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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

Corvo Ltd (Country X) agrees to sell a consignment of timber to Delmar Inc (Country Y). Both states are CISG contracting states. The contract states that 'the CISG is excluded and the law of Country X governs.' A dispute arises over late delivery. Which statement is correct?

The CISG does not apply because the parties expressly excluded it, which the Convention permits. It is not mandatory law, so the chosen law of Country X governs the dispute without any need for court approval.

  1. AThe CISG still applies because it is mandatory between contracting states
  2. BThe CISG applies only to the buyer's obligations, not the seller's
  3. CThe CISG does not apply because the parties have validly excluded itCorrect
  4. DThe CISG applies because the exclusion was not approved by a court

Explanation

The CISG allows parties to exclude its application or vary its provisions. A clear express exclusion is effective, so the chosen national law governs. It is not mandatory and no court approval is needed.

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