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ACCA Applied Skills · Corporate and Business Law (Global) · Obligations of the seller and buyer, and provisions common to both

Garnet Ltd, a buyer under a CISG contract, refuses to take delivery of goods that the seller, Hollin Co, tendered on the agreed date and which conform to the contract. Garnet offers no lawful reason. Which statement is correct?

Refusing conforming goods without lawful reason breaches the buyer's duty to take delivery. The seller may require the buyer to pay and take delivery, claim damages, and avoid the contract if the failure is a fundamental breach or persists after an additional period fixed.

  1. AGarnet is in breach, and Hollin may require Garnet to pay the price and take delivery, or avoid the contract if the failure amounts to a fundamental breachCorrect
  2. BGarnet is not in breach, because a buyer may always reject goods within a reasonable time
  3. CHollin's only remedy is to keep the goods and claim nothing, since delivery is the seller's duty alone

Explanation

Taking delivery is a buyer's obligation. If the buyer fails to perform, the seller may require payment and taking delivery, claim damages, and may avoid the contract if the failure is a fundamental breach or continues after an additional period fixed by the seller. A buyer cannot reject conforming goods without lawful reason.

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