. (7) Art.
2.2.1-2.2.10 do also not regulate (i), according to para. 2, the internal contractual
relationship between principal and agent which is subjected to the otherwise applicable
law (8) (including e.g. in the EU member states national law based on the Council
Directive 86/653/EEC on the coordination of laws of the Member States relating to self-
employed agents) (9) or contract (10) (with the exception that Art. 2.2.2 does cover the
granting of authority from the principal to the agent) (11) or (ii) intermediaries which lack
authority to contribute to a contract conclusion of another person. (12) Art. 2.2.1 et seq.
only relate to contracts, not to torts (deceit, assault, intimidation). (13) Regarding para. 3,
as read together with the Official Comments, (14) the section on agency does not interfere

15
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 with an agent’s authority conferred by statute (15) (e.g. negotiorum gestio, authority of a
managing director of a company conferred by the applicable – possibly even mandatory
(16) (→ Art. 1.4) – company law) or court order, (17) while Art. 2.2.1 et seq. may be applied if
they do not conflict with the “special rules on the authority of organs, officers or partners”
(18) (e.g. apparent authority under Art. 2.2.5 (2) (19) ).
B. Large Concept of Agency
2 The Unidroit Principles regime on agency constitutes a compromise between civil and
common law concepts (20) and must be interpreted autonomously (Art. 1.6(1)). (21) The
concept is broad: It includes, inter alia, (i) agents acting in their own name (‘commission
agency’, Art. 2.2.3(2)) (22) and (ii) ‘massagers’ and authorised ‘recipients of messages’ (23)
as, for their task, they are also endowed with ‘authority … to affect the legal relations of
another person’ (para. 1). (24)
Article 2.2.2 (Establishment and scope of the authority of the agent)
(1) The principal’s grant of authority to an agent may be express or implied.
(2) The agent has authority to perform all acts necessary in the circumstances to achieve
the purposes for which the authority was granted.
A. Authority Granted by the Principal (Para. 1)
1 An agent’s express or implied (actual) authority stems from the principal’s declarations
(e.g. in a written ‘power of attorney’ irrespective of the applicable law to such ‘PoA’) (1) or
conduct, “or a combination of the two” (2) (e.g. oral communication by the principal
jointly to the third party and the agent). (3) It requires no acceptance (4) and no form, (5)
subject to local mandatory law for special authority for certain formal acts, (6) e.g. in
some jurisdictions to certain real estate or company law related matters (Art. 1.4). In line
with most national laws, the grant of authority is distinct and thereby “abstract from an
underlying contractual relationship” between the principal and the agent (principle of
abstraction). (7)
B. Incidental Authority (Para. 2)
2 ‘Incidental authority’ under para. 2 includes all acts ‘necessary in the circumstances’ to
achieve the purpose. (8) Such ‘implied actual authority’ is also defined by interpretation
of the principal’s declaration or conduct (Art. 4.2-4.3 referring to ‘the meaning that a
reasonable person of the same kind as the other party would give to it in the same
circumstances’, Art. 4.2(1)). For example, it may relate to agreements on details of the
purported contract (9) and may be derived from a certain position (10) (with a floating line
of demarcation to ‘apparent authority’ (→ Art. 2.2.5 (2)) if the agent exceeds his powers)
(11) and/or usages (12) (Art. 1.9). The agent will have to exercise its authority in good faith
(Art. 1.7). (13) Art. 2.2.8 covers the special issue of implied authority for sub-agency. (14)
Article 2.2.3 (Agency disclosed)
(1) Where an agent acts within the scope of its authority and the third party knew or
ought to have known that the agent was acting as an agent, the acts of the agent shall
directly affect the legal relations between the principal and the third party and no legal
relation is created between the agent and the third party.
(2) However, the acts of the agent shall affect only the relations between the agent and
the third party, where the agent with the consent of the principal undertakes to become
the party to the contract.
A. ‘Actual Disclosed Agency’
1 Based on an ingenious compromise between civil and common law, (1) para. 1 describes
in straightforward words the principle of actual disclosed agency, supposing that the
agent acts within his scope of authority (otherwise Art. 2.2.5 (2) or Art. 2.2.6 will apply). (2)
It includes circumstances where the third party ‘ought to have known’ (after
interpretation of conduct of the agent and/or the principal pursuant to Art. 4.2-4.3) (3)
that the agent acts for a third party. (4)
B. ‘Classical’ Consequences (5)
2 (i) The intermediary is not personally liable (6) – it ‘drops out’ of the contractual
relationship (7) –, unless otherwise agreed (e.g. joint liability cases, (8) Art. 1.5). (ii) The
third party cannot use any rights to set-off against the agent (Art. 8.1 et seq.).
(iii) The third party bears the insolvency risk of the principal (which it may not even know
if it is an ‘ought to have known’-case). (iv) Payment to the agent may not discharge the
third party’s liabilities to the principal.
C. ‘Indirect’ or ‘Commission Agency’ (9)
3 Para. 2 includes most prominently contract conclusions where the principal wishes 3 to
remain anonymous (10) (‘unidentified or unnamed principal’) (11) while agency as such is
disclosed or ‘ought to be known’ (otherwise Art. 2.2.4 applies). (12)
Article 2.2.4 (Agency undisclosed)

16
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 (1) Where an agent acts within the scope of its authority and the third party neither knew
nor ought to have known that the agent was acting as an agent, the acts of the agent
shall affect only the relations between the agent and the third party.
(2) However, where such an agent, when contracting with the third party on behalf of a
business, represents itself to be the owner of that business, the third party, upon
discovery of the real owner of the business, may exercise also against the latter the
rights it has against the agent.
A. Another Compromise
1 Art. 2.2.4 covers the opposite scenario of Art. 2.2.3 (‘no knowledge’ of the third party
about the agency, ‘no ‘ought to have known’’). (1) It also supposes that the agent respects
its scope of authority (otherwise Art. 2.2.6 applies). It provides an international bridge
between common law (with a larger ‘doctrine of the undisclosed principle’) and other
(civil law) solutions (like ‘indirect agency’, ‘commission agency’). (2)
B. Only a Relation with the ‘Agent’
2 In the case scenario covered by para. 1, both the third party and the principal ‘must
look to the intermediary’, (3) unless applicable mandatory law (Art. 1.4) provides
additional protection, e.g. in case of insolvency of the ‘agent’. (4) Para. 1 has been
characterised as “a clarifying technical statement” describing a “self-evident”
consequence (5) (of the privity of contract principle) (6) .
C. One Narrow Exception (7) (Para. 2)
3 If an ‘un-disclosing’ agent (first condition), acting with the approval of the principal (8)
(second condition), presents itself to be the owner of an (unincorporated) business (third
condition), and further, if the third party did not have to know about the agency (if so, Art.
2.2.3 would apply) (9) like, for example, in cases of an agent’s action on behalf of a
company (10) (fourth condition), the third party will want to contract with the business
owner, regardless of the identity of the agent. (11) In such narrow circumstances, para. 2
grants a direct right of the third party against the principal (12) (but not vice-versa); (13)
whereby the principal should be entitled to raise the same defenses which the agent
could raise against the third party. (14)
D. Option for the Principal
4 A principal of an undisclosed agent (who may require funding from the principal to
initiate contract conclusion, e.g. for a down payment) may consider an assignment of the
agent’s future claims against the third party (→ Art. 9.1.5). (15) Subject to the scrutiny of
applicable mandatory insolvency law (Art. 1.4) and the circumstances of the case, such an
assignment may avoid or reduce the insolvency risk of the agent (→ Art. 9.1.10 (2)).
Article 2.2.5 (Agent acting without or exceeding its authority)
(1) Where an agent acts without authority or exceeds its authority, its acts do not affect
the legal relations between the principal and the third party.
(2) However, where the principal causes the third party reasonably to believe that the
agent has authority to act on behalf of the principal and that the agent is acting within
the scope of that authority, the principal may not invoke against the third party the lack
of authority of the agent.
A. Principle: No Direct Legal Consequence for the Principal (Para. 1)
1 Subject to possibly applicable mandatory law requiring the publication of restrictions
of authority of certain classes of agent (Art. 1.4), (1) para. 1 restates the general (2)
principle that, without some contribution by its own (B. and C.), a principal is not bound
by the action of an unauthorised agent or an agent exceeding his authority. (3) While
para. 1 constitutes a logical counterpart to Art. 2.2.3 (1) and may thus not be really
necessary, (4) the rule provides clarity, especially as an introduction to para. 2.
B. Exception by the Principal’s Own Action (Para. 2)
2 Based on the general principle of good faith and fair dealing (Art. 1.7) and the
prohibition of inconsistent behaviour (Art. 1.8), (5) para. 2 states an exception. The
exemption of the principal from liability under para. 1 does not apply if the principal’s
conduct, duly interpreted (Art. 4.2-4.3), caused the third party to rely on the agent’s
authority in ‘reasonable belief’ (apparent authority), (6) while the agent (after
interpretation of its instructions) will usually know that it acts without authority
(otherwise it would be covered by implied actual authority and Art. 2.2.5 (2) would not
apply). (7) The principal becomes liable to the third party under the contract, which in
turn protects the agent against claims of the third party (8) (in order to profit from ‘its’
rights under the potential contract, the principal would need to ratify it → Art. 2.2.9 (1)).
(9) Relevant conduct of the principle (or of an authorised agent acting within its powers)
(10) includes most notably express or implicit representations (11) (e.g. the conduct of the
principal, duly interpreted (Art. 4.2-4.3), with regard to ‘usual’ behaviour, (12) such as a
series of prior transactions). (13) In cases of fraud by the agent, the interpretation of the
principal’s behaviour decides about the risk allocation. (14) In contrast, the principal will

17
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 usually not be bound: (i) by any conduct of the unauthorised agent, (15) (ii) by mere
omissions or silence (16) (arguably to be distinguished from circumstances, e.g. the
presence of the principal during the agent’s action, which suggests a ‘duty to speak’ by
way of interpretation (Art. 4.2-4.3) of the principal’s conduct), (iii) in case that the third
party knew or ought to have known (Art. 1.7) that the agent lacks authority. (17)
C. Options
2a A principal who is bound by the apparent authority pursuant to para. 2, has the option
to ratify the agent’s action (Art. 2.2.9 (1)) (18) “to gain a contractual right against the third
party” in exchange to its obligations. (19)
D. Cherry Picking (20) under Overriding Mandatory Non-Contractual Law
3 In many legal systems corporate and/or commercial law requires the registration of
certain management or other positions (which entail certain powers as a matter of
commercial and/or company law) (21) in a commercial register which, as a matter of
mandatory commercial law (→ Art. 1.4), documents the power to act for the company. (22)
As long as the registration continues, a third party may rely on such authority (23) within
the limits set by the mandatory commercial law (24) which “takes[s] precedence over the
general rules on agency”. (25) In more detail: The registration was initiated and thereby
caused by the company. (26) It is thereby close to Art. 2.2.5
(2) situations (27) but it remains distinct because of the different qualification of that
authority, e.g. as a matter of company and not of contract law (Introduction → no. 17).
Issues of distinction can also arise when an ‘agent’ who possesses the principal’s property
sells such property ( bona fide purchase). (28)
Article 2.2.6 (Liability of agent acting without or exceeding its authority)
(1) An agent that acts without authority or exceeds its authority is, failing ratification by
the principal, liable for damages that will place the third party in the same position as
if the agent had acted with authority and not exceeded its authority.
(2) However, the agent is not liable if the third party knew or ought to have known that
the agent had no authority or was exceeding its authority.
A. Strict Liability (Para. 1)
1 Art. 2.2.6 corresponds to Art. 16 of the Geneva Convention (after thorough discussions
including alterations over time). (1) The international compromise (2) in para. 1 provides
for a regime of strict liability of the agent owing full compensation (3) (Art. 7.4.1) to the
third party, but only in damages. (4) Para. 1 covers both initial lack and excess of
authority. (5)
B. Defences (incl. Para. 2)
2 The agent can defend itself (6) (i) by procuring ratification of the principal (Art. 2.2.9),
(ii) with apparent authority (Art. 2.2.5 (2)) (although the agent might remain liable for
costs incurred by the third party to enforce the apparent authority argument against the
principal), (7) (iii) by raising the issue that the third party knew or ought to have known
about its lack of authority (para. 2), (8) i.e. that there is no frustrated reliance. (9) Without
that this usually creates a duty to make inquiries on the third party. (10) In cases of
termination of its authority (e.g. by death, bankruptcy) the agent might receive some
shelter by Art. 2.2.10.
Article 2.2.7 (Conflict of interests)
(1) If a contract concluded by an agent involves the agent in a conflict of interests with
the principal of which the third party knew or ought to have known, the principal may
avoid the contract. The right to avoid is subject to Articles 3.2.9 and 3.2.11 to 3.2.15.
(2) However, the principal may not avoid the contract
(a) if the principal had consented to, or knew or ought to have known of, the agent’s
involvement in the conflict of interests; or
(b) if the agent had disclosed the conflict of interests to the principal and the latter had
not objected within a reasonable time.
A. Coping with a Range of Conflicts (Para. 1 sentence 1)
1 Agency is based on trust and confidence, (1) but conflicts of interest situations do occur
(e.g. direct or indirect self-interest, multiple agencies) (2) and need to be made
transparent (3) (Art. 1.7). Subject to possibly applicable mandatory law (Art. 1.4), (4) Art.
2.2.7 copes only with the impact of conflicts of the agent on the possible contractual
relationship between the third party and the principal. It correlates with Art. 3:205 PECL
(5) and some national laws but is distinct from others. (6) The assessment of a conflict of
interests requires “judicial discretion.” (7) The contract partner – who may be most
affected by an avoidance of contract (8) – receives some protection by the restriction
that para. 1 sentence 1 applies only in case of “the third party’s (potential) awareness of
the conflict of interests. (9)

