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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 (State C) sends Delmar Inc (State D), both CISG contracting states, an offer to supply 1,000 units of components at USD 20 each. Delmar replies: 'We accept, but delivery must be 14 days earlier than you proposed.' Under the CISG, what is the legal effect of Delmar's reply?

Delmar's reply is a rejection and counter-offer. Under the CISG, an acceptance that changes the terms of the offer materially is not an acceptance, and alterations to the time of delivery are treated as material, so no contract is formed unless Corvo Ltd agrees.

  1. AA valid acceptance, because delivery time is a minor term
  2. BA rejection of the offer and a counter-offer, because altering delivery time is a material alterationCorrect
  3. CA valid acceptance that takes effect only once Corvo Ltd is silent for 14 days
  4. DAn acceptance, with the delivery term decided by the court

Explanation

Under the CISG a reply purporting to accept but containing additions or modifications that materially alter the offer is a rejection and a counter-offer. Terms relating to time and place of delivery are listed as materially altering. Treating it as valid acceptance is therefore wrong.

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