Formation and Interpretation of Contract

Abstract This chapter analyses the rules and principles governing the formation, modification, interpretation, and supplementation of international commercial contracts under the CISG and the PICC. It examines the classic offer-and-acceptance mechanism, including criteria for offers, acceptances, revocation, and termination, and addresses challenges such as standard terms, battle of forms, and electronic contracting. The chapter explores pre-contractual duties—such as confidentiality, good faith, and information obligations—and their treatment under different legal traditions and instruments. It also examines the interpretation of contracts through subjective and objective criteria, the role of surrounding circumstances, practices, usages, merger clauses, and the contra proferentem rule. Finally, it discusses how gaps in contracts are filled by reference to legal principles, practices and usages, highlighting the delicate balance between party autonomy, uniformity, and contextual factors in international trade.