Skip to content

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

Under the CISG, Brandt GmbH is to deliver 12 monthly instalments of components to Vale Inc. The fourth delivery is defective, which gives Vale good grounds to fear that future instalments will also be defective. Which course is open to Vale?

Vale may declare the contract avoided for future instalments, because the defect in one instalment gives good grounds to conclude that a fundamental breach will occur in later instalments. It cannot automatically avoid past instalments, which depends on interdependence.

  1. ADeclare the contract avoided for the future instalments if the failure gives good grounds to conclude a fundamental breach will occur in future instalmentsCorrect
  2. BDeclare the contract avoided for all 12 instalments including those already accepted, in every case
  3. CTake no action, because each instalment must be treated as a separate contract with no effect on later ones

Explanation

In an instalment contract, a failure in respect of one instalment that gives good grounds to conclude a fundamental breach will occur for future instalments allows avoidance for the future. Avoidance of all instalments, including past ones, is only possible if they are interdependent. Option 3 ignores the rule.

Did you get it right without looking?

One question tells you little. A timed set on Obligations of the seller and buyer, and provisions common to both shows your real accuracy, how long you take and where you lose marks.

Practise Obligations of the seller and buyer, and provisions common to bothFree diagnostic mock

More Obligations of the seller and buyer, and provisions common to both questions