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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

Farid Ltd (Country M) agrees to sell a batch of laptops to Gwen, an individual in Country N, who buys them for her personal use. The seller knew this was a purchase for personal use. Both countries are Contracting States. Is the CISG applicable?

The CISG does not apply, because it excludes consumer sales of goods bought for personal, family or household use where the seller knew or ought to have known of that purpose. Since the seller knew Gwen was buying for personal use, the Convention is excluded.

  1. AYes, because the parties are in different Contracting States
  2. BYes, but only if Gwen's purchase exceeds a minimum value
  3. CNo, because the CISG excludes sales of goods bought for personal, family or household use, unless the seller did not know of that useCorrect
  4. DNo, because the CISG applies only to sales of raw materials

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 the seller knew, so the exclusion applies. Option A ignores this exclusion, and there is no minimum value or raw materials limitation.

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