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ACCA Applied Skills · Corporate and Business Law (Global) · Introduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms

Zentra Ltd (State A) emailed Boreal Co (State B) an offer to sell 500 tonnes of steel at a stated price, saying the offer would remain open until 30 June. Both states are CISG contracting states and the parties have not excluded the CISG. On 20 June Zentra emailed that it withdrew the offer. Boreal had not yet replied and had not relied on the offer. Which statement is correct under the CISG?

The offer cannot be revoked. Under the CISG an offer that states a fixed time for acceptance is treated as irrevocable, so Zentra's 20 June revocation is ineffective and Boreal can still accept until 30 June.

  1. AThe offer is revoked, because the revocation reached Boreal before it accepted
  2. BThe offer cannot be revoked, because it states a fixed time for acceptanceCorrect
  3. CThe offer lapses, because an offer under the CISG can only be withdrawn before it reaches the offeree
  4. DThe offer can be revoked only if Boreal consents to the revocation

Explanation

Under the CISG an offer may be revoked if the revocation reaches the offeree before they send an acceptance. However, revocation is not possible if the offer indicates, by stating a fixed time for acceptance or otherwise, that it is irrevocable. Zentra fixed 30 June, so the offer stays open. The first option wrongly ignores this exception.

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