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

Brandt GmbH buys 1,000 units from Zolani Ltd under the CISG. The contract price is 80,000 and payment is due on delivery. Brandt receives the goods and finds 5% are slightly defective, but they are not a fundamental breach. Brandt refuses to pay anything and also refuses to take delivery. Which statement is correct?

Brandt must still take delivery and pay, but may claim damages or reduce the price for the non-conformity. A non-fundamental defect does not let a buyer avoid the contract or withhold the entire price.

  1. ABrandt may withhold the whole price because any defect releases a buyer from the duty to pay
  2. BBrandt's duty to pay is suspended until Zolani replaces the entire consignment
  3. CBrandt may refuse to pay the price but must still take delivery
  4. DBrandt remains obliged to take delivery and pay, but may claim damages or a price reduction for the non-conformityCorrect

Explanation

A non-fundamental defect does not allow avoidance of the contract, so the duty to pay and take delivery remains. The buyer's remedies are damages or reducing the price in proportion to the reduction in value. Refusing all payment is wrong because no right to withhold the whole price arises from a minor defect.

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