(1) An offer becomes effective when it reaches the offeree.
(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.
1. When an offer becomes effective
Paragraph (1) of this Article, which is taken literally from Article 15 CISG, provides that an offer becomes effective when it reaches the offeree (see Article 1.10(2)). For the definition of “reaches” see Article 1.10(3). The time at which the offer becomes effective is of importance as it indicates the precise moment as from which the offeree can accept it, thus definitely binding the offeror to the proposed contract.
2. Withdrawal of an offer
There is, however, a further reason why it may in practice be important to determine the moment at which the offer becomes effective. Indeed, up to that time the offeror is free to change its mind and to decide not to enter into the agreement at all, or to replace the original offer by a new one, irrespective of whether or not the original offer was intended to be irrevocable. The only condition is that the offeree is informed of the offeror’s altered intentions before or at the same time as the offeree is informed of the original offer. By expressly stating this, paragraph (2) of this Article makes it clear that a distinction is to be drawn between “withdrawal” and “revocation” of an offer: before an offer becomes effective it can always be withdrawn whereas the question of whether or not it may be revoked (see Article 2.1.4) arises only after that moment.