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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

Under the CISG, Delmar Co (buyer) receives a consignment of machine parts from Eastex Ltd. Delmar notices that some parts are defective but takes no action. Eight months later, Delmar notifies Eastex of the defect. The contract is silent on notice periods, and the defect could have been found by a reasonable inspection on arrival. What is the most likely outcome?

Delmar probably loses its right to rely on the defect. The CISG requires a buyer to give notice of non-conformity within a reasonable time after it discovered, or ought to have discovered, the defect. Waiting eight months for a defect an inspection would have revealed is unlikely to be reasonable.

  1. ADelmar keeps all remedies because the CISG sets no time limit for notice
  2. BDelmar 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. CDelmar can only claim damages but not avoid the contract
  4. DEastex must accept the return of the goods automatically

Explanation

The buyer must examine the goods promptly and give the seller notice specifying the lack of conformity within a reasonable time after it discovered or ought to have discovered it. Failing this, the buyer loses the right to rely on it. Eight months is not reasonable for a defect findable on inspection.

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