18
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 B. Distinction to Excess of Authority Cases
2 Krebs has developed a rule of thumb: (10) “The more extreme the agent’s misconduct,
the more likely it is that the contract is void for lack of authority [see Art. 2.2.5(1)] rather
than voidable by reason of a conflict of interests” (11) (pursuant to para. 1 sentence 1). It
depends on the interpretation of the circumstances (including the evaluation of any
usages in that business), (12) if the principal needs to act to avoid the contract (as a
matter of precaution, it should act by a notice of avoidance, Art. 3.2.11). (13)
C. Legal Consequences and Options: Avoidance or Confirmation
2a Para. 1 sentence 2 refers to Art. 3.2.11-3.2.15 for the details of the avoidance. Thus, in
case of such a conflict, the principal may avoid the contract (wholly or partially, → Art.
3.2.13), by notice (→ Art. 3.2.11), within a reasonable time after it became aware of the
relevant facts (14) (→ Art. 3.2.12 (1)), and with retroactive effect (→ Art. 3.2.14); and the
principal may claim restitution, if this is required under the circumstances (→ Art. 3.2.15).
Art. 3.2.9 leaves the principal with an option of confirmation. (15)
D. Avoidance Excluded (Para. 2)
3 The principal loses its right to avoid the contract if it gives prior consent and/or has
(actual or constructive) (16) knowledge of “the agent’s acting in a situation of conflicts of
interests.” (17) However, if the agent fails to disclose such a conflict, the principal has the
right to claim damages under other rules in the Unidroit Principles (e.g. Art. 7.4.1 et seq. in
connection with Art. 1.7, 3.2.16) or other applicable law. (18)
E. Applicability beyond Contract Conclusion
4 While other actions of agents (beyond contracting) in conflict-of-interest situations are
– as required by Art. 1.6 – ‘within the scope of these Principles’ (→ Art. 2.2.1 no. 1), they are
‘not expressly settled’ by Art. 2.2.7. An application of Art. 2.2.7 by analogy, as proposed by
Rademacher, (19) provides a solution in accordance with ‘their underlying general
principles’ (→ Art. 1.6), i.e. the goal of contracting in good faith and fair dealing (Art. 1.7),
because, from a practitioner’s perspective, the nuanced balance struck by Art. 2.2.7
provides yet again an application of the general principle of good faith and fair dealing
(Art. 1.7) to a particular contractual situation.
Article 2.2.8 (Sub-agency)
An agent has implied authority to appoint a sub-agent to perform acts which it is not
reasonable to expect the agent to perform itself. The rules of this Section apply to the
sub-agency.
A. Sub-Agency When ‘Reasonable’
1 Inspired by the Art. 3:206 PECL and going beyond the Geneva Convention, (1) Art. 2.2.8
deviates from most national laws (which prohibit sub-delegation) (2) for the sake of
convenience in international commercial contexts. (3) Sentence 1 facilitates sub-
delegation, unless the principal prohibits sub-delegation, by communication to the third
party (4) (and by shaping the agency agreement). (5) Actual authority of the sub-agent
under Art. 2.2.8 depends on the interpretation (Art. 4.2-4.3) of the circumstances of the
agency. For example, purely administrative acts or compound tasks impossible to fulfil
by one person lie on the one extreme (where it would be unreasonable to expect
personal performance) (6) , and tasks of a personal character lie on the other extreme
(where the expectation of personal performance would be reasonable). (7) Factors
suggesting that sub-delegation is in the interest of the principal (8) point towards the
applicability of Art. 2.2.8.
B. Details and Legal Consequences
2 Sentence 2 refers to the application of the entire section by analogy, including e.g. the
rules on apparent authority in Art. 2.2.5, but also Art. 2.2.8 itself (‘string of agents’). (9) The
acts of the sub-agent properly appointed thus bind the principal (10) pursuant to Art.
2.2.3 (1). Irrespective of subtle details, (11) the principal has the chance “to terminate the
sub-agent’s authority, or ratify the sub-agent’s unauthorized acts.” (12) With respect to the
potential liability of the sub-agent toward the third party under Art. 2.2.6, the question is
“whether the sub-agent has contracted with the third party as sub-agent, referring to the
appointing agent’s authority, or whether it appeared to the third party as the principal’s
agent.” (13)
Article 2.2.9 (Ratification)
(1) An act by an agent that acts without authority or exceeds its authority may be ratified
by the principal. On ratification the act produces the same effects as if it had initially
been carried out with authority.
(2) The third party may by notice to the principal specify a reasonable period of time for
ratification. If the principal does not ratify within that period of time it can no longer do
so.
(3) If, at the time of the agent’s act, the third party neither knew nor ought to have known

19
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 of the lack of authority, it may, at any time before ratification, by notice to the principal
indicate its refusal to become bound by a ratification.
A. Ratification With Retroactive Effect (Para. 1)
1 Full – not: partial (1) – ratification under para. 1 is an instrument for the principal to
overcome an unsolicited yet welcome action of the agent. Inspired by Art. 15 (1) of the
Unidroit Geneva Convention, (2) para. 1 is in line with most, if not all legal systems. (3)
Subject to objection by the contract partner pursuant to para. 3 (→ no. 2 below), it has
retroactive effect to the moment of contract conclusion with the agent. (4) In practice,
ratification can be also a useful tool for the work of the agent. Example: If an action in the
interest of the principal would surpass its authority (e.g. a contract conclusion), the agent
can signal (in the document itself) that it acts (i) without power of attorney (to avoid
liability under Art. 2.2.6) and (ii) subject to ratification by the principle (pursuant to para.
1). (5) Unless otherwise agreed in the contract, ratification can be express or implied (6)
(Art. 4.2-4.3), e.g. by performance. It can even stem from some unequivocal action
towards a third party (e.g. instruction of a bank to pay the price), (7) argumentum Art.
2.1.6 (3). (8) In contrast, mere silence will usually not suffice to demonstrate ratification.
(9) An interpretation of para. 1 pursuant to Art. 1.6 prevents reading any additional
requirements into the ratification inspired by some national law. (10) If the third party is
not even aware of the lack of authority of the agent, the ratification can be an entirely
(often company) internal matter between the principal and the agent. (11)
B. Timing; a First Option for Third Party (Para. 2)
1a Unless otherwise agreed, e.g. by a deadline in the contract (Art. 1.5), the principal can
ratify “at any time”. (12) Yet, the other party can take control of the timing by setting “a
reasonable period of time for ratification” (13) (para. 2); this is in line with many national
laws (14) and may be helpful e.g. to obtain certainty in a moving market (15) with volatile
prices or shortage of materials.
C. A Second Option: Escape Clause for the Third Party (Para. 3)
2 Para. 3 provides a tool of defence to the ‘other party’ who neither ‘knew nor ought to
have known of that agent’s lack of authority’ of the agent (16) (but relies on its ‘apparent
authority’, Art. 2.2.5 (2)). If the ‘other party’ finds out about it later, it may take control
during the time period until ratification by the principal (para. 1) and avoid it by a
notice. (17)
Article 2.2.10 (Termination of authority)
(1) Termination of authority is not effective in relation to the third party unless the third
party knew or ought to have known of it.
(2) Notwithstanding the termination of its authority, an agent remains authorised to
perform the acts that are necessary to prevent harm to the principal’s interests.
A. A Clarification
1 Para. 1 mirrors Art. 2.2.1-2.2.2 for the scenario of termination of an agency (for whatever
reason, e.g. misconduct by the agent). (1) The principal is free to revoke (2) the agent’s
authority unless this was agreed otherwise (Art. 1.5). (3) Without communication to the
third party (and without constructive knowledge), such termination is not the third party’s
business. (4) The application of Art. 2.2.5 (2) on apparent authority, if applicable, subsists
of course. (5)
B. Some Subsisting Actual Authority
2 As is good practice in any reasonable termination of long-standing relationships (e.g. in
the construction business), termination should be realised smoothly. For that purpose,
para. 2 leaves the agent with actual authority after termination to do the acts “necessary
to prevent harm to the principal’s interests”. (6) This is in line with Art. 20 of the Unidroit
Geneva Convention (7) and many national laws (8) (whereby the issues of internal
compensation of the agent for connected costs are beyond the scope of the Unidroit
Principles, unless, of course, the relationship between the principal and the agent is
governed by a contract that is itself submitted to the Unidroit Principles). Para. 2 may
require a narrow interpretation (9) depending on the interpretation of the revocation (→
Art. 4.2-4.3).

References

20
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 1) Official Comments, Art. 2.1.1 no. 1, p. 34; StL-Doc. 16 (1979), pp. 2-3; P. Perales
Viscasillas in Morán Bovio, Art. 2.1 no. 1, p. 109. For an overview of the development of
the classical offer and acceptance approach see G. Christiandl in
Jansen/Zimmermann, Art. 2:101 (1) [PECL]: Conditions for the Conclusion of a Contract
(General), no. 5 (pp. 238-239) and Art. 2:211 [PECL]: Contracts not Concluded through
Offer and Acceptance, no. 1 (p. 346), referencing to the confirmation of the concept in
Art. 1113-1122 French Code Civil (2016).
2) See G. Christiandl in Jansen/Zimmermann, Art. 2:102 [PECL]: Intention, no. 1-3 (pp. 266-
267) on PECL and DCFR.
3) L. Nottage in Vogenauer, Art. 2.1.1 no. 3.
4) Highlighted by L. Nottage in Vogenauer, Art. 2.1.1 no. 11.
5) G. Christiandl in Jansen/Zimmermann, Art. 2:211 [PECL]: Contracts not Concluded
through Offer and Acceptance, no. 1 (p. 346) with further references.
6) G. Christiandl in Jansen/Zimmermann, Art. 2:211 [PECL]: Contracts not Concluded
through Offer and Acceptance, no. 1 (p. 346) with further references.
7) Official Comments, Art. 2.1.1 no. 2, p. 34.
8) See G. Christiandl in Jansen/Zimmermann, Art. 2:102 [PECL]: Intention, no. 1-3 (pp. 266-
267) on PECL and DCFR.
9) L. Nottage in Vogenauer, Art. 2.1.1 lists in his footnotes to no. 6 e.g. the laws of USA (§ 4
Restatement (Second) of Contracts; §§ 1-201(3) and (12), 2-204 UCC; also noted by P.
Perales Viscasillas in Morán Bovio, Art. 2.1 no. 2.b, p. 110), Korea (Art. 532 Civil Code),
Russia (Art. 432 (1) Civil Code); see also Art. 1120 French Civil Code (2016 version)
(contract conclusion as an exception in case of silence).
10) P. Perales Viscasillas in Morán Bovio, Art. 2.1 no. 2.b, p. 111.
11) U. G. Schroeter in Schlechtriem&Schwenzer, Introduction to Art. 14-24 no. 99-100; L.
Nottage in Vogenauer, Art. 2.1.1 no. 5; G. Christiandl in Jansen/Zimmermann, Art. 2:211
[PECL]: Contracts not Concluded through Offer and Acceptance, no. 2 at p. 347.
12) L. Nottage in Vogenauer, Art. 2.1.1 no. 7.
13) Ad hoc, Nurhima Kiram Fornan et al. v. Malaysia, Final Award of 28 February 2022, at
no. 233 (Unilex No. 2311 (Abstract); fully published at [Link] and soon in YB
Comm Arb 2023 (Vol. 48)) relating to payments “for an unbroken and continuous
period of 49 years”.
14) Official Comments, Art. 2.1.1 no. 2, Illustration 1, p. 35.
15) Official Comments, Art. 2.1.1 no. 3, Illustration 2, p. 35; G. Christiandl in
Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 14-15 (pp. 320-321) qualifying
the EDI as a mere tool of communication, with reference to section 102 (d) of the 1999
US Uniform Computer Information Transactions Act, and differentiating from the
qualification as an ‘agent’.
16) A similar test applies under Art. 2:103 PECL, see G. Christiandl in Jansen/Zimmermann,
Art. 2:103 [PECL]: Sufficient Agreement, no. 4 (p. 269).
17) Judgement of S. Vogenauer in Vogenauer, Art. 5.1.7 no. 5; see StL-Doc. 41 (1988), p.1.
18) Official Comments, Art. 2.1.2 no. 1, p. 36.
19) S. Vogenauer in Vogenauer, Art. 5.1.7 no. 1.
20) For the roots in civil law (focusing on ‘simulation’) and common law (discussing ‘sham
devices and artificial transactions’) see H. Dedek in Jansen/Zimmermann, Art. 6:103
[PECL]: Simulation, no. 5-9 (pp. 816-819).
21) See H. Dedek in Jansen/Zimmermann, Art. 6:103 [PECL]: Simulation, no. 3 (p. 815) on
‘simulation and illicit purposes’, no. 4 (on ‘simulated contract and ‘counter letter’’).
22) See the discussion on ‘protection of third parties’ H. Dedek in Jansen/Zimmermann,
Art. 6:103 [PECL]: Simulation, no. 6 (pp. 816-817) including civil law legal history; and
no. 7-9 (pp. 817-819) for the development of the approach in common law (no
contract; sham contract).
23) H. Dedek in Jansen/Zimmermann, Art. 6:103 [PECL]: Simulation, no. 1 (p. 814).
24) H. Dedek in Jansen/Zimmermann, Art. 6:103 [PECL]: Simulation, no. 2 (p. 814)
referencing in the context of a discussion of Art. 6:103 PECL to ‘a reasonable observer’.
25) H. Dedek in Jansen/Zimmermann, Art. 6:103 [PECL]: Simulation, no. 2 (p. 814): “no
enforceable contract can spring to life”.
26) H. Dedek in Jansen/Zimmermann, Art. 6:103 [PECL]: Simulation, no. 2 (p. 815) in the
context of PECL.
27) The use of that term varies. While this instrument is sometimes used in practice to
conceal the real contents of a contract (which may also have legitimate reasons, e.g.
to protect a third party), in some industries it is used to describe deviations to
standard terms of a party.
1) StL-Doc. 41 (1988), p. 8; P. Perales Viscasillas in Morán Bovio, Art. 2.2 no. 1, p. 113; for
more comparative details see L. Nottage in Vogenauer, Art. 2.1.2 no. 3.
2) Official Comments Art. 2.1.2, p. 36.
3) G. Christiandl in Jansen/Zimmermann, Art. 2:201 [PECL]: Offer, no. 4 (p. 295).
4) Invitatio ad offerendum, see draft Art. 2 (2) in StL-Doc. 41 (1988) plus comment b., pp.
4, 5; L. Nottage in Vogenauer, Art. 2.1.1 no. 8. See generally on offers to an indefinite
group of persons with varying solutions in national laws G. Christiandl in
Jansen/Zimmermann, Art. 2:201 [PECL]: Offer, no. 8-11 (pp. 297-300).
5) StL-Doc. 41 (1988), p. 6; L. Nottage in Vogenauer, Art. 2.1.2 no. 6 (with further reasons in
no. 8).
6) P. Perales Viscasillas in Morán Bovio, Art. 2.2 no. 1, p. 114; L. Nottage in Vogenauer, Art.
2.1.1 no. 10 (reflecting different opinions).

