Corporate and Business Law (Global) · Introduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms

Seller and Buyer Obligations and Remedies under CISG

Updated 11 October 2026 · Fact-checked

Under the CISG, the seller must deliver conforming goods, hand over documents and transfer property. The buyer must pay the price and take delivery. If a party breaches, the other may claim damages, require performance, reduce the price (buyer), or avoid the contract if the breach is fundamental.

Understand Seller and Buyer Obligations and Remedies under CISG

The CISG is the UN Convention on Contracts for the International Sale of Goods. It applies to sales of goods between parties whose places of business are in different states, where the rules are met. It sets out what each side must do and what the other side can do if they fail.

The seller has three core duties: deliver the goods, hand over any documents relating to them, and transfer the property in the goods. The goods must conform to the contract in quantity, quality, description and packaging. If the contract is silent, goods must be fit for the ordinary purposes of such goods, fit for any particular purpose made known to the seller (unless the buyer did not rely on the seller's skill), and packed in the usual way.

The buyer has two core duties: pay the price and take delivery. Taking delivery means doing the acts needed to let the seller deliver, and then taking over the goods. The buyer must also examine the goods promptly and give notice of any lack of conformity within a reasonable time, describing the defect. If the buyer fails to give notice in time, the buyer generally loses the right to rely on the lack of conformity. There is also a long-stop period of two years from handing over of the goods, unless the contract has a longer guarantee.

The remedies depend on the breach. Both sides may claim damages, which equal the loss suffered including loss of profit. Damages are limited to the loss the breaching party foresaw or ought to have foreseen as a possible consequence of the breach. Foreseeability is judged at the time the contract was concluded, in light of the facts then known or that ought to have been known. The buyer may require performance, may require repair of the goods unless that would be unreasonable, or may reduce the price where goods do not conform. The buyer may demand substitute goods only if the lack of conformity amounts to a fundamental breach (Art 46(2)). Either side may avoid the contract, which ends it, but generally only if the breach is fundamental. The exception is the extra period. The buyer may fix an additional period of reasonable length for the seller to perform (Art 47), and the seller may fix one for the buyer to perform (Art 63). If the seller does not deliver within the period, or the buyer does not pay or take delivery within it, the innocent party may avoid without proving a fundamental breach.

A breach is fundamental if it substantially deprives the other party of what it was entitled to expect under the contract, unless the breaching party did not foresee that result and a reasonable person would not have either. Avoidance is a last resort. For a minor breach, the innocent party keeps the contract and claims damages or a price reduction.

Key formulas to remember

Seller's core duties: Deliver goods + hand over documents + transfer property; Goods must conform in quantity, quality, description and packaging.
Buyer's core duties: Pay the price + take delivery; Buyer must also examine goods promptly and give notice of non-conformity.
Notice of non-conformity: Reasonable time after discovery (or when it ought to have been discovered); long-stop of two years from handing over; The notice must specify the nature of the lack of conformity. The long-stop does not apply if it conflicts with a longer contractual guarantee.
Fundamental breach: Breach that substantially deprives the other party of what it was entitled to expect; Not fundamental if the result was not foreseen by the breaching party and would not have been foreseen by a reasonable person in the same circumstances.
Damages: Loss suffered, including lost profit, up to the loss foreseen or foreseeable at contract formation; Available to either party. Damages can be claimed alongside other remedies.
Price reduction (buyer): Reduced price = contract price × (value of goods actually delivered ÷ value conforming goods would have had), both values at delivery; Buyer may not use it if the seller has cured the defect or the buyer refuses the seller's offer to cure.
Avoidance: Available on fundamental breach, or on failure to perform within an extra period fixed by the innocent party: the buyer fixes it for the seller (avoidance only for non-delivery); the seller fixes it for the buyer (avoidance for non-payment or failure to take delivery); Avoidance releases both parties from their obligations but does not remove liability for damages.

How to solve Seller and Buyer Obligations and Remedies under CISG questions

Use this method for any CISG question on obligations or remedies. It keeps you from jumping to avoidance too early.

1Confirm the CISG applies: sale of goods, parties in different states, and the contract has not excluded the Convention.
2Identify who is in breach: seller (delivery, conformity, documents, title) or buyer (payment, taking delivery).
3Check the facts against the duty. For conformity, compare the goods with the contract description, quantity, quality and packaging, then the default standards.
4For a buyer's claim about defects, check the notice: was it prompt, specific and within two years of handing over?
5Decide whether the breach is fundamental by asking whether the innocent party was substantially deprived of what it expected.
6Choose the remedy: if fundamental, avoidance is available, and so is a demand for substitute goods; if not, damages, performance, repair (unless unreasonable) or price reduction, but not substitute goods.
7Add damages where loss is shown, limited to foreseeable loss, and state your conclusion clearly.

Quickest way: Duty, breach, seriousness, remedy

When to use it: Use this for objective test questions in Section A and the multi-task questions in Section B where time is short and options look similar.

