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ACCA Applied Skills · Corporate and Business Law (Global) · Obligations of the seller and buyer, and provisions common to both

A seller in Country A agrees to sell machine parts to a buyer in Country B under a CISG contract. The contract requires the seller to hand the goods to the first carrier, but does not name a specific place for delivery. The goods are handed to the carrier and then damaged in transit through no fault of the seller. Under the CISG, when does risk pass to the buyer?

Risk passes when the goods are handed to the first carrier. Where the contract involves carriage and no particular place of handover is specified, the CISG treats delivery to the first carrier as the moment risk transfers, so the buyer bears the transit damage.

  1. AWhen the goods are handed over to the first carrier for transmission to the buyerCorrect
  2. BWhen the goods arrive at the buyer's premises in Country B
  3. CWhen the buyer pays the price in full

Explanation

Where the contract involves carriage and the seller is not bound to hand the goods over at a particular place, risk passes when the goods are handed to the first carrier. Arrival at the buyer's premises would apply only if the contract required delivery there. Payment of the price does not determine the passing of risk.

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