21
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 7) L. Nottage in Vogenauer, Art. 2.1.1 no. 11.
8) L. Nottage in Vogenauer, Art. 2.1.1 no. 14 (with useful further references in note 39).
9) See Official Comments, Art. 2.1.2 no. 2, Illustrations 2 and 3, p. 37; L. Nottage in
Vogenauer, Art. 2.1.2 no. 12-13.
10) L. Nottage in Vogenauer, Art. 2.1.2 no. 2; G. Christiandl in Jansen/Zimmermann, Art.
2:201 [PECL]: Offer, no. 6 (p. 297).
11) Official Comments Art. 2.1.2 no. 2, pp. 36-37; P. Perales Viscasillas in Morán Bovio, Art.
2.2.1, p. 114; see also L. Nottage in Vogenauer, Art. 2.1.2 no. 19 (indefineteness on
essential terms will prevent contract formation).
12) Under such circumstances, the intent to be bound is strong (by an offer acceptable
by a straightforward ‘yes’); the details can be taken from the previous contract. Art.
4.8, 5.1.2 and 1.9 can help to determine the contents of the contract. In that specific
case, the entire plant was in the end built on the basis of a Letter of Intent, drafted
by a lawyer during lunch while the executives celebrated the deal (reported by
Erhard Jahn (deceased in 2007) on various occasions). A similar example is contained
in Official Comments, Art. 2.1.2 no. 1, Illustration 1, p. 36.
13) Example from practice (as used e.g. by some pharmacies).
14) L. Nottage in Vogenauer, Art. 2.1.2 no. 15 (and no. 16 on possible effects of a
‘gentleman agreement’).
15) L. Nottage in Vogenauer, Art. 2.1.2 no. 21.
1) StL-Doc. 41 (1988), p. 10, H. Gabriel, no. 2.161 (p. 81).
2) Official Comments, Art. 2.1.3 no. 1, p. 38.
3) L. Nottage in Vogenauer, Art. 2.1.3 no. 7.
4) Official Comments, Art. 2.1.3 no. 2, p. 38.
5) See G. Christiandl in Jansen/Zimmermann, Art. 2:202 [PECL]: Revocation of an Offer, no.
19 (p. 311).
1) G. Christiandl in Jansen/Zimmermann, Art. 2:202 [PECL]: Revocation of an Offer,
heading to no. 10-11 (p. 308).
2) As the convention was prepared by Unidroit, it can be found on its website
([Link] rg/instruments/international-sales/ulfc-1964/ [last visited
on 9 January 2023]), including materials on the legislative history.
3) Upon proposal of a US delegate to overcome a joint opposition of the delegations
from Belgium, England and the Netherlands against the draft for article 5 ULF which
was in line with e.g. the laws of Germany and Switzerland law, see G. Christiandl in
Jansen/Zimmermann, Art. 2:202 [PECL]: Revocation of an Offer, no. 10-11 (p. 308: “[a]n
international middleground”). See also ibid. no. 2-9 (pp. 302-308) for the history of the
divide since medieval times and in contemporary Europe.
4) Official Comments, Art. 2.1.4 no. 1, p. 39; StL-Doc. 41 (1988), p. 13; P. Perales Viscasillas
in Morán Bovio, Art. 2.4 no. 1, p. 120; H. Gabriel, no. 2.169 (p. 83).
5) § 2-205 UCC (USA); § 42 Restatement (Second) of Contracts (USA); P. Perales Viscasillas
in Morán Bovio, Art. 2.4 no. 1, p. 120; L. Nottage in Vogenauer, Art. 2.1.4 no. 3 and no. 2.
6) See G. Christiandl in Jansen/Zimmermann, Art. 2:205 [PECL]: Time of Conclusion of the
Contract, no. 3 at p. 325 (explaining the middle ground reached as in some
jurisdictions including England a statement of accpetance becomes binding with its
‘dispatch’, see ibid. no. 3 as opposed to the ‘receipt’ rule, ibid. no. 4 p. 325).
7) Official Comments, Art. 2.1.4 no. 2.b, pp. 40-41.
8) For further details see e.g. G. Christiandl in Jansen/Zimmermann, Art. 2:202 [PECL]:
Revocation of an Offer, no. 12-15 (pp. 308-310).
9) For further details see L. Nottage in Vogenauer, Art. 2.1.4 no. 10-15; G. Christiandl in
Jansen/ Zimmermann, Art. 2:202 [PECL]: Revocation of an Offer, no. 13 (p. 309).
10) G. Christiandl in Jansen/Zimmermann, Art. 2:202 [PECL]: Revocation of an Offer, no. 14
(p. 309) on the similar language in Art. 2:202 (3) PECL.
11) L. Nottage in Vogenauer, Art. 2.1.4 no. 17.
1) The rule exists in probably most domestic laws for commercial contracts even if, in
many domestic laws, it is not explicitly codified. See by way of example G. Christiandl
in Jansen/Zimmermann, Art. 2:203 [PECL]: Rejection, no. 4 (p. 314) for an overview of
European national laws.
2) Official Comments, Art. 2.1.5 no. 1, pp. 41-42; StL-Doc. 41 (1988), p. 14 (comment b.); L.
Nottage in Vogenauer, Art. 2.1.4 no. 3-4; G. Christiandl in Jansen/Zimmermann, Art.
2:203 [PECL]: Rejection, no. 3 (pp. 313-314).
3) G. Christiandl in Jansen/Zimmermann, Art. 2:203 [PECL]: Rejection, no. 4 (p. 314) with
further reference.
4) P. Perales Viscasillas in Morán Bovio, Art. 2.5 no. 1, p. 125.
5) P. Perales Viscasillas in Morán Bovio, Art. 2.5 no. 1, p. 125; L. Nottage in Vogenauer, Art.
2.1.4 no. 6.
6) Example from practice: An English Limited Liability Company administered out of
Germany has lost its legal capacity in Germany with BREXIT, Court of Appeal Munich, 5
August 2021, RIW 2021, pp. 839-841 with a note of Rainer Hausmann.
7) G. Christiandl in Jansen/Zimmermann, Art. 2:203 [PECL]: Rejection, no. 7 (p. 315).
1) H. Gabriel, no. 2.186 (p. 87).
2) Or, in rare cases, depending on the interpretation of the offer, by somebody chosen
by the offeree, R. Anderson in Vogenauer, Art. 2.1.6 no. 8.
3) G. Christiandl in Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 2 (p. 317) and
ibid. no. 4 (requiring “clarity”).

22
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 4) P. Perales Viscasillas in Morán Bovio, Art. 2.6 no. 1, p. 127 (“claro, inequívoco e
ioncondicional”); R. Anderson in Vogenauer, Art. 2.1.6 no. 1-4.
5) Official Comments, Art. 2.1.6 no. 1, p. 43; P. Perales Viscasillas in Morán Bovio, Art. 2.6
no. 1, p. 127.
6) P. Perales Viscasillas in Morán Bovio, Art. 2.6 no. 1, p. 127.
7) R. Anderson in Vogenauer, Art. 2.1.6 no. 7 (quoting for CISG U.G. Schroeter in
Schlechtriem&Schwenzer, Art. 18 no. 28-29): argument for an analogy to Art. 2.1.11 (2)
in case of a slight deviation, e.g. reply on a separate document in the form required
but not on the form attached by the offeror.
8) R. Anderson in Vogenauer, Art. 2.1.6 no. 3.
9) R. Anderson in Vogenauer, Art. 2.1.6 no. 9 (giving also the example of ‘starting to use
goods’ which the offeror delivered).
10) P. Perales Viscasillas in Morán Bovio, Art. 2.6 no. 1, p. 127; R. Anderson in Vogenauer,
Art. 2.1.6 no. 10-11.
11) Official Comments, Art. 2.1.6 no. 2, p. 43.
12) Whereby the act must not necessarily relate to an essential term of the offer and may
relate to secondary duties, see discussion and vote at P.C.-Misc. 12 (1988), pp. 25-26;
see R. Anderson in Vogenauer, Art. 2.1.6 no. 28-31.
13) See G. Christiandl in Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 9 (p. 319).
14) G. Christiandl in Jansen/Zimmermann, Art. 2:205 [PECL]: Time of Conclusion of the
Contract, no. 9 at p. 327 critising ambiguity of the wording ‘performed’ because for
some national laws (e.g. German or Italian law) it suffices if the recepient of the offer
commences to act, while under English law “full performance appears to be required
for acceptance.”
15) Official Comments, Art. 2.1.6 no. 3, p. 43; R. Anderson in Vogenauer, Art. 2.1.6 no. 12-13
(arguing with ‘freedom from contract’); G. Christiandl in Jansen/Zimmermann, Art.
2:204 [PECL]: Acceptance, no. 10-11 (p. 319) with historic and comparative remarks.
16) P. Perales Viscasillas in Morán Bovio, Art. 2.6 no. 1, p. 127 (to the similar context of Art.
1.8 version 1994 which correlates to Art. 1.9 of the actual version 2016); G. Christiandl in
Jansen/ Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 12 (p. 320).
17) R. Anderson in Vogenauer, Art. 2.1.6 no. 14.
18) Often observed in practice, e.g. even in the cross-border automotive part
manufacturing industry; see also R. Anderson in Vogenauer, Art. 2.1.6 no. 15.
19) See e.g. Decisions of the German Federal Supreme Court, BGHZ 61, 282, 285 (at a.), 26
September 1973; NZBau 2011, pp. 303, 304 (at para. 21-23), 27 January 2011.
20) R. Anderson in Vogenauer, Art. 2.1.6 no. 17.
21) R. Anderson in Vogenauer, Art. 2.1.6 no. 16.
22) G. Christiandl in Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 13 (p. 320)
with comparative remarks to similar rules e.g. in the laws of England, France,
Germany and Italy (“generally recognised”; with further references).
23) R. Anderson in Vogenauer, Art. 2.1.6 no. 19. S. Vogenauer in Vogenauer, Art. 5.1.9 no. 11.
24) Cf. G. Christiandl in Jansen/Zimmermann, Art. 2:205 [PECL]: Time of Conclusion of the
Contract, no. 5 (pp. 325-326): “Actual knowledge of the seller’s acceptance is not
required.”
25) Official Comments, Art. 2.1.6 no. 4, p. 44; for details see R. Anderson in Vogenauer, Art.
2.1.6 no. 23-24.
26) G. Christiandl in Jansen/Zimmermann, Art. 2:205 [PECL]: Time of Conclusion of the
Contract, no. 2 (p. 324) on the general principles (as comment to a similar rule as Art.
2.1.6 para. 2) with reference to I. Schwenzer/P. Hachem/C. Kee, no. 10.62: “[The] offeror
must have correctly and completely understood the offer.”
27) L. Nottage in Vogenauer, Art. 2.1.1 no. 3.
1) R. Anderson in Vogenauer, Art. 2.1.7 no. 3 (towards the end).
2) P. Perales Viscasillas in Morán Bovio, Art. 2.7 no. 1, p. 133.
3) Official Comments, Art. 2.1.7, Illustration 2, p. 46; P. Perales Viscasillas in Morán Bovio,
Art. 2.7 no. 1, p. 134.
4) P. Perales Viscasillas in Morán Bovio, Art. 2.7 no. 1, p. 134.
5) See G. Christiandl in Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for
Acceptance, no. 4 (p. 330).
6) Distinct formulation by R. Anderson in Vogenauer, Art. 2.1.7 no. 1; see also P. Perales
Viscasillas in Morán Bovio, Art. 2.7 no. 1, p. 134; G. Christiandl in Jansen/Zimmermann,
Art. 2:206 [PECL]: Time Limit for Acceptance, no. 2 with comparative legal background
since the Prussian Code of 1794 (p. 329): “an oral offer ... typically ... does not survive
the conversation”.
7) P. Perales Viscasillas in Morán Bovio, Art. 2.7 no. 1, p. 134.
8) G. Christiandl in Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for Acceptance, no.
3 (p. 329).
9) R. Anderson in Vogenauer, Art. 2.1.6 no. 25-26.
10) StL-Doc. 41 (1988), p. 19; H. Gabriel, no. 2.186 (p. 87); G. Christiandl in
Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for Acceptance, no. 1 (p. 328).
11) E.g. English law; for a European overview see G. Christiandl in Jansen/Zimmermann,
Art. 2:206 [PECL]: Time Limit for Acceptance, no. 5 (p. 330).
12) Official Comments, Art. 2.1.7, p. 46; StL-Doc. 41 (1988), p. 19; P. Perales Viscasillas in
Morán Bovio, Art. 2.7 no. 1, p. 134.
13) R. Anderson in Vogenauer, Art. 2.1.7 no. 5.

23
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 14) R. Anderson in Vogenauer, Art. 2.1.7 no. 5, 7 (with a counter example when time for
printing out is needed in no. 8).
15) R. Anderson in Vogenauer, Art. 2.1.7 no. 2.
16) G. Christiandl in Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for Acceptance, no.
4 (p. 330).
17) R. Anderson in Vogenauer, Art. 2.1.7 no. 10.
18) Consent: G. Christiandl in Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for
Acceptance, no. 4 (p. 330) with a quote of H. Kötz arguing in the opposite direction.
1) R. Anderson in Vogenauer, Art. 2.1.8 no.2; further examples U. G. Schroeter in
Schlechtriem&Schwenzer, Art. 18 no. 61.
2) R. Anderson in Vogenauer, Art. 2.1.8 no.1.
3) Cf. R. Anderson in Vogenauer, Art. 2.1.7 no. 2 (‘master of the formation process’).
4) Official Comments, Art. 2.1.8, pp. 46-47.
5) Art. 8 (2) ULF.
6) H. Gabriel, no. 2.203 (p. 95); see StL-Doc. 41 (1988), p. 23 (initially proposing the literal
wording of the CISG); R. Anderson in Vogenauer, Art. 2.1.8 no. 1; For an in-depth
overview on computation of time, historic roots and a comparative overview of legal
rules (like the – critised – 1972 European Convention on the Calculation of Time-Limits
which includes Austria and Switzerland as member states) see O. Unger in
Jansen/Zimmermann, Art. 1:304 (1) [PECL]: Computation of Time (Period of Time Fixed
in a Document), no. 1-11 (pp. 201-207).
7) G. Christandl in Jansen/Zimmermann, Art. 2:206 [PECL]: Time Limit for Acceptance, no.
3 (p. 329).
8) Official Comments, Art. 2.1.8, p. 47; R. Anderson in Vogenauer, Art. 2.1.8 no. 4.
9) R. Anderson in Vogenauer, Art. 2.1.8 no. 4.
1) Official Comments, Art. 2.1.9 no. 2, p. 48; StL-Doc. 41 (1988), p. 26; P. Perales Viscasillas
in Morán Bovio, Art. 2. 9 no. 1, 2b, pp. 138 et seq.
2) G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 1 (p. 331).
3) StL-Doc. 8 (1975), p. 13 (Bonell); R. Anderson in Vogenauer, Art. 2.1.9 no. 2. See also e.g.
Art. 2:207 PECL and G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late
Acceptance, no. 1 (p. 331) with reference to Italian and, at note 2, to Dutch law.
4) G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 1 (p. 331).
5) This is the assessment in some other laws like German law, see G. Christiandl in
Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 1 at p. 332.
6) P. Perales Viscasillas in Morán Bovio, Art. 2.9 no. 1, p. 137; R. Anderson in Vogenauer,
Art. 2.1.9 no. 3-4.
7) R. Anderson in Vogenauer, Art. 2.1.9 no. 6 (with a critical view on the inaccurate
German version).
8) R. Anderson in Vogenauer, Art. 2.1.9 no. 5; cf. also P. Mankowski in
Ferrari/Kieninger/Mankowski, Art. 21 no. 9.
9) R. Anderson in Vogenauer, Art. 2.1.9 no. 7, 13.
10) R. Anderson in Vogenauer, Art. 2.1.9 no. 11 (arguing for a limited duty of inspection of
the envelope by the offeror).
11) R. Anderson in Vogenauer, Art. 2.1.9 no. 10.
12) Official Comments, Art. 2.1.9 no. 3, p. 48.
13) R. Anderson in Vogenauer, Art. 2.1.9 no. 9.
14) R. Anderson in Vogenauer, Art. 2.1.9 no. 12; G. Christiandl in Jansen/Zimmermann, Art.
2:207 [PECL]: Late Acceptance, no. 2 (p. 332).
15) StL-Doc. 8 (1975), p. 13 (Bonell).
16) G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 2 (p. 332).
17) G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 2 (p. 332).
18) G. Christiandl in Jansen/Zimmermann, Art. 2:207 [PECL]: Late Acceptance, no. 2 at p.
332-333 (describing also (i) the discussions during the drafting of the German Civil
Code – § 149 BGB – and (ii) that such rule was not necessary under English law
considering a contract as concluded as soon as the notice of acceptance is
dispatched).
19) R. Anderson in Vogenauer, Art. 2.1.9 no. 11 (referring to U.G. Schroeter in
Schlechtriem&Schwenzer, Art. 18 no. 45); I. Schwenzer/P. Hachem/C. Kee, no. 10.61; G.
Christiandl in Jansen/Zimmermann, Art. 2:208 [PECL]: Modified Acceptance, no. 1-2 (p.
335).
1) Official Comments, Art. 2.1.10, p. 49; StL-Doc. 41 (1988), p. 26; P. Perales Viscasillas in
Morán Bovio, Art. 2.10 no. 1, p. 141.
2) G. Christiandl in Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 5 (p. 318:
“redundant”).
1) P. Perales Viscasillas in Morán Bovio, Art. 2.11 no. 1, p. 142; I. Schwenzer/P. Hachem/C.
Kee, no. 10.67 (p. 151).
2) P. Perales Viscasillas in Morán Bovio, Art. 2.11 no. 1, p. 142.
3) R. Anderson in Vogenauer, Art. 2.1.11 no. 1-2.
4) Official Comments, Art. 2.1.11 no. 1, p. 50; R. Anderson in Vogenauer, Art. 2.1.11 no. 2
(with reference to P. Mankowski in Ferrari/Kieninger/Mankowski, Art. 19 no. 27).
5) R. Anderson in Vogenauer, Art. 2.1.11 no. 2 (with reference to H. Kötz Vertragsrecht, 2nd
ed. 2012) § 2 para. 123).
6) See R. Anderson in Vogenauer, Art. 2.1.11 no. 5-6 (with references to the Art. 19 (2) CISG,
Swedish and US-UCC background) and the letter exchange at note 156.