Spot the party in breach and the duty broken.
Ask: does the breach substantially deprive the other side of what it was entitled to expect? If no, rule out avoidance, unless an extra period for performance was fixed and missed.
If the buyer complains about quality, check for late or vague notice first, because that often decides the answer.
Pick the remedy that matches: avoidance only for fundamental breach (or a missed extra period), price reduction only for the buyer and only for non-conforming goods, damages for any breach.
Eliminate options that say damages are lost on avoidance. Remember that objective test questions are marked all or nothing, so a partly right answer earns nothing.

Common mistakes in Seller and Buyer Obligations and Remedies under CISG

Treating every breach as allowing avoidance.
Students link breach with ending the contract, as in some domestic rules.
Fix: Test for fundamental breach first. If it is not fundamental, the remedies are damages, performance, repair (unless unreasonable) or price reduction. Substitute goods can be demanded only where the non-conformity is a fundamental breach.
Forgetting the buyer's duty to give notice of non-conformity.
Students focus on the seller's defect and skip the buyer's steps.
Fix: Always check whether notice was given in reasonable time and described the defect. Late or vague notice can lose the claim.
Saying avoidance removes the right to damages.
Students think ending the contract ends all claims.
Fix: Avoidance releases both parties from future performance, but damages for the breach remain claimable.
Giving price reduction to the seller.
Students treat it as a general remedy.
Fix: Price reduction is a buyer's remedy for non-conforming goods only.
Ignoring the default conformity standards when the contract is silent.
Students look only for express terms.
Fix: Apply the defaults: ordinary purpose, particular purpose made known, usual packaging, and sample or model if one was given.
Claiming unlimited damages.
Students forget the foreseeability cap.
Fix: State that damages are limited to loss the breaching party foresaw or ought to have foreseen as a possible consequence of the breach, judged at the time the contract was concluded in light of the facts then known or that ought to have been known.

Worked examples

Example 1

A seller in Country A agrees to sell 500 machine parts to a buyer in Country B. The parts delivered are a different grade and are slightly rougher, but still usable in the buyer's production with minor adjustment. The buyer gives prompt, detailed notice. Can the buyer avoid the contract?

Show the solution

The parties are in different states and the sale is of goods, so the CISG applies.
The seller has breached the duty to deliver conforming goods because the grade differs from the contract.
Test seriousness: the parts remain usable with minor adjustment, so the buyer is not substantially deprived of what it expected.
The breach is therefore not fundamental, and avoidance is not available.
The buyer's notice was prompt and specific, so the right to rely on the defect is kept.
The buyer may claim damages, require repair if reasonable, or reduce the price to reflect the lower value.

Answer: No. The breach is not fundamental, so the buyer cannot avoid. It may claim damages, repair or a price reduction.

Example 2

A buyer receives goods and finds a defect in the first week. It says nothing for 14 months and then writes a vague letter saying it is unhappy. The goods were handed over 14 months ago. What is the likely position on a claim for non-conformity?

Show the solution

The seller delivered defective goods, which is a breach of the conformity duty.
The buyer must give notice within a reasonable time after it discovered, or ought to have discovered, the defect, and the notice must specify the nature of the defect.
The defect was found in week one, but nothing was said for 14 months, so notice was not within a reasonable time.
The letter was vague, so it also fails to specify the lack of conformity.
The two-year long-stop has not passed, but that does not save a notice that was late and vague.
The buyer is therefore likely to lose the right to rely on the lack of conformity.

Answer: The buyer is likely to lose the right to rely on the defect because notice was late and not specific, even though the two-year long-stop had not expired.

Exam tips

For objective questions, find the party in breach first, then match the remedy. Wrong options often swap seller and buyer remedies.
Look for the words 'substantially deprived'. They signal fundamental breach and avoidance.
Check dates in the scenario. Late notice is a common hidden trap in Section B cases.
Remember all-or-nothing marking: objective test questions give no partial marks, so read all options before choosing, as two may look close.
If an option says damages are lost after avoidance, reject it.

Practice questions from Introduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms

Seller and Buyer Obligations and Remedies under CISG: frequently asked questions

What must a seller do under the CISG?

The seller must deliver the goods, hand over documents relating to them, and transfer the property in them. The goods must conform to the contract in quantity, quality, description and packaging.

When can a party avoid a CISG contract?

Generally only when the other party commits a fundamental breach. A breach is fundamental if it substantially deprives the innocent party of what it was entitled to expect. There is also an extra-period route. The buyer may fix an additional period for the seller to perform (Art 47), and the seller may fix one for the buyer to perform (Art 63). Avoidance then follows only for the seller's non-delivery, or the buyer's non-payment or failure to take delivery, within that period.

What are the buyer's main obligations?

The buyer must pay the price and take delivery of the goods. The buyer must also examine the goods promptly and give notice of any non-conformity within a reasonable time.

Can I claim damages and avoid the contract together?

Yes. Avoidance ends future performance but does not remove the right to damages for the breach. Damages are limited to loss that was foreseeable when the contract was concluded.