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

Jarvis Foods sold a consignment of fresh fruit to Kestrel Ltd under the CISG. Kestrel rightly rejects the fruit, which is subject to rapid deterioration, and Jarvis, who has no agent at the destination, has not responded to Kestrel's notice. Which action is open to Kestrel in relation to the fruit?

Kestrel may sell the perishable fruit by appropriate means, giving Jarvis reasonable notice where possible, and may deduct the reasonable costs of preserving and selling it, accounting to Jarvis for the balance of the proceeds.

  1. ASell it by appropriate means, after giving Jarvis reasonable notice of its intention if practicable, and keep from the proceeds the reasonable costs of preservation and saleCorrect
  2. BSell it and keep all the proceeds as compensation for rejection
  3. CDispose of it without notice or accounting, since goods that perish belong to the buyer
  4. DWait indefinitely for Jarvis's instructions since any sale would be a breach

Explanation

A party bound to preserve goods may sell them where they are subject to rapid deterioration or storage would involve unreasonable expense, giving reasonable notice of intention to sell where possible. The seller is entitled to the balance after reasonable preservation and sale costs are deducted. Keeping all proceeds or waiting indefinitely is wrong.

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