24
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 7) Art. 7 (2) ULF, Art. 19 (2) CISG. For a vivid summary of the history of the development of
that exception, with its roots in the Swedish Contract Act of 1915 and in § 2-207 (2) UCC
1952, see G. Christiandl in Jansen/Zimmermann, Art. 2:208 [PECL]: Modified
Acceptance, no. 4 (p. 336).
8) R. Anderson in Vogenauer, Art. 2.1.11 no. 8, 12 (including e.g. inspection, packaging but
possibly also minor price adjustments).
9) R. Anderson in Vogenauer, Art. 2.1.11 no. 7; H. Gabriel, no. 2.194 (p. 91), emphasises that
the absence of the examples in the Unidroit Principles does not lead to a different
legal result.
10) See draft Art. 7 (3) at StL-Doc. 41 (1988), p. 20.
11) Official Comments, Art. 2.1.11 no. 2, pp. 50-51; P.C.-Misc. 12 (1988), p. 28 (Bonell); P.
Perales Viscasillas in Morán Bovio, Art. 2.11 no. 1, 2.b, pp. 142-143 with the indication
(also contained in the Official Comments to Art. 2.1.11) that the list from the Art. 19 (3)
CISG is not to be fully adopted, as to the Principles having a different scope of
applicability and certain problems of interpretation may arise. G. Christiandl in
Jansen/Zimmermann, Art. 2:208 [PECL]: Modified Acceptance, no. 5 (p. 337): “[T]his
enumeration can only be illustrive, and it certainly does not replace an evaluation of
the circumstances of the particular case. Sometimes even seemingly minor terms,
such as those regarding packaging, can be material”.
12) R. Anderson in Vogenauer, Art. 2.1.11 no. 10; cf. also A. K. Schnyder/R. M. Straub, EJLR
1995, pp. 243, 263.
13) Official Comments, Art. 2.1.11 no. 2, p. 51; P. Perales Viscasillas in Morán Bovio, Art. 2.11
no. 1, p. 143.
14) R. Anderson in Vogenauer, Art. 2.1.11 no. 15.
15) R. Anderson in Vogenauer, Art. 2.1.11 no. 15.
16) G. Christiandl in Jansen/Zimmermann, Art. 2:208 [PECL]: Modified Acceptance, no. 6-7
(pp. 337-338), with critical comments and proposing that, in this regard, German law
(§ 155 BGB) provides a better solution leading at a contract conclusion without the
non-material modifications.
17) Developed from the example given by R. Anderson in Vogenauer, Art. 2.1.11 no. 16, and
tested in practice (e.g. when working on an acceptance notice via long distance and
different time zones). Indeed, sometimes when concentrating on an acceptance
notice, a detail or thought may occur, be added to the contract and – in accordance
with fair dealing (Art. 1.7) and usages or practices (Art. 1.9) – be also mentioned in the
cover email; the offeree may deem it wise to regulate this issue in the contract but
does not consider it of such importance that it wishes to risk the conclusion of
contract.
18) This scenario has been observed many times in practice, e.g. in 2021-2022 for the
negotiation of an interim agreement on limitation of liability under the Unidroit
Principles, negotiated as a carveout to ongoing negotiations of a framework
agreement under the Unidroit Principles. The negotiations were conducted in light of
a general commitment in a nomination letter to negotiate in good faith an agreement
on limitation of liability within a certain time frame (automotive industry).
19) G. Christiandl in Jansen/Zimmermann, Art. 2:208 [PECL]: Modified Acceptance, no. 8 (p.
338) with regard to inter alia § 2-207 (2) (a) UCC and § 2:208 (3) PECL.
20) G. Christiandl in Jansen/Zimmermann, Art. 2:208 [PECL]: Modified Acceptance, no. 9 (p.
338).
21) G. Christiandl in Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General
Conditions, no. 1 (p. 339).
22) P. Perales Viscasillas in Morán Bovio, Art. 2.11 no. 1, p. 143. See also ibid. Art. 2.1.6 no. 4,
referring to Art. 2.22 in the 1994 version, i.e. today Art. 2.1.22 in the 2016 version.
1) StL-Doc. 16 (1979), pp. 7-8; P. Perales Viscasillas in Morán Bovio, Art. 2.12 no. 1, p. 144.
2) M. J. Bonell, An International Restatement, p. 107.
3) G. Christiandl in Jansen/Zimmermann, Art. 2:210 [PECL]: Professional’s Written
Confirmation, no. 1 (p. 343).
4) E.g. Art. 23 (1) Brussels I Regulation requiring a written documentation of an oral
agreement; see also Art. II (2) of the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards of 1958 (“New York Convention”) and R. Anderson in
Vogenauer, Art. 2.1.12 no. 12.
5) Official Comments, Art. 2.1.12 no. 1, p. 51; P. Perales Viscasillas in Morán Bovio, Art. 2.12
no. 1, p. 144.
6) P. Perales Viscasillas in Morán Bovio, Art. 2.12 no. 1, p. 145.
7) P. Perales Viscasillas in Morán Bovio, Art. 2.12 no. 1, p. 145.
8) R. Anderson in Vogenauer, Art. 2.1.12 no. 1.
9) R. Anderson in Vogenauer, Art. 2.1.12 no. 1.
10) R. Anderson in Vogenauer, Art. 2.1.12 no. 17 and no. 13.
11) R. Anderson in Vogenauer, Art. 2.1.12 no. 15.
12) P.C.-Misc. 12 (1988), p. 39 (Maskow).
13) R. Anderson in Vogenauer, Art. 2.1.12 no. 17.
14) See R. Anderson in Vogenauer, Art. 2.1.11 no. 10.
15) See Official Comments, Art. 2.1.12 no. 1, Illustration 2, p. 52 (as opposed to, Illustration
3, p. 53, of the exception that the added arbitration clause is common practice in the
trade sector concerned); for a detailed discussion see R. Anderson in Vogenauer, Art.
2.1.12 no. 9-12.
16) Example borrowed from R. Anderson in Vogenauer, Art. 2.1.12 no. 14 note 233.

25
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 17) R. Anderson in Vogenauer, Art. 2.1.12 no. 14.
18) G. Christiandl in Jansen/Zimmermann, Art. 2:210 [PECL]: Professional’s Written
Confirmation, no. 2 (p. 343): “a provision that was revised in 2003 but reinstated in its
original form in 2011”.
19) R. Anderson in Vogenauer, Art. 2.1.12 no. 2 with further references; G. Christiandl in
Jansen/ Zimmermann, Art. 2:210 [PECL]: Professional’s Written Confirmation, no. 2 in
fine (p. 344 in fine) for England.
20) R. Anderson in Vogenauer, Art. 2.1.12 no. 4 (with further references) and Art. 2.1.6 no. 4;
G. Christiandl in Jansen/Zimmermann, Art. 2:210 [PECL]: Professional’s Written
Confirmation, no. 3 (p. 344) with a comparative overview of national laws in Germany,
France and England.
21) G. Christiandl in Jansen/Zimmermann, Art. 2:210 [PECL]: Professional’s Written
Confirmation, no. 1 (p. 343) and no. 4 at p. 345.
1) P. Perales Viscasillas in Morán Bovio, Art. 2.13 no. 1, p. 146.
2) G. Christiandl in Jansen/Zimmermann, Art. 2:204 [PECL]: Acceptance, no. 7 (p. 318) with
reference to the laws of England, Germany, Italy, Switzerland.
3) Official Comments, Art. 2.1.13 no. 1, p. 54; R. Anderson in Vogenauer, Art. 2.1.13 no. 4.
4) P.C.-Misc. 12 (1988), p. 75 (Bonell). As contrasted with a condition to a contract (Art.
5.3.1) which otherwise has been concluded, R. Anderson in Vogenauer, Art. 2.1.13 no. 2.
5) R. Anderson in Vogenauer, Art. 2.1.13 no. 4.
6) As opposed to a general ‘take it or leave it’, R. Anderson in Vogenauer, Art. 2.1.13 no. 4.
7) P. Perales Viscasillas in Morán Bovio, Art. 2.13 no. 1, p. 146.
8) E.g. Art. 1.2, 2.1.1, 2.1.6 (1) sentence 1 and (3), 2.1.11 (1), 2.1.14, 4.8.
9) So the pertinent analysis of R. Anderson in Vogenauer, Art. 2.1.13 no. 1.
10) R. Anderson in Vogenauer, Art. 2.1.13 no. 8.
11) See also R. Anderson in Vogenauer, Art. 2.1.13 no. 5.
1) R. Anderson in Vogenauer, Art. 2.1.14 no. 2.
2) Official Comments, Art. 2.1.14 no. 4, Illustration 3. See also the example of MRI Trading
AG v Erdenet Mining Corporation LLC [2012] EWHC 1988 (Comm), affirmed [2013] EWCA
Civ 156 (on ‘an agreement to agree’, no. 17), summarised by R. Anderson in Vogenauer,
Art. 2.1.14 no. 9.
3) See again the English example MRI Trading AG v Erdenet Mining Corporation LLC [2012]
EWHC 1988 (Comm), affirmed [2013] EWCA Civ 156 (at no. 18), summarised by R.
Anderson in Vogenauer, Art. 2.1.14 no. 9.
4) Example given by the English Rix LJ in Mamidoil-Jetoil Greek Petroleum Company SA v
Okta Crude Oil Refinery AD (No 1), [2001] EWCA Civ 406, para. 69 (iv) – (vii), also quoted
by R. Anderson in Vogenauer, Art. 2.1.14 no. 8 (at lit. d).
5) StL-Doc. 41 (1988), p. 38 (with further references to Swiss and Algerian law); P. Perales
Viscasillas in Morán Bovio, Art. 2.14 no. 1, p. 148 (“2-305 UCC”); R. Anderson in
Vogenauer, Art. 2.1.14 no. 1.
6) P. Perales Viscasillas in Morán Bovio, Art. 2.14 no. 1, p. 148; R. Anderson in Vogenauer,
Art. 2.1.14 no. 18 and Rix LJ in Mamidoil op. cit. (above note 196) at lit. c).
7) R. Anderson in Vogenauer, Art. 2.1.14 no. 1.
8) R. Anderson in Vogenauer, Art. 2.1.14 no. 1.
9) StL-Misc. 12 (1988), p. 94 (Bonell); see also M.J. Bonell, An International Restatement, p.
109 (“clear evidence of the intention of the parties”). See G. Christiandl in
Jansen/Zimmermann, Art. 2:101 (1) [PECL]: Conditions for the Conclusion of a Contract
(General), no. 9-10 (pp. 240-241) for an historic overview, both in Roman and common
law, of the requirement of ‘intention directed to legal consequences’ (Pollock,
Principles of Law and in Equity, 1876) “literally translating Savigny” (ibid. no. 10).
10) For a discussion see R. Anderson in Vogenauer, Art. 2.1.14 no. 14.
11) Official Comments, Art. 2.1.14 no. 2, p. 57; R. Anderson in Vogenauer, Art. 2.1.14 no. 3.
12) Official Comments, Art. 2.1.14 no. 2, p. 57; R. Anderson in Vogenauer, Art. 2.1.14 no. 3.
13) R. Anderson in Vogenauer, Art. 2.1.14 no. 4 (with the pertinent comment that silence
alone (to cover an issue) may not trigger Art. 2.1.14), and no. 6.
14) R. Anderson in Vogenauer, Art. 2.1.14 no. 4.
15) Official Comments, Art. 2.1.14 no. 1, p. 56; P. Perales Viscasillas in Morán Bovio, Art. 2.14
no. 1, p. 148; R. Anderson in Vogenauer, Art. 2.1.14 no. 4 (and note 277 referencing to
both Art. 2 Swiss Code of Obligations and Art. 1387 of the Civil Code of Quebec which
both permit contract conclusion despite secondary issues left open).
16) Official Coments Art. 2.1.14 no. 3; StL-Misc. 32 (2016), p. 6, no. 8.
17) R. Anderson in Vogenauer, Art. 2.1.14 no. 6 and note 283, referencing for such a duty in
long-term contracts to Yam Seng Pte Ltd. v International Trade Corp Ltd [2013] EWHC
111 QB, para. 119-154.
18) R. Anderson in Vogenauer, Art. 2.1.14 no. 12 (unless the parties explicitly provided for
an ‘express’ agreement).
19) See e.g. for Germany § 315 subpara. 3 BGB.
20) See also R. Anderson in Vogenauer, Art. 2.1.14 no. 10.
21) Official Comments, Art. 2.1.14 no. 3, pp. 57-58; P. Perales Viscasillas in Morán Bovio, Art.
2.14 no. 1, p. 148; see e.g. the similar provision in § 317 BGB.
22) R. Anderson in Vogenauer, Art. 2.1.14 no. 10.
23) Official Comments Art. 2.1.14 no. 3, p. 58 (requiring ‘clear evidence’ to uphold the
contract if the term is essential).
24) Official Comments Art. 2.1.14 no. 3 (para. 2).
25) Official Comments Art. 2.1.14 no. 3 (para. 2).

26
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 26) Again Official Comments Art. 2.1.14 no. 3 (emphasis added).
27) Official Comments Art. 2.1.14 no. 4.
28) Official Comments Art. 2.1.14 no. 4 and Illustration 3 at p. 59.
29) Official Comments Art. 2.1.14 no. 4 and Illustration 4 at p. 59.
30) See Official Comments Art. 2.1.14 no. 3, p. 58.
31) R. Anderson in Vogenauer, Art. 2.1.14 no. 10, 13 (not mentioning Art. 5.1.1 and 5.1.6).
32) R. Anderson in Vogenauer, Art. 2.1.14 no. 14 (‘hybrid application’ of Art. 2.1.4).
33) R. Anderson in Vogenauer, Art. 2.1.14 no. 18.
1) See U. Babusiaux in Jansen/Zimmermann, Introduction before Art. 2:301 [PECL]:
Negotiations Contrary to Good Faith, no. 9 (p. 364) with reference to sociological
aspects of systematic trust into the legal system (Niklas Luhmann).
2) 2 Civil law and common law systems have different understandings in this regard. In
this sense see M. J. Bonell, An International Restatement, pp. 139-140.
3) 3 Common law systems do not have a pre-contractual liability until a contract is
made, see E. A. Farnsworth, 87 Columbia Law Review 1987, pp. 217, 221. In England
there is no general obligation of the parties to conform to good faith (→ Annex to
Preamble no. 4). In this regard see also e.g. I. Schwenzer/P. Hachem/C. Kee, no. 24.02.
4) Example from practice, experienced in 2014, where the invoice for a broken deal
based on § 311 (2) BGB (culpa in contrahendo) was paid on first demand.
5) 5 I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 19. For an historic and comparative
overview of liability for negotiation (culpa in contrahendo), at the border line
between contract and tort law, see U. Babusiaux in Jansen/Zimmermann, Introduction
before Art. 2:301 [PECL]: Liability for Negotiations, no. 1-15 (pp. 348-358).
6) Official Comments, Art. 2.1.15 no. 1, p. 60; P. Perales Viscasillas in Morán Bovio, Art. 2.15
no. 1, p. 150; I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 13, 15.
7) P.C.-Misc. 12 (1988), p. 15 (Bonell).
8) P. Perales Viscasillas in Morán Bovio, Art. 2.15 no. 1, p. 150; I. Zuloaga Rios in
Vogenauer, Art. 2.1.15 no. 7.
9) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 15 (p. 367); see M. J. Bonell, An International Restatement, pp. 136-137; I.
Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 18.
10) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 47.
11) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 4 at p. 362.
12) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 16 (p. 367-368).
13) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 19 (p. 369).
14) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 19 (p. 369).
15) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 29 at pp. 356-357.
16) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 20 (p. 369).
17) Summary reading of U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]:
Negotiations Contrary to Good Faith, no. 18 at p. 368 and no. 19 (p. 369). This scenario
is quite realistic in the context of a complex long-term contract project with multiple
individual contracts for different project phases. Example: In the automotive
industry, the purchase of parts for serial production requires often prior substantial
development work. A supplier may be motivated to provide such work at a
favourable price in the expectation of being subsequently nominated for serial
production. In order to trigger the special development support by the contract
partner B in a critical (and expensive) development phase under a development
contract, A causes that B trusts in its future nomination for the (substantially more
lucrative) serial production under a follow-up supply contract for the industrial
production of the new product currently in development by B. Upon completion of
development, A refuses to finalise negotiations of a supply contract and decides to
produce otherwise, using the results developed by B.
18) For the discussion of other scenarios I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 7-12
(e.g. its function in CISG cases or as a tool for interpreting Lithuanian law).
19) Carefully arguing in this direction (“However, it is not clear …”) also I. Zuloaga Rios in
Vogenauer, Art. 2.1.15 no. 41.
20) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 47.
21) In this direction also I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 47.
22) In this sense also U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations
Contrary to Good Faith, no. 11 at p. 366.
23) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 12 (p. 366) with further reference to Farnsworth. In practice, this will depend
on the interpretation of the contract on which the claim is based.
24) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 10 with further references (p. 364): from the “exchange [of] relevant
information with the potential for making a later contract” to “the conclusion of a
contract; a withdrawal from negotiations by all parties; or a unilateral break-off by
one party”.

