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

Under the CISG, Delmar Co failed to pay the price of goods on the due date. The contract said nothing about interest. Which statement is correct?

Delmar must pay interest on the late price even though the contract is silent, because the CISG gives an automatic right to interest on sums in arrears. The Convention does not set a rate, so it is determined by the applicable domestic law.

  1. ADelmar owes interest on the unpaid sum, but the CISG does not fix the rateCorrect
  2. BDelmar owes no interest unless the contract expressly provides for it
  3. CDelmar owes interest at a fixed rate of 5% a year set by the CISG

Explanation

The CISG gives the seller a right to interest on any price or other sum in arrears, whether or not the contract mentions it. The Convention does not state the rate, which is left to the applicable domestic law. The claim of a fixed 5% rate is therefore wrong.

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