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

Under a CISG contract, Brasa Ltd (buyer) rejects goods lawfully delivered to its warehouse because they do not conform with the contract. The seller has no agent at the destination. Which statement best describes Brasa's duty regarding the rejected goods?

Brasa must take reasonable steps to preserve the rejected goods and can recover its reasonable expenses from the seller. Rejection does not remove the duty of care, and selling is permitted only in limited cases such as perishable goods or unreasonable delay.

  1. AIt must take reasonable steps to preserve them, and may recover reasonable expenses from the sellerCorrect
  2. BIt may leave them unprotected, because rejection ends all its obligations
  3. CIt must sell them immediately at any price and keep the proceeds for itself

Explanation

A buyer in possession of goods it intends to reject must take reasonable steps to preserve them and is entitled to retain them until reimbursed by the seller for reasonable expenses. Rejection does not end this duty. A sale is allowed only in limited cases, such as perishability or unreasonable delay, and the proceeds are not kept for the buyer's own benefit.

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