References without law book default to BGB.

Case - Revocation of Offer

Facts

Andy (A) visits Theodor’s furniture store to buy a sofa. Theodor (T) highly recommends the couch “Sultan” and offers A a discounted price of EUR 1,100.

A wants to discuss the issue with his girlfriend (G) and leaves the store. A few days later, he succeeds in convincing G to go ahead with the purchase. He immediately writes an e-mail to T saying that he would buy the couch on the terms indicated. However, T replies that he can only offer a price of EUR 1,300 due to a recent price increase.

A thinks that EUR 1,300 is quite expensive. He writes back that he understands T’s position, but EUR 1,300 is too much. He would be willing to pay EUR 1,200 instead.

T agrees, but instead of replying, he instructs two employees to deliver the couch. The couch is delivered the next day.

Did A and T enter into a contract? And if so, when?

Solution

Slides Solution

• Issue: Is there a valid sale of goods contract according to § 433 BGB?
• Rule: A contract requires an offer, an acceptance, and, in each case, the intention to enter into a contract.
• Application: When do we have a corresponding offer and acceptance?
  • Exhibition of the sofa in the store as an offer? → (-), invitation to treat.
  • T’s recommendation as an offer? (EUR 1,100) → (+).
  • Acceptance by A in the store? (EUR 1,100) → (-).
  • A’s first email as acceptance? (EUR 1,100) → (-), acceptance too late (§ 150 I BGB) = new offer.
  • A’s first email as a (new) offer? (EUR 1,100) → (+), new offer (§ 150 I BGB).
  • Acceptance by T? → (-), stating of new price (EUR 1,300) = no acceptance + counteroffer, § 150 II BGB.
  • Acceptance by A? (EUR 1,300) → (-), stating of new price (EUR 1,200) = no acceptance + counteroffer, § 150 II BGB.
  • Acceptance by T? (EUR 1,200) → explicit DoI (-). Implicit DoI? → (+), instruction of employees to deliver the couch. With the receipt of the couch, A gets to know T’s acceptance.
• Conclusion: With the delivery, there is corresponding offer and acceptance. A contract was formed. → (+)

Write-Up

Issue: Did A and T enter into a valid sale of goods contract under § 433 BGB, and if so, when?

Rule: A valid contract requires two matching declarations of intent: an offer (§ 145 BGB) and an acceptance (§ 147 BGB).

Application:
We must trace the chronological sequence of declarations to determine when a matching offer and acceptance occurred.

1. In the Store
The exhibition of the sofa is an invitatio ad offerendum. T’s direct recommendation and offer of EUR 1,100, however, was a binding offer made to a person present (§ 147 I BGB). Offers made to a person present can only be accepted immediately. A did not accept it, but left the store. Thus, T’s offer expired.

2. A’s First Email
A few days later, A emailed T to buy the couch for EUR 1,100. Since T’s original offer had expired, A’s email constitutes a delayed acceptance. Under § 150 I BGB, a delayed acceptance is deemed to be a new offer.

3. T’s Reply (EUR 1,300)
T replied stating a price of EUR 1,300. Under § 150 II BGB, an acceptance containing modifications acts as a rejection of the offer coupled with a new offer (counteroffer).

4. A’s Second Email (EUR 1,200)
A replied that EUR 1,300 was too much and offered EUR 1,200. Again, under § 150 II BGB, this modified the terms and constituted a new counteroffer to buy the couch for EUR 1,200.

5. T’s Delivery
For a contract to be formed at EUR 1,200, T must accept A’s counteroffer. T did not reply with an explicit declaration of intent. However, T instructed his employees to deliver the couch. A declaration of intent can be made implicitly (konkludent). By fulfilling the requested contractual performance (delivery), T objectively manifested his intention to accept A’s offer. The acceptance became effective when the couch arrived at A, as A received the implicit declaration of acceptance at that moment.

Conclusion: A valid contract was formed for the price of EUR 1,200 at the moment the couch was delivered to A.