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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

Evora Ltd offers to supply 1,000 units of component X to Fenwick Inc at 20 per unit. Fenwick replies: 'We accept, but delivery must be made two weeks earlier than you proposed.' Both states apply the CISG. Which statement is correct?

The reply is a counter-offer. Under the CISG, a purported acceptance that changes the time of delivery materially alters the offer, because delivery time is listed among the material terms. It therefore rejects the original offer and proposes new terms.

  1. AThe reply is a counter-offer because a change to the time of delivery is a material alterationCorrect
  2. BThe reply is a valid acceptance because only price changes can be material
  3. CThe reply is a valid acceptance and the delivery date term is simply ignored

Explanation

Under the CISG, additional or different terms relating to, among other things, price, payment, quality and quantity, place and time of delivery, extent of liability or dispute settlement are material alterations. A reply with such terms is a rejection and counter-offer, not an acceptance. Delivery time is therefore material.

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