27
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 25) P. Perales Viscasillas in Morán Bovio, Art. 2.15 no. 1, p. 150.
26) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 19-24.
27) Official Comments, Art. 2.1.15 Illustration 1, p. 61; I. Zuloaga Rios in Vogenauer, Art.
2.1.15 no. 26; U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations
Contrary to Good Faith, no. 16 at p. 368.
28) P. Perales Viscasillas in Morán Bovio, Art. 2.15 no. 2.a., 2b., pp. 150-152, draws
comparatives to Art. 1902 Spanish Código Civil and Art. 74 CISG; I. Zuloaga Rios in
Vogenauer, Art. 2.1.15 no. 34-39 (referring in no. 35 convincingly to the vicinity of this
case group to Art. 1.8).
29) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 38.
30) Official Comments, Art. 2.1.15 no. 2 and Illustration 2, pp. 60-61; I. Zuloaga Rios in
Vogenauer, Art. 2.1.15 no. 27.
31) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 28-29.
32) Specific performance for further negotiations is not covered by Art. 2.1.15, see for
European private law U. Babusiaux in Jansen/Zimmermann Art. 2:301 [PECL]:
Negotiations Contrary to Good Faith, no. 27 (p. 373).
33) Official Comments, Art. 2.1.15 no. 2, p. 60; P.C.-Misc. 12 (1988), p. 18 (Lando); P. Perales
Viscasillas in Morán Bovio, Art. 2.15 no. 1, p. 150; I. Zuloaga Rios in Vogenauer, Art. 2.1.15
no. 42; U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary
to Good Faith, no. 25 (p. 371-372). The distinction between reliance interest and
expectation interest goes back to the German jurist Jehring (1818-1892), see U.
Babusiaux in Jansen/Zimmermann, Introduction before Art. 2:301 (1) [PECL]: Liability
for Negotiations, no. 7 (p. 352).
34) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary to Good
Faith, no. 24 (p. 371); see also no. 26 at p. 373 for an Italian Supreme Court case “The
Giuliana” (1993) considering lost profit from a different kind of contract which the
damaged party did not conclude in reliance to the contract negotiations.
35) Official Comments, Art. 2.1.15 no. 3, p. 61; I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no.
30, 44; U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contrary
to Good Faith, no. 24 (p. 371).
36) Official Comments, Art. 2.1.15 no. 3.
37) Official Comments Art. 2.1.15 no. 3.
38) I. Zuloaga Rios in Vogenauer, Art. 2.1.15 no. 48.
39) U. Babusiaux in Jansen/Zimmermann, Art. 2:301 [PECL]: Negotiations Contraty to Good
Faith, no. 20 (p. 369), followed by comparative examples on “weighing the parties
motives and interests” from the French Supreme Court at no, 21 (pp. 369-370).
1) P.C.-Misc. 12 (1988), p. 97 (Bonell); P. Perales Viscasillas in Morán Bovio, Art. 2.16 no. 1,
p. 152; I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 11; U. Babusiaux in
Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no. 10 at p. 379.
2) I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 3 (e.g. “equitable wrong” in England), 4; U.
Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no. 6-7
(pp. 376-377) with a comparative overview.
3) Official Comments, Art. 2.1.16 no. 2, pp. 63-64; I. Zuloaga Rios in Vogenauer, Art. 2.1.16
no. 10-11 and 14.
4) See e.g. U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of
Confidentiality, no. 5 (pp. 375-376) on the definition of confidentiality.
5) 5 See also Art. II.-3:302 (2) DCFR which is more specific in the rule on confidentiality
itself: See I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 12 (‚similar approach’) and U.
Babusiaux in Jansen/ Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no. 10
(pp. 378-379), hinting further to the useful summary of criteria as developed by
Thomas Marshall (Exports) Ltd. V Guinle [1979] Ch 227, 248: “information is to be held
confidential, if firstly, the holder of the information believed that its release would
cause damage to him or enable competitors to gain a financial advantage; secondly,
that the information was not known to others; thirdly, that these two believes were
reasonable; and finally, that the three criteria mentioned must be judged in light of
the usages and practices of the relevant industry”.
6) 6 Example from practice, noted e.g. by I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 16;
U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no. 9
(p. 378).
7) U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no. 8
at p. 377 (emphasis added), relating to all discussed transnational formulations
including the Unidroit Principles (see ibid. No. 2 at p. 375).
8) See e.g. U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of
Confidentiality, no. 14 (p. 381).
9) U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no.
12 at p. 380 with further references to von Bar.
10) U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no.
13 (pp. 380-381) gives a comparative overview with regard to cases in national courts.

28
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 11) U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no.
15 (p. 381) with references to Dal Pont, Law of Confidentiality (2014) pp. 267 et seq. For
remedy in equity and to Smeureanu, Confidentiality in International Commercial
Arbitration (2011), pp. 114-26. For international arbitration it is worth noting in this
context the IPBA Guidelines on Privilege and Attorney Secrecy in International
Arbitration (2019) provide for an equal playing field compromising between civil and
common law approaches to privileges and attorney secrecy (and applying also to
inhouse-counsels). The author regularly adds them into international arbitration
agreements, in particular when including both common and civil law parties. See
[Link] rg/publications/ipba-privilege-guidelines/211/ [last visited on 9
January 2023].
12) On causation U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of
Confidentiality, no. 16 (p. 381).
13) See also I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 6. On the reasons why, at the time,
the author did consent to a post-contractual choice of the Unidroit Principles after
comparative legal research see Introductory Remark to Section 7.4 no. 2 and E.
Brödermann, RIW 2004, pp. 721, 723-725. In the same direction, in his practice under
the Unidroit Principles, the author has observed in 2021 carve-outs for violations of
confidentiality from exemption clauses (→ Art. 7.1.6) limiting otherwise liability by a
cap.
14) Official Comments, Art. 2.1.16 no. 3, p. 64; I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no.
19.
15) U. Babusiaux in Jansen/Zimmermann, Art. 2:302 [PECL]: Breach of Confidentiality, no.
17 (p. 382) mentions the case groups loss of credit, loss or reputation and loss of a
contract with a third party.
16) Cf. I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 13.
17) I. Zuloaga Rios in Vogenauer, Art. 2.1.16 no. 14 (“duration”).
1) G. Christiandl in Jansen/Zimmermann, Art. 2:105 [PECL]: Merger Clause, no. 5 (p. 283,
“Terminological and comparative overview”).
2) P. Perales Viscasillas in Morán Bovio, Art. 2.17 no. 1, p. 154; see the helpful summary of
the reasons for such clauses from an English law perspective by S. Vogenauer in
Vogenauer, Art. 2.1.17 no. 3, p. 372.
3) S. Vogenauer in Vogenauer, Art. 2.1.17 no. 3.
4) P. Perales Viscasillas in Morán Bovio, Art. 2.17 no. 1, p. 154; S. Vogenauer in Vogenauer,
Art. 2.1.17 no. 5.
5) S. Vogenauer in Vogenauer, Art. 2.1.17 no. 6.
6) Official Comments, Art. 2.1.17, p. 65; P. Perales Viscasillas in Morán Bovio, Art. 2.17 no. 1,
p. 154.
7) P. Perales Viscasillas in Morán Bovio, Art. 2.17 no. 1, p. 154.
8) See the example given by S. Vogenauer in Vogenauer, Art. 4.3 no. 29 at note 192
quoting in depth from Arbitral Award 14 January 2010 (Joseph Charles Lemire v
Ukraine), ICSID case no. ARB/06/18, IIC 424 (2010), Unilex No. 1533, no. 115 (see e.g.:
‘Without support in the text, expectations nurtured by Claimant do not give rise to
contractual obligations of Respondent.’) and 196.
9) S. Vogenauer in Vogenauer, Art. 2.1.17 no. 4.
10) S. Vogenauer in Vogenauer, Art. 2.1.17 no. 7 and note 25.
11) S. Vogenauer in Vogenauer, Art. 2.1.17 no. 7.
12) Convincing argument by S. Vogenauer in Vogenauer, Art. 2.1.21 no. 8 and Art. 2.1.17 no.
5 with reference to Art. 2:105 (4) PECL and Art. II.-4:104 (4) DCFR which are strict with
respect to individually negotiated merger clauses; G. Christiandl in
Jansen/Zimmermann, Art. 2:105 [PECL]: Merger Clause, no. 3 (p. 282). The Principles of
European Contract Law go a step further in Art. 1:205 (2) and generally restrict the
effect of merger clauses which are (not negotiated but) merely contained in standard
terms to a “presumption that the parties intended that their prior statements,
undertakings or agreements were not to form part of the contract.”
13) As noted by S. Vogenauer (op. cit. Art. 2.1.17 no. 5), Art. 2.1.17 does contain mitigating
language like Art. 2.1.18 sentence 2.
1) For historical background since Justinian (in 528 AD) and a comparative overview see
G. Christiandl in Jansen/Zimmermann, Art. 2:106 [PECL]: Written Modification Only, no.
3-4 (pp. 286-287).
2) S. Vogenauer in Vogenauer, Art. 2.1.18 no. 2.
3) See Official Comments Art. 4.3 Illustration 9, p. 144.
4) G. Christiandl in Jansen/Zimmermann, Art. 2:106 [PECL]: Written Modification Only, no.
5 (p. 287) with regard to the law of several US states even before the adoptation of
UCC § 2-209 (2) in 1957.
5) P. Perales Viscasillas in Morán Bovio, Art. 2.18 no. 2b, p. 156.
6) S. Vogenauer in Vogenauer, Art. 2.1.18 no. 3. See also Art. 1.3 sentence 2.
7) Official Comments, Art. 2.1.17, p. 65.
8) P. Perales Viscasillas in Morán Bovio, Art. 2.18 no. 1, p. 155.
9) S. Vogenauer in Vogenauer, Art. 2.1.18 no. 2.
10) For a convincing line of arguments frustrating goals of circumvention see S. Vogenauer
in Vogenauer, Art. 2.1.18 no. 10.
11) S. Vogenauer in Vogenauer, Art. 2.1.18 no. 8.

29
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 12) S. Vogenauer in Vogenauer, Art. 2.1.18 no. 9 (with detailed quotes from ICC Case No.
11849 (2006), Unilex No. 1160, arguing that permitting once an exception to payment
terms would not generally prohibit a party to later rely again on the initially agreed
payment terms).
13) Official Comments, Art. 2.1.18, p. 66.
14) See Federal Court of Australia, GEC Marconi Systems Pty Ltd. v BHP Information
Technology Pty Ltd. and Others, 12 February 2003, Unilex No. 845; P. Perales Viscasillas
in Morán Bovio, Art. 2.18 no. 1, p. 156.
15) Official Comments, Art. 2.1.18, Illustration 2, p. 66; S. Vogenauer in Vogenauer, Art.
2.1.18 no. 8.
16) See G. Christiandl in Jansen/Zimmermann, Art. 2:106 [PECL]: Written Modification Only,
no. 4 at p. 287 with references to different attitudes towards enforcement of such
clauses under German or French law.
1) Official Comments, Art. 2.1.19 no. 1, p. 67; Bucharest Court of Appeal, Romania, 24
October 2014, Unilex No. 2265; P. Perales Viscasillas in Morán Bovio, Art. 2.19 no. 1, p.
157. See however, the critical remarks of C. Ramberg in Eppur si muove: The Age of
Uniform Law, pp. 1640, 1641-1643.
2) See N. Jansen in Jansen/Zimmermann, Introduction before Art. 6:201 [PECL], no. 1-2
(pp. 920-922) on ‘purpose and risks’ and history (with an example of standard terms in
Roman law for ‘letting and hiring warehouses’ at p. 921 note 7).
3) T. Naudé in Vogenauer, Introduction to Art. 2.1.19-2.1.22 no. 2.
4) T. Naudé in Vogenauer, Introduction to Art. 2.1.19-2.1.22 no. 2.
5) StL-Doc. 15 (1979), p. 33 (with reference to French and Austrian law); P. Perales
Viscasillas in Morán Bovio, Art. 2.20 no. 1, p. 160. In practice, avoiding the contra
proferentem rule for desired terms (for example, on limitation of liability) may be a
reason to negotiate individual terms on the basis of standard terms of the (future)
contract partner.
6) S. Vogenauer in Vogenauer, Art. 4.1 no. 19.
7) T. Naudé in Vogenauer, Introduction to Art. 2.1.19-2.1.22 no. 17-18.
8) StL-Doc. 15 (1979), p. 31; see e.g. the European Council Directive 93/13/EEC of 5 April
1993 on unfair terms in consumer contracts, Official Journal L 095, 21.4.1993, pp. 29-34.
9) E.g. T. Naudé in Vogenauer, Art. 2.1.19 no. 34 (on choice of court and arbitration
clauses).
10) P. Perales Viscasillas in Morán Bovio, Art. 2.19 no. 1, p. 158.
11) P. Perales Viscasillas in Morán Bovio, Art. 2.19 no. 1, p. 158.
12) T. Naudé in Vogenauer, Introduction to Art. 2.1.19 no. 2, 4 (underlining that it is not
enough if a third party [e.g. the user’s lawyer] drafted the terms for general and
repeated use).
13) T. Naudé in Vogenauer, Art. 2.1.19 no. 5.
14) P.C.-Misc. 12 (1988), p. 65 (Farnsworth); P. Perales Viscasillas in Morán Bovio, Art. 2.19
no. 1, p. 158; T. Naudé in Vogenauer, Art. 2.1.19 no. 3.
15) Official Comments, Art. 2.1.19 no. 2, p. 67; T. Naudé in Vogenauer, Art. 2.1.19 no. 4.
16) As compared to German law: T. Naudé in Vogenauer, Art. 2.1.19 no. 3 (on German law);
E. Brödermann, Hamb. Law Rev. 2016, pp. 21, 26-29 and in Eppur si muove: The Age of
Uniform Law, pp. 1283, 1297-1299.
17) Official Comments, Art. 2.1.19 no. 3, p. 68; P.C.-Misc. 12 (1988), p. 67 (Drobnig); M. J.
Bonell, An International Restatement, p. 154.
18) P. Perales Viscasillas in Morán Bovio, Art. 2.19 no. 1, p. 157; on the terminology see T.
Naudé in Vogenauer, Introduction to Arts. 2.1.19-2.1.22 no. 4.
19) T. Naudé in Vogenauer, Art. 2.1.19 no. 6.
20) See StL-Doc. 15 (1979), pp. 30-31; M. J. Bonell, An International Restatement, pp. 154-
155 (less strict than German law but more restrictive than Italian and Dutch law).
21) T. Naudé in Vogenauer, Art. 2.1.19 no. 11.
22) T. Naudé in Vogenauer, Art. 2.1.19 no. 12-27.
23) T. Naudé in Vogenauer, Art. 2.1.19 no. 32 (one previous transaction is normally not
sufficient to establish a practice).
24) 24 StL-Doc. 16 (1979), p. 10; see also P.C.-Misc. 4 (1983), p. 6 (rejecting an upfront test
for reasonableness of usages); T. Naudé in Vogenauer, Art. 2.1.19 no. 24-27 and 30
(example from the purchase of grain at the London commodity exchange) and no. 29
(underlining from the travaux
25) T. Naudé in Vogenauer, Art. 2.1.19 no. 8.
26) T. Naudé in Vogenauer, Art. 2.1.19 no. 20.
27) T. Naudé in Vogenauer, Art. 2.1.19 no. 10, 19-23; see also Official Comments, Art. 2.1.19
no. 3, Illustration 2, p. 68. This correlates roughly with the requirements of all those
legal systems (e.g. in Germany, Lithuania, Netherlands, Spain) which contain,
distinctly from English and French law, specific rules on the formation of contracts
under standard terms, see N. Jansen in Jansen/Zimmermann, Art. 2:104 [PECL]: Terms
not Individually Negotiated, no. 5-9 and note 10 (p. 275-277), following an historic
overview on the “response of legal systems” to the standardization of terms at pp.
273-274.
28) T. Naudé in Vogenauer, Art. 2.1.19 no. 14-15, 27.
29) T. Naudé in Vogenauer, Art. 2.1.19 no. 14, 18, 21 (with further references to court cases),
23.

