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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

Mora Ltd sells specialised packaging to Nest Co under a CISG contract. Delivery is late by two weeks, but Nest still receives usable goods and the delay causes no substantial deprivation of what Nest was entitled to expect. Nest wishes to avoid the contract. Which statement is correct?

Nest may not avoid the contract but may claim damages for the loss caused by the delay. Avoidance under the CISG requires a fundamental breach, meaning substantial deprivation of expected benefit, and a two-week delay with usable goods does not meet that test.

  1. ANest may avoid the contract because any late delivery is a fundamental breach
  2. BNest may not avoid the contract for fundamental breach but may claim damages for loss caused by the delayCorrect
  3. CNest may avoid the contract only by obtaining a court order

Explanation

Under the CISG the buyer may declare the contract avoided only for fundamental breach, meaning substantial deprivation of what the party was entitled to expect. A short delay with no such deprivation is not fundamental, though damages remain available. Avoidance is by notice to the seller, not by court order, so the third option is wrong.

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