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

Corvale Co and Dunmere Co, both in Contracting States to the CISG, agree a sale of bulk wheat. Their contract states: 'The CISG shall not apply to this contract.' A dispute arises over late delivery. What is the position?

The CISG does not apply, because the parties are free to exclude it expressly. The Convention is default law that they may opt out of, so the dispute will be decided under the national law identified by conflict of laws rules.

  1. AThe CISG still applies because it is mandatory law for international sales
  2. BThe CISG does not apply because the parties may exclude itCorrect
  3. CThe CISG applies only to the buyer's obligations and not the seller's

Explanation

The CISG is not mandatory; parties may exclude it or vary its provisions. An express exclusion is effective, so national law chosen by the rules of private international law governs instead. The CISG covers both parties' obligations, so the last option is wrong.

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