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transnational law transnational law (lex mercatoria or international business law) and "Inclusion of standard terms" 2016-03-01 13:58:16 https://www.trans-lex.org/img/logo_ball.png
Principle

No. IV.3.2 - Inclusion of standard terms

(a) Standard terms are included in a contract by agreement of the parties pursuant to the rules laid down in Sections 2 and 5 of this Chapter, provided that the party that wants to conclude the contract under standard terms has referred to them in accordance with subsections (b) and (c), and the other party had a reasonable opportunity to take notice of the contents of the standard terms as provided for in (d).

(b) A reference to the inclusion of standard terms and the standard terms themselves must be clear to a reasonable person of the same kind as the other party and in the same circumstances.

(c) A reference to the inclusion and the standard terms will be regarded to be clear where:

i)

they are readable and understandable by a reasonable person; and

ii)

they are available in a language that the other party could reasonably be expected to understand. Such a language includes the language of the negotiated part of the contract, the negotiations or the language ordinarily used by that party.

(d) Amongst others, a party is deemed to have had a reasonable opportunity to take notice of the standard terms:

i)

where the terms are attached to a document used in connection with the formation of the contract or printed on the reverse side of that document;

ii)

where the terms are available to the parties in the presence of each other at the time of negotiating the contract;

iii)

where, in electronic communications, the terms are made available to and retrievable electronically by that party and are accessible to that party at the time of negotiating the contract;

iv)

where the parties have had prior contracts subject to the same standard terms.

(e) Standard terms cannot be included in a contract after the formation of the contract, unless the contract is modified by agreement of the parties in accordance with subsection (a).

(f) Standard terms can be included in a contract without agreement if the parties have established a common practice during their business relationship to conclude contracts only under these standard terms, or if the standard terms are trade usages pursuant to Principle I.2.2.

Commentary
1 As a general rule, standard terms become part of the contract when the parties agree on their inclusion. The formation of this agreement follows the general rules on contract conclusion in Section 2 and on the interpretation of the parties' declarations of will in Section 5 of Chapter IV of these Principles (Subsection (a)).

2 A party's intention to have standard terms included in the contract must be communicated to the other side in its offer or acceptance. The party must refer to the standard terms in the text of the offer or acceptance in a way that a reasonable party of the same kind as the other side and in the same circumstances understands that its counter-party wants to contract under these standard terms (Subsections (b) and (c) i)).

3 The reference to the standard terms and the standard terms themselves must be expressed in the language of the contract, or of the contract negotiations, or in the language ordinarily used by the other side (Subsection (c) ii)). If the reference is written in the English language even though English is neither the language of the contract, nor the contract negotiations, nor the language ordinarily used by the other side, the reference may still be considered as valid since English is the lingua franca of international business. Businessmen involved in cross-border trade can be expected to have a basic knowledge of English, so that the standard terms are formulated in a language that the other party can reasonably be expected to understand pursuant to Subsection (c) (ii). Depending on their length and complexity, these considerations also apply to the text of the standard terms.

4 The acceptance of the other side to the inclusion of the standard terms pursuant to Principle IV.2.1 (a) must be such that a reasonable party of the same kind as the party offering to contract under its standard terms understands that its counter-party accepts to contract under these standard terms. Whether silence amounts to a tacit acceptance of the inclusion of the standard terms pursuant to Principle IV.2.2 (b) depends on the circumstances of the case.

5 It is not necessary that the other party knows the content of the standard terms when the contract is concluded, signs them, or issues a specific confirmation of their relevance for the contract before it agrees to their inclusion into the contract. Instead, that party must get a reasonable opportunity to take notice of their contents pursuant to Subsection (a). Whether that opportunity is reasonable or not depends on the circumstances of the case, including the length of the standard terms and whether they are legible or not. Subsection (d) contains a non-exhaustive list of circumstances when a party is deemed to have had a reasonable opportunity to take notice of the standard terms.

6 If the text of the standard terms is reproduced on the backside of a form containing an offer or acceptance, satisfying the requirement of Subsection (d) i), but that form does not have a reference to these terms on its front side pursuant to Subsection (b), the terms are usually not made part of the offer. If the text of an email refers to standard terms which are attached to that email or for which a download link is contained in the text of that email, the terms are made part of the offer or acceptance (Subsection (d) iii)).

7 The requirement established by some national courts and the CISG Advisory Council in its Opinion No. 13 for contracts governed by the CISG that the party that wants to contract under standard terms must proactively provide the other side with the text of the standard terms, seems overstretched in light of the presumption of professional competence of international businessmen (Principle I.2.3) and the fact that standard terms are frequently used in international business. Both the presumption and the standard practice in international business impose a duty on the other side to request the text of the standard terms if he is confronted with a request to have them included in the contract but is not familiar with them, rather than a transmittal obligation on the party that intends to conclude the contract under standard terms.

8 Pursuant to Principle IV.2.6 (a) a reply to an offer which purports to be an acceptance, but refers to standard terms, is a rejection of the offer and constitutes a counter-offer that needs to be accepted by the other side. If both parties want to contract under their respective standard terms, Principle IV.3.4 (b) applies.

9 Standard terms can be included in a contract even without an agreement of the parties in two distinct scenarios pursuant to Subsection (f).

10 In the first scenario, standard terms are included into a contract without agreement of the parties if the parties have established a common practice (Principle I.2.2) during their business relationship to conclude contracts only under these standard terms, provided that the terms were in fact validly included in their past contracts. The duration of the business relationship, the required number of contracts concluded during that period and the maximum time span between these contracts depends on the circumstances of the case, e.g. the industry concerned and the value of the individual contracts. In such a scenario, standard terms can be included into the contract without consent of the parties even if that practice was based on references to standard terms in invoices or delivery receipts which were submitted after contract conclusion, leading to an amendment of the previous contracts if the other sides has agreed to that procedure (Subsection (e)).    

11 In the second scenario, the standard terms have assumed the quality of trade usages in the industry in which the contract is concluded. Pursuant to Principle I.2.2 and absent an agreement to the contrary, the parties are considered to have impliedly included into their contract those standard terms of which they knew or ought to have known and which in international trade are widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned. This way of including standard terms into a contract without consent will usually apply only to standard terms issued by an international formulating agency or a trade organization, but not to standard terms formulated individually by one side.

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