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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

Jasmine Co (Country T) sells goods to Kofi Co (Country U), both Contracting States. The contract states: 'The CISG shall not apply to this agreement; the law of Country T governs.' A dispute arises over late delivery. Which statement is correct?

The CISG does not apply, because it is not mandatory and the parties may exclude it or vary its provisions. The express clause excluding the Convention and choosing Country T's law is effective, so that national law governs the late delivery dispute.

  1. AThe CISG still applies because it is mandatory for Contracting States
  2. BThe CISG applies only to formation issues, not to delivery
  3. CThe CISG does not apply because the parties may exclude it or vary its provisionsCorrect
  4. DThe CISG applies unless a court in Country U decides otherwise

Explanation

The CISG is not mandatory. The parties may exclude its application or derogate from or vary the effect of its provisions. An express exclusion in the contract is effective, so the chosen national law governs the delivery dispute.

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