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

Kora Co sells 1,000 fabric rolls to Lumen Ltd under the CISG. On delivery on 1 March, Kora tenders 1,000 rolls, but 100 are of the wrong colour. Lumen wants to avoid the whole contract. Under the CISG, Lumen may declare the contract avoided in respect of the entire contract only if:

Lumen can avoid the whole contract only if the non-conformity is a fundamental breach, meaning it substantially deprives Lumen of what it expected under the contract. Mere partial non-conformity is not enough by itself.

  1. AAny portion of the goods is non-conforming
  2. BThe non-conformity amounts to a fundamental breachCorrect
  3. CLumen has paid the price in full
  4. DKora has not been given a written warning

Explanation

Avoidance of the whole contract for non-conforming delivery requires a fundamental breach, meaning substantial detriment to the buyer in what it was entitled to expect, which the seller foresaw. A minor non-conformity of 10% of goods does not automatically qualify. Option A is wrong for that reason.

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