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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

Estrada SA (State E) sends a letter offer to Fenwick Ltd (State F), both CISG contracting states, without fixing a time for acceptance. Fenwick posts a letter of acceptance. Which statement about when the acceptance takes effect under the CISG is correct?

The acceptance takes effect when it reaches Estrada SA. The CISG does not follow the postal rule, so posting the letter does not conclude the contract; the acceptance must arrive with the offeror within the time allowed or a reasonable time.

  1. AWhen Fenwick posts the letter
  2. BWhen the acceptance reaches Estrada SACorrect
  3. CWhen Estrada SA reads the letter
  4. DWhen Fenwick receives confirmation of delivery of the letter

Explanation

The CISG rejects the postal rule: an acceptance takes effect at the moment the indication of assent reaches the offeror. Posting alone is insufficient. Reading the letter is not required; reaching the offeror is enough.

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