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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 in State X, a Contracting State to the CISG, buys a quantity of laptops from Delmar Inc in State Y, also a Contracting State. Corvo tells Delmar it is buying the laptops for the personal use of the managing director's family, and Delmar knows this when the contract is made. Which statement is correct?

The CISG does not apply. It excludes sales of goods bought for personal, family or household use unless the seller neither knew nor should have known of that purpose. Delmar knew the purpose, so the exclusion operates even though the parties are in different Contracting States.

  1. AThe CISG applies because the buyer is a company
  2. BThe CISG does not apply because the goods were bought for personal or family use and the seller knew thisCorrect
  3. CThe CISG applies because the parties are in different Contracting States, whatever the purpose of purchase

Explanation

The CISG excludes sales of goods bought for personal, family or household use, unless the seller neither knew nor ought to have known of that use. Here Delmar knew, so the exclusion applies. Option C ignores this exclusion.

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