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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, Gamma SA delivers goods that do not conform to the contract. Delta Co, the buyer, examined them promptly but then waited three years before telling Gamma about the lack of conformity, which it could have discovered on inspection. Which statement is correct?

Delta loses the right to rely on the non-conformity. The CISG requires the buyer to notify the seller, specifying the defect, within a reasonable time of when it discovered or ought to have discovered it. Waiting three years breaches that requirement, and no proof of seller loss is needed.

  1. ADelta may still rely on the lack of conformity, as the CISG sets no notice requirement
  2. BDelta loses the right to rely on the lack of conformity because it did not give notice within a reasonable time after it ought to have discovered itCorrect
  3. CDelta may rely on it, because notice is only needed for late delivery
  4. DDelta loses the right only if Gamma proves it suffered loss from the delay

Explanation

The CISG requires the buyer to give notice specifying the nature of the non-conformity within a reasonable time after discovering it or when it ought to have done so. Failure to do so loses the right to rely on it. Proof of loss to the seller is not required.

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