- Metropolitan Court of Budapest
- MALEV Hungarian Airlines v. United Technologies International Inc. Pratt & Whitney Commercial Engine Business
APPLICATION OF CISG BASED ON CHOICE OF PARTIES (ART. 1 CISG)
APPLICABILITY OF CISG TO SALE OF AIRCRAFT ENGINES - SALE OF AIRCRAFT EXCLUDED (ART. 2(E) CISG) - SALE OF AIRCRAFT ENGINE INCLUDED
OFFER SUFFICIENTLY DEFINITE (ART. 14(1) CISG) - PRICE DETERMINED ONLY WITH RESPECT TO SOME OF ENGINES OFFERED - GOODS TO BE UNILATERALLY CHOSEN BY THE OFFEREE
ACCEPTANCE - MODIFIED ACCEPTANCE (ART. 19(2) CISG) - NOT MATERIAL MODIFICATION
In December 1990, in the frame of advanced negotiations relating to the sale of different aircraft engines, a US (Connecticut) seller made to a Hungarian buyer two simultaneous and alternative offers though without fixing the price for all of the engines offered. According to the terms of the proposals the buyer was enabled to choose among different enumerated aircraft engines and relative quantity. Later on the buyer informed the seller that he would accept in conformity with the above mentioned conditions. While the seller considered the contract to be concluded, according to the buyer this 'did not seem likely'.
In its offer the seller expressly referred to the Uniform Commercial Code as adopted in the State of Connecticut as the law governing the contract. However, in view of the buyer's objection to such a choice of law clause, the parties at trial agreed on CISG as the applicable law. The Court held that although CISG does not apply to the sale of aircraft (Art. 2(e) CISG), it does apply to the sale of single components of aircraft.
With respect to the two offers, the Court held that, in accordance with Art. 14(1) CISG, they were sufficiently definite, notwithstanding they granted the buyer the unilateral power in respect to its choice of the aircraft engines and relative quantity and they indicated the price of only some of the engines offered.
As to the argument that the letter of acceptance of the buyer containing modifications to the original offer constituted a counteroffer, the Court ruled that the mere request to treat the letter confidentially added by the buyer did not amount to a material modification of the offer and was therefore to be considered as part of the agreement in accordance with Art. 19(2) CISG.
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Original in Hungarian
Published in English (trans.):
- 13 Journal of Law and Commerce (1993), 49-77
Commented on by:
- P. Amato, U.N. Convention on Contracts for the International Sale of Goods. The Open Price Term and Uniform Application: An Early Interpretation by the Hungarian Courts, 13 Journal of Law and Commerce (1993), 1-29}}