Formation Of International Contracts
| Published date | 01 March 1979 |
| DOI | http://doi.org/10.1111/j.1468-2230.1979.tb01523.x |
| Date | 01 March 1979 |
FORMATION
OF
INTERNATIONAL
CONTRACTS
I.
TIIE
PROBLEM
THE
rules of English conflict of laws as to which system of law
governs
a
contract which possesses an international element are
quite well settled.' This is not the case, however, if the question to
be decided is which system of law, according to English conflict
rules, determines whether a valid contract has come into being. Let
us
posit
A,
resident in country
I,
negotiating with
B,
resident in
country
11.
Which system
of
law is to determine whether their
negotiations have resulted in a contract which can be sued on in
English courts? The problems can be numerous: the law of
country
I,
or country
I1
or of England,
if
England is not one of the
countries involved, might hold that there is no contract because
there has not been sufficient communication of agreement, or
because some legal element of contract,
e.g.
consideration, is
missing, or because the agreement is regarded as vitiated because
the parties operated under a mistake or because there was fraud.
The other system(s)
of
law may come to the opposite conclusion;
which is to govern?
There is only one direct judicial authority on this question:
Albeko Schuhmaschinen AG
v.
The Kamborian Shoe Machine
Co.
Ltd.2
In
The Kamborian Shoe Machine
case the defendant, an
English company, offered to appoint the plaintiff,
a
Swiss company,
as its agents for the sale and distribution of certain shoe-making
machinery. The question for the court was whether that offer had
resulted in
a
contract. The defendant never received an acceptance
of
its offer. The plaintiff alleged that it had posted an acceptance.
By
English law the posting of the letter of acceptance constituted
an acceptance. Under Swiss law, howevcr, no contract came into
being until the letter of acceptance was received by the offeror.
Salmon
J.
found as a matter of fact that
no
letter
of
acceptance had
been posted. Therefore the problem of whether English or Swiss
law governed the formation of this contract did not arise. His Lord-
ship considered, however, what the position would have been
if
the
letter had been posted. The report reads
8:
''
Though the finding that the posting of the letter
of
accept-
ance was not established sufficed to dispose
of
the case Salmon
J.,
expressed the following view on the assumption that the
letter
of
acceptance was posted-that the proper law of the
contract was Swiss law, as the offer was communicated in
1
See
J.
H.
C.
Morris (ed.), Dicey and Morris,
The
Conflict
of
Laws
(9th
ed.),
a
(1961)
111
L.J.
519;
hereafter referred
to
as
The
Kambon'att
Shoe
Machine
r.
146
at
pp.
721
ef
seq.;
hereafter referred
to
as
Dicey
and
Morris.
case.
8
Ibid.
169
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