| ||1. Contracts as a rule not subject to formal requirements
This Article states the principle that the conclusion of a contract is not subject to any requirement as to form. The same principle also applies to the subsequent modification or termination of a contract by agreement of the parties.
The principle, which is to be found in many, although not in all, legal systems, seems particularly appropriate in the context of international trade relationships where, thanks to modern means of communication, many transactions are concluded at great speed and by a mixture of conversations, telefaxes, paper contracts, e-mail and web communication.
The first sentence of the Article takes into account the fact that some legal systems regard requirements as to form as matters relating to substance, while others impose them for evidentiary purposes only. The second sentence is intended to make it clear that to the extent that the principle of freedom of form applies, it implies the admissibility of oral evidence in judicial proceedings.
2. Statements and other unilateral acts
The principle of no requirement as to form applies also to statements and other unilateral acts. The most important such acts are statements of intent made by parties either in the course of the formation or performance of a contract (e.g. an offer, acceptance of an offer, confirmation of the contract by the party entitled to avoid it, determination of the price by one of the parties, etc.), or in other contexts (e.g. the grant of authority by a principal to an agent, the ratification by a principal of an act performed by an agent without authority, the obligor’s acknowledgement of the obligee’s right before the expiration of the general limitation period, etc.).
3. Possible exceptions under the applicable law
The principle of no requirement as to form may of course be overridden by the applicable law (see Article 1.4). National laws as well as international instruments may impose special requirements as to form with respect either to the contract as a whole or to individual terms (e.g. arbitration agreements; choice of court agreements).
4. Form requirements agreed by the parties
Moreover, the parties may themselves agree on a specific form for the conclusion, modification or termination of their contract or for any other statement they may make or unilateral act they may perform in the course of the formation or performance of their contract or in any other context. In this connection see, in particular, Articles 2.1.13, 2.1.17 and 2.1.18.