30
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 30) Debated, see T. Naudé in Vogenauer, Art. 2.1.19 no. 16-17, 20; N. Jansen in
Jansen/Zimmermann, Art. 2:104 [PECL]: Terms not Individually Negotiated, no. 11 (p.
278) and no.12 at p. 279. At p. 278, Jansen summarises on the opportunity to take
notice under CISG and the Unidroit Principles convincingly as follows (footnotes
omitted): “Today, the prevailing opinion assigns this burden to the supplier of terms
who benefits from the application of the standard terms, unless there is a good
reason not to do so (waiver; common usage […]). Indeed, in international business it is
often time-consuming and may therefore be unreasonable to make inquiries as to
the supplier’s specific standard terms. It is thus for the supplier to convey his
standard terms to the other party or make them otherwise easily available. Another
reason is the considerable variance of standard terms in the international context.
While it may be reasonable under national law to expect professional customers to
know standard terms which are generally used in a specific sector, this is not the case
in the international context. Only under exceptional circumstances can it therefore
be reasonable for the supplier to assume that it is not necessary, without specific
request, to transmit his standard terms”. (Emphasis added).
31) T. Naudé in Vogenauer, Art. 2.1.19 no. 22. If the contract is concluded electronically, it
is reasonable to place standard terms on the website, N. Jansen in
Jansen/Zimmermann, Art. 2:104 [PECL]: Terms not Individually Negotiated, no. 14 (pp.
279-280).
32) Official Comments, Art. 2.1.20 no. 1, p. 69; T. Naudé in Vogenauer, Art. 2.1.20 no. 2.
33) N. Jansen in Jansen/Zimmermann, Introduction before Art. 6:201 [PECL] no. 13 (at p.
930) citing R Michaels, 73 RabelsZ 2009, pp. 866-88, 874, 885.
34) Leuschner, AGB-Recht für Verträge zwischen Unternehmen, pp. 44 et seq.; E.
Brödermann, Hamb. Law Rev. 2016, pp. 21, 27.
1) Official Comments, Art. 2.1.20 no. 1, p. 69; T. Naudé in Vogenauer, Art. 2.1.20 no. 2; see
also M. J. Bonell, An International Restatement, p. 156.
2) See N. Jansen in Jansen/Zimmermann, Art. 6:206 [PECL]: Transparency of Terms, no. 13
(at p. 990), discussing ‘elements of transparency’, though in the context of consumer
contracts.
3) Official Comments, Art. 2.1.20 no. 4, p. 71; P. Perales Viscasillas in Morán Bovio, Art. 2.20
no. 1, p. 159; T. Naudé in Vogenauer, Art. 2.1.20 no. 17-18 (for that purpose a mere
indication in bold print is not enough). Naudé’s point will require careful
consideration (and may well be seen otherwise) depending on the kind of clause,
trade usage (Art. 1.9) and the circumstances of the case because, in a commercial
setting, express acceptance weighs heavily.
4) Official Comments, Art. 2.1.20 no. 3, p. 70; T. Naudé in Vogenauer, Art. 2.1.20 no. 16.
5) Official Comments, Art. 2.1.20 no. 2, pp. 69-70; T. Naudé in Vogenauer, Art. 2.1.20 no. 6.
6) Official Comments, Art. 2.1.20 no. 2, Illustration 1, p. 70; T. Naudé in Vogenauer, Art.
2.1.20 no. 7.
7) T. Naudé in Vogenauer, Art. 2.1.20 no. 7 and note 124.
8) T. Naudé in Vogenauer, Art. 2.1.20 no. 8.
9) T. Naudé in Vogenauer, Art. 2.1.20 no. 12.
10) T. Naudé in Vogenauer, Art. 2.1.20 no. 10.
11) Official Comments, Art. 2.1.20 no. 2, pp. 69-70; T. Naudé in Vogenauer, Art. 2.1.20 no. 11.
12) See again N. Jansen in Jansen/Zimmermann, Art. 6:206 [PECL]: Transparency of Terms,
no. 13 (at p. 990), discussing ‘elements of transparency’, though in the context of
consumer contracts.
13) Official Comments, Art. 2.1.20 no. 3, p. 70; T. Naudé in Vogenauer, Art. 2.1.20 no. 14.
14) Official Comments, Art. 2.1.20 no. 3, p. 70; T. Naudé in Vogenauer, Art. 2.1.20 no. 14.
15) See N. Jansen in Jansen/Zimmermann, Introduction before Art. 6:201 [PECL] no. 3 (pp.
922-923) on the historically different points of departure for the legal discussion of
judicial review in (i) France (“instrument to protect week parties”), (ii) Germany
(“power of professional suppliers and trade organizations [...] to impose a general
regime of contract law on the other party”), (iii) Nordic legal systems (“the law
imposes collective ideas of contractual justice [...] and thus also subjects the price
and individually negotiated terms to a fairness test, even where businesses are
contracting”); and (iv) England and Switzerland (“reluctant to interfere [...] Standard
terms are regarded as a sensible instrument of contract formation”).
16) Consumer oriented national law provides as a benchmark a notion of fairness with
special regard to consumer rather than business needs. On the importance of such
benchmark see N. Jansen in Jansen/Zimmermann, Art. 2:104 [PECL]: Terms not
Individually Negotiated, no.8 (at p. 277), and Art. 6:201 [PECL]: Unfairness of Terms, no.
13 (pp. 941-942). For example, a recent change in the German law of sales, in force
since 2022 (§ 434 BGB), accentuates consumer protecting objective tests to define a
“defect” which shall apply regardless of the specification, unless ‘validly’ agreed
otherwise (§ 434 (3) first half sentence BGB).
17) For judicial review under European standards see N. Jansen in Jansen/Zimmermann,
Introduction before Art. 6:201 [PECL], no. 10-12 (pp. 927-929, with an overview); and,
with a focus on the requirement of transpareny: Art. 6:201 [PECL]: Unfairness of Terms,
no. 16 (pp. 943-944); Art. 6:205 [PECL]: Exclusions from Unfairness Test, no. 11-13 (pp.
983-984); Art. 6:206 [PECL]: Transparency of Terms, no. 12-16 (pp. 990-992).

31
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 1) StL-Doc. 15 (1979), p. 32 (with reference to Italian, German and Dutch law); T. Naudé in
Vogenauer, Art. 2.1.21 no. 1-2 notes 159-150 refers to Cass com 7 January 1969, JCP 1969
II 16121 and CA Grenoble 24 January 1996, Rev Arb 1997, 87 (Unilex) (on French law), Art.
1342 Italian Cciv, German § 305b BGB; § 203(d) Restatement (Second) of Contracts
(USA); S. Vogenauer in Jansen/ Zimmermann, Art. 5:104 [PECL]: Preference to
Negotiated Terms, no.1 (p. 775).
2) S. Vogenauer in Jansen/Zimmermann, Art. 5:104 [PECL]: Preference to Negotiated
Terms, no.1 (p. 775) citing Homburg Houtimport BV v Agrosin Private Ltd (The Starsin)
[2003] UKHL 12 [11], [2004] 1 AC 715, 737 (HL): “common sense”.
3) M. Schmidt-Kessel in Schlechtriem&Schwenzer, Art. 8 no. 64-65; S. Vogenauer in
Jansen/Zimmermann, Art. 5:104 [PECL]: Preference to Negotiated Terms, no.2 (at p.
776): “although it is not mentioned in CISG 8”.
4) S. Vogenauer in Jansen/Zimmermann, Art. 5:104 [PECL]: Preference to Negotiated
Terms, no. 3 (p. 776) poiting out that each of the (possibly) conflicting rules needs to
be first duly interpreted.
5) Official Comments, Art. 2.1.21, pp. 71-72; M. J. Bonell, An International Restatement, p.
156; P. Perales Viscasillas in Morán Bovio, Art. 2.21, 1, p. 161.
6) T. Naudé in Vogenauer, Art. 2.1.21 no. 6.
7) T. Naudé in Vogenauer, Art. 2.1.21 no. 7 (for ‘tacit terms’, implied from the facts).
1) M. J. Bonell, An International Restatement, p. 110; in this sense also T. Naudé in
Vogenauer, Art. 2.1.22 no. 15.
2) See P.C.-Misc. 12 (1988), p. 42 (Bonell); P. Perales Viscasillas in Morán Bovio, Art. 2.22 no.
1, p. 162; T. Naudé in Vogenauer, Art. 2.1.22 no. 2; and the detailed overview of G.
Christiandl in Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General Conditions,
no. 2 (p. 340) with reference to Butler Machine Tool Co Ltd v Ex-Cell-O Corporation
(England) Ltd [1979] 1 WLR 401, 404-5, and the summary analysis at no. 5 (pp. 341-342).
3) T. Naudé in Vogenauer, Art. 2.1.22 no. 11; G. Christiandl in Jansen/Zimmermann, Art.
2:209 [PECL]: Conflicting General Conditions, no. 5 (p. 341) with reference to Art. 6:225
BW of 1992.
4) T. Naudé in Vogenauer, Art. 2.1.22 no. 2 note 169; G. Christiandl in Jansen/Zimmermann,
Art. 2:209 [PECL]: Conflicting General Conditions, no. 3 (p. 340) with reference to § 2-
207 (3) UCC.
5) T. Naudé in Vogenauer, Art. 2.1.22 no. 8 (‘regard to the object and effect of a term’).
6) Official Comments, Art. 2.1.22 no. 3, pp. 73-74; P. Perales Viscasillas in Morán Bovio, Art.
2.22 no. 1, p. 163; T. Naudé in Vogenauer, Art. 2.1.22 no. 14 citing von Mehren, The
Formation of Contracts, Chapter 9 no. 172, p. 96.
7) P.C.-Misc. 12 (1988), p. 41 (Bonell), if reference to standard terms is a more or less
automatic reference as contrasted to an (individual) insistence on the respective
terms in which case the general rules on offer and acceptance apply; P. Perales
Viscasillas in Morán Bovio, Art. 2.22 no. 1, p. 162; for comparative legal examples T.
Naudé in Vogenauer, Art. 2.1.22 no. 14.
8) T. Naudé in Vogenauer, Art. 2.1.22 no. 15 (‘the fairest solution’); G. Christiandl in
Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General Conditions, no. 6 (p. 342):
“a ‘good solution’” [with a reference to Kötz, a former director of the Max-Planck-
Insitute for Comparatibe and Private International Law in Hamburg], but
“questionable”. CISG Advisory Council Opinion No. 13 finds in the same sense: “The
knock-out rule has the advantage that it is in conformity with the intention of typical
parties in international commercial relations and leads to acceptable results in
cross-border trade situations. [...] The rule avoids an arbitrary choice between the
two sets of competing standard terms, instead using only those elements which are
common to both sets.” (Rule 10.6, which also contains an explicit reference to the
Unidroit Principles, [Link] o13-p2/ [last visited on
9 January 2023].
9) T. Naudé in Vogenauer, Art. 2.1.22 no. 14.
10) Official Comments, Art. 2.1.22 no. 3, pp. 73-74; P. Perales Viscasillas in Morán Bovio, Art.
2.22 no. 1, p. 163.
11) Pertinent observation of T. Naudé in Vogenauer, Art. 2.1.22 no. 4.
12) T. Naudé in Vogenauer, Art. 2.1.22 no. 5-6, 7.
13) T. Naudé in Vogenauer, Art. 2.1.22 no. 14.
14) T. Naudé in Vogenauer, Art. 2.1.22 no. 15.
15) P. Perales Viscasillas in Morán Bovio, Art. 2.22, no. 1, p. 163; similar interpretation by T.
Naudé in Vogenauer, Art. 2.1.22 no. 4.
16) M. J. Bonell, An International Restatement, p. 111; T. Naudé in Vogenauer, Art. 2.1.22 no.
9.
17) G. Christiandl in Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General
Conditions, no. 4 (p. 341).
18) If the buyer merely refers to its standard terms excluding the CISG in a way which
does not meet the high standard of the CISG, the exclusion of the CISG will not be
valid. The CISG standard will often require to send the standard terms, see L.
Spagnolo in Mankowski, Commercial Law, Art. 14 CISG no. 20 and no. 19; German
Federal Supreme Court. No. VIII ZR 60/01, NJW 2002, pp. 370, 371; Rechtbank Midden-
Nederland, No. C/16/333272 (2016), CISG-online No. 2685; Rechtbank Rotterdam, No.
C/10/476130 (2015). Schrijvershof B.V. v. F.V. Producciones Origen S.L., CISG-online No.
2683; Austrian Supreme Court, No. 10 Ob 518/95 (1996), CISG-online Nr. 224).

