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

Iota Inc (buyer) receives goods from Kappa Ltd under a CISG contract. The goods are non-conforming, and Iota has a valid right to demand delivery of substitute goods. Which condition must be met for Iota to require replacement goods?

Iota may require substitute goods only if the non-conformity is a fundamental breach and the request is made with the notice of non-conformity or within a reasonable time after it. Minor defects do not justify demanding replacement under the CISG.

  1. AThe lack of conformity must amount to a fundamental breach, and the request must be made with the notice or within a reasonable time after itCorrect
  2. BThe lack of conformity may be of any size, and no notice is needed
  3. CIota must first obtain a court order
  4. DReplacement is only available if the price is reduced

Explanation

The CISG allows the buyer to require delivery of substitute goods only where the non-conformity amounts to a fundamental breach, and the request must be made with the notice of non-conformity or within a reasonable time afterwards. Minor defects may instead be repaired or the price reduced.

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