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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

Delmar Co bought 500 units of components from Orsa Ltd under a contract governed by the CISG. On inspection, Delmar found a defect in the components. It waited nine months and then told Orsa about the defect without having given any earlier notice. Delmar had no reasonable excuse for the delay. What is the likely effect under the CISG?

Delmar probably loses its right to rely on the defect. The CISG requires the buyer to notify the seller of a lack of conformity within a reasonable time of discovering it, and an unexcused nine-month delay defeats the claim.

  1. ADelmar keeps all remedies, because notice is only needed for late delivery
  2. BDelmar loses the right to rely on the lack of conformity if it did not give notice within a reasonable time after discovering itCorrect
  3. CDelmar may only claim a refund of the price and no other remedy

Explanation

The buyer must give the seller notice specifying the nature of the lack of conformity within a reasonable time after discovering or ought to have discovered it. Failure to do so, without a valid excuse, loses the right to rely on the non-conformity. The first option is wrong because notice is required for non-conformity.

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