32
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 19) G. Christiandl in Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General
Conditions, no. 4 (p. 341).
20) G. Christiandl in Jansen/Zimmermann, Art. 2:209 [PECL]: Conflicting General
Conditions, no. 4 (p. 341), with further references.
21) In case that the choice-of-the Unidroit Principles is contained in the standard terms
of the supplier, Art. 18 CISG may apply in international sales scenarios; if the
standard terms of the buyer exclude the CISG under its Art. 6 – with or without proper
consideration of the advantages and disadvantages of using an available
international uniform law with existing worldwide case law -, the applicable national
law will determine if the conduct amounts to assent.
22) For a similar example see R. Anderson in Vogenauer, Art. 2.1.12 no. 7 (based on a Swiss
CISG case): Similar fact, but this time the seller/offeror objects to the order of the
buyer (with its standard terms) with a written “order confirmation” referring again to
the seller’s standard terms. This time the buyer starts performing by paying a first
instalment of the price and thereby accepts the order confirmation, qualified as a
new offer, by conduct.
23) The remaining risk is substantial; both in the construction and the automotive
industry the author has observed that such negotiations have taken several months
or even years as the matter then often lacks the necessary priorisation and
determination.
24) In case of contract performance without agreed contract terms, the courts abroad at
the seat of the contract partner may have jurisdiction over a future dispute; such
court would apply its private international law.
25) In practice, the scenario of “begun performance” of a long-term or project agreement
is quite frequent when business people start acting without constructive support of
legal departments.
1) StL-Misc. 21 (1999), no. 32; UNCITRAL et al., Tripartite Legal Guide, no. 442 (p. 97-98); L.
Rademacher in Jansen/Zimmermann, Art. 3:101 [PECL]: Scope of the Chapter, no. 3 at
p. 597.
2) StL-Misc. 20 (1998), no. 33 et seq. (Bonell); StL-Doc. 56 (1998), p. 1; T. Krebs in
Vogenauer, Art. 2.2.1 no. 1; L. Rademacher in Jansen/Zimmermann, Introduction before
Art. 3:101 [PECL], no. 8 (pp. 592-593).
3) 3 For the historical background from Roman law (ignoring agency) to the ‘juristic
miracle’ (Rabel) of developing the concept of agency as of the XIIth century first in
civil and then in common law, see L. Rademacher in Jansen/Zimmermann,
Introduction before Art. 3:101 [PECL], no. 3-7 (pp. 589-593).
4) L. Rademacher in Jansen/Zimmermann, Art. 3:101 [PECL]: Scope of the Chapter, no. 3 at
p. 597 giving as examples, with reference to StL-Misc. 21 (1999), no. 34, “performance
of the contract, communication of a termination, or representation in passive roles
such as the receipt of notices”.
5) T. Krebs in Vogenauer, Art. 2.2.1 no. 5. On the terminology of ‘agent’ see L. Rademacher
in Jansen/ Zimmermann, Introduction before Art. 3:101 [PECL], no. 2 (p. 588).
6) StL-Misc. 20 (1998), no. 56 (Lando) et seq.; T. Krebs in Vogenauer, Art. 2.2.1 no. 1-2.
7) On the renunciation from the principle of publicity see StL-Misc. 21 (1999), no. 100; L.
Rademacher in Jansen/Zimmermann, Art. 3:101 [PECL]: Scope of the Chapter, no. 5 (pp.
598-599) and Art. 3:102 [PECL]: Categories of Representation, no. 11 (pp. 606-607)
summarising “the reasons for not making the disclosure of the principal’s identity a
mandatory requirement for the effects of representatio to operate” such as freedom
of contract; the “third party then deliberately assumes the risk of having an unknown
debtor who effectvely cannot be sued”.
8) Official Comments, Art. 2.2.1 no. 1, p. 75.
9) OJ [1986] L 382/17; L. Rademacher in Jansen/Zimmermann, Introduction before Art.
3:101 [PECL], no. 9 (p. 593).
10) StL-Misc. 20 (1998), no. 84 (Bonell).
11) L. Rademacher in Jansen/Zimmermann, Art. 3:101 [PECL]: Scope of the Chapter, no. 2
(p. 596), with critical words on this technical provision because it does not mention
that exception.
12) Official Comments, Art. 2.2.1 no. 2, pp. 75-76; T. Krebs in Vogenauer, Art. 2.2.1 no. 10.
13) T. Krebs in Vogenauer, Art. 2.2.1 no. 8-9 (reverting, for the case of tort, to Art. 3.2.8 on
contract avoidance and to applicable national law).
14) Official Comments, Art. 2.2.1 no. 5, pp. 76-77; L. Rademacher in Jansen/Zimmermann,
Art. 3:101 [PECL] Scope of the Chapter, no. 4 (p. 598).
15) See L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 7 (p. 612).
16) Official Comments, Art. 2.2.1 no. 5, p. 76.
17) See T. Krebs in Vogenauer, Art. 2.2.1 no. 15.
18) Official Comments, Art. 2.2.1 no. 5 at p. 77; L. Rademacher in Jansen/Zimmermann, Art.
3:101 [PECL]: Scope of the Chapter, no. 2 at p. 598 (welcoming the decision of the soft
law legislator “[g]iven the practical importance of statutory representation” as there
is “no reason” for different treatment of agency confered by statute “once the
relationship in question is established”).
19) Official Comments, Art. 2.2.1 no. 5 at p. 77.

33
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 20) See T. Krebs in Vogenauer, Art. 2.2.1 no. 1, 12; see L. Rademacher in
Jansen/Zimmermann, Art. 3:101 [PECL] Scope of the Chapter, no. 5 (pp. 598-599):
common law notions, but with different consequences as compared to English law.
21) OJ [1986] L 382/17; L. Rademacher in Jansen/Zimmermann, Introduction before Art.
3:101 [PECL], no. 9 (p. 593).
22) Official Comments, Art. 2.2.1 no. 3, p. 76.
23) T. Krebs in Vogenauer, Art. 2.2.1 no. 11.
24) See also Official Comments, Art. 2.2.1 no. 2, pp. 75-76.
1) The Hague Convention on the Law Applicable to Agency of 14 March 1978 permits the
choice of law in PoAs. The same is true for many other private international laws of
jurisdictions which, like Germany (see Art. 8 of the German Introductory Law to the
German Civil Code – Einführungsgesetz zum Bürgerlichen Gesetzbuch “EGBGB”,
introduced in 2017), are not party to the Convention.
2) T. Krebs in Vogenauer, Art. 2.2.2 no. 5.
3) Counter-example to T. Krebs in Vogenauer, Art. 2.2.2 no. 4 (arguing that
communication to a third party can only found apparent authority, Art. 2.2.5 (2)).
4) T. Krebs in Vogenauer, Art. 2.2.2 no. 3; L. Rademacher in Jansen/Zimmermann, Art. 3:201
[PECL]: Express, Implied and Apparent Authority, no. 5 (pp. 611-612).
5) Official Comments, Art. 2.2.2 no. 1, p. 78; T. Krebs in Vogenauer, Art. 2.2.2 no. 4; Bonell
in: Hartkamp (Ed.), pp. 515, 520; see L. Rademacher in Jansen/Zimmermann, Art. 3:201
[PECL]: Express, Implied and Apparent Authority, no. 4 (p. 611) on a divergent picture
of the national laws in Europe.
6) StL-Misc. 21 (1999), no. 93 referencing legal concepts in the Arab world (El Kholy).
7) L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 2 (p. 610).
8) Official Comments, Art. 2.2.2 no. 2, pp. 78-79 (with Illustration 2, p. 79).
9) See example given by T. Krebs in Vogenauer, Art. 2.2.2 no. 10.
10) T. Krebs in Vogenauer, Art. 2.2.2 no. 11 (“shop assistant”, “shop manager”).
11) T. Krebs in Vogenauer, Art. 2.2.2 no. 11.
12) T. Krebs in Vogenauer, Art. 2.2.2 no. 12.
13) T. Krebs in Vogenauer, Art. 2.2.2 no. 6-7.
14) L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 6 (p. 612).
1) L. Rademacher in Jansen/Zimmermann, Art. 3:102 [PECL]: Categories of
Representation, no. 7 (p. 604); to follow the reasons for this assessment the reading of
the comparative survey ibid. no. 2-6 (pp. 601-604) as well as Art. 3:102 [PECL], no. 7 (p.
604) is highly recommended. In a nutshell, it appears that, in essence, common and
civil law courts will come out with similar decisions on the substance (ibid. no. 6 at p.
604; no. 10 (p. 606) with further references inter alia to Kötz) while the approach and
terminolgy differ substantially between the analysed continental European law
(using the agent’s intention as a starting point) and English law (“focusing on the third
party’s perception (or the perceptibility) of the agency relationship between agent
and principal”, ibid. no. 6 at p. 604). Following the approach of the 1983 (Geneva)
UNIDROIT Convention on Agency in the International Sale of Goods (→ Art. 2.2.1 no. 1),
art. 2.2.3(1) bridges between these concepts (“modelled on the English idea of
disclosed and undisclosed agency, distinguishing on the basis of whether the third
party knows or ought to have known from the circumstances that a relationship of
represenation exists between the agent and the principal”, ibid. no. 7 (p. 604).
2) T. Krebs in Vogenauer, Art. 2.2.3 no. 5.
3) See e.g. T. Krebs in Vogenauer, Art. 2.2.3 no. 7, 13; L. Rademacher in
Jansen/Zimmermann, Art. 3:102 [PECL]: Categories of Representation, no. 10 (p. 606).
4) Official Comments, Art. 2.2.3 no. 1, p. 79.
5) Enumeration based on T. Krebs in Vogenauer, Art. 2.2.3 no. 15.
6) Official Comments, Art. 2.2.3 no. 2, Illustration 1, p. 80; cf. T. Krebs in Vogenauer, Art.
2.2.3 no. 10 (agent ‘drops out of the picture’ after the contract conclusion).
7) L. Rademacher in Jansen/Zimmermann, Art. 3:301 [PECL]: Intermediaries not Acting in
the Name of a Principal, no. 1 (p. 637); T. Krebs in Vogenauer, Art. 2.2.3 no. 10.
8) T. Krebs in Vogenauer, Art. 2.2.3 no. 11.
9) Official Comments, Art. 2.2.3 no. 4, p. 81; StL-WP. 1 (2000), p. 3 (referencing commission
agents under some domestic laws).
10) Bonell, Chapter 22 ‘Agency’, in Hartkamp et al. (eds.), Towards a European Civil Code,
pp. 515, 524 and there footnote 54, as convincingly cited by T. Krebs in Vogenauer, Art.
2.2.3 no. 3 (with critical observations in no. 3-4). As noted in the Official Comments,
Art. 2.2.3 no. 4 (Illustration 7), p. 81 and by L. Rademacher in Jansen/Zimmermann, Art.
3:102 [PECL]: Categories of Representation, no. 12 (pp. 607-608), actions of an ‘agent’
who does not act ‘with the consent of the principal’ as its repesentative, but who
violates its agreement with the principal and acts on its own – and not for the
principal – falls outside the scope of the section on ‘agency’ (as observed by
Rademacher, ibid., “a contractual relation arises between the agend and third party”).
If the contract between the agent and the principal is governed by the Unidroit
Principles, the Principal may have a claim under Art. 7.4.1 for non-performance of the
agency agreement.)
11) T. Krebs in Vogenauer, Art. 2.2.3 no. 12.

34
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 12) On the demarcation line between the two provisions T. Krebs in Vogenauer, Art. 2.2.3
no. 13.
1) Official Comments, Art. 2.2.4 no. 1, p. 82.
2) StL-Misc. 23 (2001), no. 13 (Bonell). For an explanation see T. Krebs in Vogenauer, Art.
2.2.4 no. 1-2 (with reference to Art. 3:102 (2) PECL for the civil law; and with an
explanation why the common law doctrine of the undisclosed principal was ruled out
for international cases) and no. 15; L. Rademacher in Jansen/Zimmermann, Art. 3:301
[PECL]: Intermediaries not Acting in the Name of a Principal, no. 1 (p. 637). From
today’s perspective, it may be added that the road chosen by the Working Group for
international agency correlates better with modern requirements of anti-
moneylaundry law.
3) T. Krebs in Vogenauer, Art. 2.2.4 no. 5-6; cf. also Bennett, Unif. Law Rev. 2006, pp. 771,
778; L. Rademacher in Jansen/Zimmermann, Art. 3:302 [PECL]: Intermediary’s
Insolvency or Fundamental Non-performance to Principal, no. 8 (p. 642); on diverging
approaches in both English law (where “the undisclosed principal acquires the right
to sue the third party” according to the “doctrine of the undisclosed principal”) and
in some continental laws (like the action oblique under Art. 1199 sentence 2, 1341-1
French Code civil) see ibid., no. 5-6 (pp. 640-641).
4) E.g. Art. 7:420 (1) of the Dutch Civil Code which grants an action to the principal
against the third party inter alia in case of insolvency of the intermediary; see T. Krebs
in Vogenauer, Art. 2.2.4 no. 7-8 (with a further reference to the 1997 Belgian
Bankruptcy Code in no. 9) and L. Rademacher in Jansen/Zimmermann, Art. 3:302
[PECL]: Intermediary’s Insolvency or Fundamental Non-performance to Principal, no.
6 (p. 641).
5) L. Rademacher in Jansen/Zimmermann, Art. 3:301 [PECL]: Intermediaries not Acting in
the Name of a Principal, no. 1 (p. 637).
6) See L. Rademacher in Jansen/Zimmermann, Art. 3:303 [PECL]: Intermediary’s
Insolvency or Fundamental Non-performance to Third Party, no. 2 (p. 646) referencing
to this principle in the context of explaining why German law, intially granting some
enrichment claim to the third party, has abolished this approach over time.
7) It was based on the US case Grinder v. Bryans Road Bldg. and Supply Co., 432 A.2d 453
(Md. App. 81), see StL-Misc. 23 (2001), no. 13 (Bonell) with further reference to Italian
and German law.
8) Argumentum ‘such’ an agent (i.e. an agent acting ‘within the scope of its authority’), as
rightly pointed out by T. Krebs in Vogenauer, Art. 2.2.4 no. 11, 14.
9) T. Krebs in Vogenauer, Art. 2.2.4 no. 12.
10) Correct observation by T. Krebs in Vogenauer, Art. 2.2.4 no. 13.
11) T. Krebs in Vogenauer, Art. 2.2.4 no. 13.
12) Official Comments, Art. 2.2.4 no. 3 and Illustration 2, p. 83; L. Rademacher in
Jansen/Zimmermann, Art. 3:302 [PECL]: Intermediaries not Acting in the Name of a
Principal, no. 8 (p. 642) with a discussion of the history of Art. 2.2.4 (including the
consent of participating English lawyers) and the deviation both with regard to
English law and continental law (summarised at pp. 640-641, no. 5 and 6); and ibid.
Art. 3:303 [PECL]: Intermediary’s Insolvency or Fundamental Non-performance to
Third Party, no. 3 (pp. 646-647) with reference to the underlying and inspiring US case
Grinder v Bryans Road Building Supply Co 432 A2d 453 (Md App 1981) and the English
case Watteau v Fenwick [1893] 1 QB 346.
13) T. Krebs in Vogenauer, Art. 2.2.4 no. 14.
14) L. Rademacher in Jansen/Zimmermann, Art. 3:303 [PECL]: Intermediary’s Insolvency or
Fundamental Non-performance to Third Party, no. 3 in fine at p. 647.
15) Inspired by the discussion of Dutch law on insolvency of the intermediary at L.
Rademacher in Jansen/Zimmermann, Art. 3:302 [PECL]: Intermediary’s Insolvency or
Fundamental Non-performance to Principal, no. 6 (p. 641).
1) E.g. Art. 3:61 (3) Dutch Civil Code, first referred to by T. Krebs in Vogenauer, Art. 2.2.5
no. 7 note 85.
2) Cf. e.g. T. Krebs in Vogenauer, Art. 2.2.5 no. 1.
3) Official Comments, Art. 2.2.5 no. 1 and Illustration 1, p. 84.
4) . Cf. L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 11 note 41 at p. 615: “expendable.”
5) Official Comments, Art. 2.2.5 no. 2, pp. 84-85; T. Krebs in Vogenauer, Art. 2.2.5 no. 3.
6) Official Comments, Art. 2.2.5 no. 2 and Illustrations 2-3, pp. 84-85. For the discussion
to what extent apparent authority is ‘actual’ authority see the summary by T. Krebs in
Vogenauer, Art. 2.2.5 no. 3; L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]:
Express, Implied and Apparent Authority, no. 8-11, especially no. 11 (pp. 613-615).
7) Cf. T. Krebs in Vogenauer, Art. 2.2.2 no. 9.
8) Subject to claims of the principal against the agent which are beyond the scope of
the Unidroit Principles, T. Krebs in Vogenauer, Art. 2.2.5 no. 20, except, of couse, for
the scenario that the principal and the agent have contracted under Unidroit
Principles and the agent has therefore acted under a contract governed by the
Unidroit Principles.
9) T. Krebs in Vogenauer, Art. 2.2.5 no. 19.
10) T. Krebs in Vogenauer, Art. 2.2.5 no. 5.
11) For numerous examples see T. Krebs in Vogenauer, Art. 2.2.5 no. 7-14.
12) T. Krebs in Vogenauer, Art. 2.2.5 no. 8.
13) T. Krebs in Vogenauer, Art. 2.2.5 no. 9.

35
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 14) Cf. T. Krebs in Vogenauer, Art. 2.2.5 no. 10 (with an example).
15) For an extreme counter example based on the English case First Energy (U.K.) Limited
v Hungarian International Bank Limited [1993] 2 Lloyds Rep 194; see T. Krebs in
Vogenauer, Art. 2.2.5 no. 15-16 (no authority to conclude a contract but authority to
communicate the approval of the Principle).
16) T. Krebs in Vogenauer, Art. 2.2.5 no. 17 (with reference to the tenor of the discussion of
the Working Group in 1999).
17) T. Krebs in Vogenauer, Art. 2.2.5 no. 18.
18) Official Comments, Art. 2.2.5 no. 2, pp. 84-85; T. Krebs in Vogenauer, Art. 2.2.5 no. 2; L.
Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and Apparent
Authority, no. 11 at p. 615.
19) L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 11 at p. 615.
20) L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 11 (p. 615).
21) E.g. § 35 subpara. 1 sentence 1 of the German law on limited liability companies
(GmbHG) which does not permit limitations (§ 37 subpara. 2 sentence 1 GmbHG).
22) E.g. § 15 subpara. 2 sentence 1 German Commercial Law (HGB).
23) See e.g. for Europe Art. 3 (7) subsections 2 and 3 of the directive 2009/101/EC of the
European Parliament and of the Council of 16 September 2009 on coordination of
safeguards which, for the protection of the interests of members and third parties,
are required by Member States of companies within the meaning of the second
paragraph of Article 48 of the Treaty, with a view to making such safeguards
equivalent (Company Law Directive 2009), OJ L 258 p. 11, as noted by L. Rademacher in
Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and Apparent Authority, no.
11 (p. 615).
24) See e.g. for Europe Art. 3 (7) subsection 2: “unless the company proves that they [i.e.
the third parties] had knowledge of the texts deposited in the file or entered in the
register”; or § 15 subpara. 3 HGB for Germany.
25) L. Rademacher in Jansen/Zimmermann, Art. 3:201 [PECL]: Express, Implied and
Apparent Authority, no. 11 at p. 615.
26) Except for (rare) errors of the commercial register, covered in the European directive
by Art. 3 (7) subsections 2 and, accordingly, in the German example, by § 15 subpara. 3
HGB.
27) Once the position is registered, except for extremely rare cases of fraud (see e.g. for
Germany BGH, Judgment from 17 May 1988 – VI ZR 233/87, NJW 1989, 26 et seq. on
‘misuse of power’ in case of corruption), it is of no relevance whatsoever whether or
not the company initiated the registration on the basis of proper internal approvals.
This issue comes up once in a while in English disputes over a contract under English
contract law with German parties (see e.g. UBS AG, London Branch & Anor v
Kommunale Wasserwerke Leipzig GmbH, Queen’s Bench Division (Commercial Court)
15 October 2010, [2010] EWHC 2566 (Comm) (Gloster J) at no. 44-49.
28) See the overview by T. Krebs in Vogenauer, Art. 2.2.5 no. 11-14.
1) Convention on Agency in the International Sale of Goods; see vote of the Working
Group to follow the approach of Art. 16 by providing for expectation interest rather
than reliance interest StL-Misc. 22 (2000), no. 863; Study L-WP.1 (2000), p. 7.
2) StL-Misc. 21 (1999), no. 143 (Bonell); for an overview see T. Krebs in Vogenauer, Art. 2.2.6
no. 1 (close to English, US, Dutch and Swedish law, providing for less restrictions than
e.g. French, Italian or German law) and L. Rademacher in Jansen/Zimmermann, Art.
3:204 [PECL]: Agent Acting without or outside its Authority, no. 1 (pp. 618-619): on the
developments towards a rule in continental Europe (e.g. in 2005 in Austria, § 1019
ABGB), while English law operates with an implicit “warrant of authority towards the
third party”. See further H. Bennett, Unif. Law Rev. 2006, pp. 771, 786 (with references
to English law).
3) Official Comments, Art. 2.2.6 no. 1 and Illustration 1, p. 86; L. Rademacher in
Jansen/Zimmermann, Art. 3:204 [PECL]: Agent Acting without or outside its Authority,
no. 3 on the principle of strict liability (pp. 619-620) and no. 5 on the compromise
character of the measure of damage with regard to different national laws.
4) T. Krebs in Vogenauer, Art. 2.2.6 no. 1 note 112 pertinently contrasts German law which
gives the third party a choice to alternatively require performance from the false
agent (§ 179 (1) BGB).
5) L. Rademacher in Jansen/Zimmermann, Art. 3:204 [PECL]: Agent Acting without or
outside its Authority, no. 2 (p. 619).
6) Enumeration based on summary of T. Krebs in Vogenauer, Art. 2.2.6 no. 2.
7) T. Krebs in Vogenauer, Art. 2.2.6 no. 4.
8) Official Comments, Art. 2.2.6 no. 2, Illustration 2, p. 86; T. Krebs in Vogenauer, Art. 2.2.6
no. 8 and no. 6-7; L. Rademacher in Jansen/Zimmermann, Art. 3:204 [PECL]: Agent
Acting without or outside its Authority, no. 4 (p. 620).
9) L. Rademacher in Jansen/Zimmermann, Art. 3:204 [PECL]: Agent Acting without or
outside its Authority, no. 4 (p. 620).
10) T. Krebs in Vogenauer, Art. 2.2.6 no. 6.
1) T. Krebs in Vogenauer, Art. 2.2.7 no. 6; L. Rademacher in Jansen/Zimmermann, Art. 3:205
[PECL]: Conflict of Interests, no. 1 (p. 622) and ibid. Ar.t 3:209 [PECL]: Duration of
Authority, no. 1 (p. 634).

36
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 2) See the examples given in Official Comments, Art. 2.2.7 no. 1, p. 87; T. Krebs in
Vogenauer, Art. 2.2.7 no. 7; L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]:
Conflict of Interests, no. 2 (pp. 622-623). emphasising that the Working Group had
considered these scenarios at StLMisc. 21 (1999), no. 161-172; and that “an exhaustive
typology seems futile”.
3) Similar advice by T. Krebs in Vogenauer, Art. 2.2.7 no. 9 (‘best course of action’).
4) E.g. on self-contracting, like German § 181 BGB or Art. 235 Greek Civil Code; T. Krebs in
Vogenauer, Art. 2.2.7 no. 5; L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]:
Conflict of Interests, no. 2 at p. 623 with further examples from Austria, Italy,
Netherlands, Switzerland.
5) StL-Doc. 56 (1998), pp. 1 and 16; and StL-Misc. 21 (1999), no. 156; T. Krebs in Vogenauer,
Art. 2.2.7 no. 5; L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of
Interests, no. 1-7 (pp. 621-625) whereby Art. 3:205 PECL has included an explicit
presumption of conflcit of interest “in cases of self-dealing and double agency”
(emphasis added).
6) T. Krebs in Vogenauer, Art. 2.2.7 no. 5 (with references e.g. to common law, and to the
laws in France, Italy and Portugal); L. Rademacher in Jansen/Zimmermann, Art. 3:205
[PECL]: Conflict of Interests, no. 5 (pp. 624-625): Correlation with the laws in e.g.
England, France, Italy while other laws including e.g. Dutch, German or Swiss law
provide for automatic avoidance.
7) L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of Interests, no. 3 (p.
624).
8) L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of Interests, no. 4 (p.
624).
9) Again L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of Interests,
no. 4 (p. 624).
10) T. Krebs in Vogenauer, Art. 2.2.7 no. 7, see also no. 3 (a ‘sliding scale of seriousness’).
11) T. Krebs in Vogenauer, Art. 2.2.7 no. 7.
12) T. Krebs in Vogenauer, Art. 2.2.7 no. 10 (referring to estate agents representing a large
number of sellers and buyers).
13) T. Krebs in Vogenauer, Art. 2.2.7 no. 4.
14) L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of Interests, no. 5 at
p. 625.
15) Official Comments, Art. 2.2.7 no. 3, p. 88.
16) T. Krebs in Vogenauer, Art. 2.2.7 no. 10.
17) Official Comments, Art. 2.2.7 no. 4 and Illustration 5, pp. 88-89; T. Krebs in Vogenauer,
Art. 2.2.7 no. 9; L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of
Interests, no. 6 note 36 (p. 625).
18) Official Comments, Art. 2.2.7 no. 5, p. 89.
19) L. Rademacher in Jansen/Zimmermann, Art. 3:205 [PECL]: Conflict of Interests, no. 7 (p.
625).
1) StL-Doc. 56 (1998), p. 17; and StL-Misc. 21 (1999), no. 179 (Bonell).
2) Delegata potestas non potest delegari, i.e. delegated powers cannot be further
delegated.
3) Cf. Official Comments, Art. 2.2.8 no. 2, Illustration 1, p. 90; T. Krebs in Vogenauer, Art.
2.2.8 no. 1; L. Rademacher in Jansen/Zimmermann, Art. 3:206 [PECL]: Subagency, no. 1
(p. 626): “for reasons of efficiency and suitablity”.
4) T. Krebs in Vogenauer, Art. 2.2.8 no. 7 and note 146.
5) Official Comments, Art. 2.2.8 no. 2, pp. 89-90; StL-Misc. 21 (1999), no. 189
(Schlechtriem).
6) T. Krebs in Vogenauer, Art. 2.2.8 no. 3, 5.
7) T. Krebs in Vogenauer, Art. 2.2.8 no. 2, 4; see Official Comments, Art. 2.2.8 no. 2
Illustration 2, p. 90.
8) T. Krebs in Vogenauer, Art. 2.2.8 no. 6.
9) T. Krebs in Vogenauer, Art. 2.2.8 no. 8.
10) Official Comments, Art. 2.2.8 no. 3, p. 90; L. Rademacher in Jansen/Zimmermann, Art.
3:206 [PECL]: Subagency, no. 2-4 (pp. 626-627).
11) T. Krebs in Vogenauer, Art. 2.2.8 no. 9-10, 11.
12) T. Krebs in Vogenauer, Art. 2.2.8 no. 11.
13) T. Krebs in Vogenauer, Art. 2.2.8 no. 12 quoting the decision of German Federal
Supreme Court dated 25 May 1977, VIII ZR 18/76, BGHZ 68, pp. 391-397.
1) Official Comments, Art. 2.2.9 no. 2, p. 92; T. Krebs in Vogenauer, Art. 2.2.9 no. 5; L.
Rademacher in Jansen/Zimmermann, Art. 3:207 [PECL]: Ratification by Principal, no. 4
(p. 630): no tailoring of the scope of ratification.
2) Unidroit (Geneva) Convention on Agency in the International Sale of Goods of 17
February 1983, at [Link]
[Link] [last visited on 9 January 2023], see StL-WP. 1 (2000), p. 8.
3) L. Rademacher in Jansen/Zimmermann, Art. 3:207 [PECL]: Ratification by Principal, no.
1 at p. 628: “all legal systems” whereby the book focusses on Europe.
4) T. Krebs in Vogenauer, Art. 2.2.9 no. 13-18; L. Rademacher in Jansen/Zimmermann, Art.
3:207 [PECL]: Ratification by Principal, no. 1 (pp. 628-629).

37
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 5) This is a practice sometimes observed in Germany when lawyers or other
representatives act on behalf of a principal in front of a German notary in
circumstances where they cannot reach a client. Usually the client is aware of the
contract conclusion as such, but does not know about details as they develop during
the negotiations. Often this tool is also used when the documentation of a power of
attorney from a foreign company is not sufficient. T. Krebs in Vogenauer, Art. 2.2.9 no. 3
discusses the extreme case that the principal is not yet properly created as a
company.
6) 6 Official Comments, Art. 2.2.9 no. 1, p. 91; T. Krebs in Vogenauer, Art. 2.2.9 no. 8-9; L.
Rademacher en/Zimmermann, Art. 3:207 [PECL]: Ratification by Principal, no. 2 (p.
629).
7) Official Comments, Art. 2.2.9, Illustration at pp. 91-92; T. Krebs in Vogenauer, Art. 2.2.9
no. 10.
8) Discussion by T. Krebs in Vogenauer, Art. 2.2.9 no. 11.
9) For an extreme case where the circumstances (including a direct communication line
between the principal and the third party) imply a duty to speak up and tell the third
without delay that the principal refuses to be bound (analogy to Art. 2.2.5 (2)) see T.
Krebs in Vogenauer, Art. 2.2.9 no. 12.
10) T. Krebs in Vogenauer, Art. 2.2.9 no. 4 (opposing a requirement of ‘full knowledge of
the material circumstances’ drawn from US and English law).
11) L. Rademacher in Jansen/Zimmermann, Art. 3:207 [PECL]: Ratification by Principal, no.
2 at p. 629.
12) Official Comments, Art. 2.2.9 no. 3, p. 92.
13) Official Comments, Art. 2.2.9 no. 3, p. 92.
14) See L. Rademacher in Jansen/Zimmermann, Art. 3:208 [PECL]: Third Party’s Right with
Respect to Confirmation of Authority, no. 1 (p. 631-632).
15) See L. Rademacher in Jansen/Zimmermann, Art. 3:208 [PECL]: Third Party’s Right with
Respect to Confirmation of Authority, no. 1 (p. 631); and Art. 3:207 [PECL]: Ratification
by Principal, no. 1 at p. 628, referencing to the principal’s “opportunity to speculate
on the market” with regard to the possibility of ratification..
16) Official Comments, Art. 2.2.9 no. 4, p. 92.
17) For a detailed discussion coping with English law inspired critcism see T. Krebs in
Vogenauer, Art. 2.2.9 no. 15-17 and, objecting the criticism, L. Rademacher in
Jansen/Zimmermann, Art. 3:208 [PECL]: Third Party’s Right with Respect to
Confirmation of Authority, no. 2 (p. 632), arguing in essence that market speculation
(until ratification pursuant to para. 1 or a refusal pursuant to para. 3) can be made by
either side; and both the principal and the third party can end speculation
unilaterally by taking action under Art. 2.2.9.
1) Official Comments, Art. 2.2.10 no. 1, p. 93; T. Krebs in Vogenauer, Art. 2.2.10 no. 1.
2) L. Rademacher in Jansen/Zimmermann, Art. 3:209 [PECL]: Duration of Authority, no. 1
(p. 634).
3) L. Rademacher in Jansen/Zimmermann, Art. 3:209 [PECL]: Duration of Authority, no. 3
(pp. 635-636) on ‘irrevocable’ authorisation and connected exposure to the third
party in case that the principal nonetheless revokes the authority.
4) Official Comments, Art. 2.2.10 no. 2, pp. 93-94. See L. Rademacher in
Jansen/Zimmermann, Art. 3:209 [PECL]: Duration of Authority, no. 2 (pp. 634-635) on
protection only of third parties who relied on an existing authority.
5) For a more detailed and concerned discussion see T. Krebs in Vogenauer, Art. 2.2.10
no. 3-5 (underlining the vicinity of para. 1 to Art. 2.2.5 (2)).
6) Official Comments, Art. 2.2.10 no. 3 and Illustration 3, p. 94.
7) StL-Doc. 56 (1998), p. 21; See Unidroit Convention on Agency in the International Sale
of Goods of 17 February 1983, at [Link]
content/uploads/2021/06/agency-convention19 [Link] [last visited on 9 January
2023].
8) See e.g. Art. 3:73 Dutch Civil Code and T. Krebs in Vogenauer, Art. 2.2.10 no. 7 (referring
to the notion of negotiorum gestio (gestion d’affaires, Geschäftsführung ohne Auftrag)).
9) Generally for a narrow interpretation in case of termination by revocation: L.
Rademacher in Jansen/ Zimmermann, Art. 3:209 [PECL]: Duration of Authority, no. 4 (p.
636).

© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.

Kluwer Arbitration is made available for personal use only. All content is protected by copyright and other intellectual property
laws. No part of this service or the information contained herein may be reproduced or transmitted in any form or by any means, or
used for advertising or promotional purposes, general distribution, creating new collective works, or for resale, without prior
written permission of the publisher.

If you would like to know more about this service, visit [Link] or contact our Sales staff at lrs-
sales@[Link] or call +31 (0)172 64 1562.

38
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 KluwerArbitration

39
© 2023 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.