NVIDIA's annual report for the fiscal year ended 25 January 2026 says the company has experienced extended lead times of more than 12 months [35]. When GPU systems on order arrive late, a buyer's remedies for late delivery of goods come from two places: the sales law that governs the contract and the delivery terms the parties wrote. This explainer reads Article 2 of the Uniform Commercial Code (UCC) and the United Nations Convention on Contracts for the International Sale of Goods (CISG) as their texts state them, beside delivery terms from public filings. It is research, never legal advice.
Which law applies
The UCC is "not a federal law, but a uniformly adopted state law" [22], and each state enacts its own text: California, for one, tests liquidated damages under its Civil Code [23]. Article 2 covers transactions in goods [3], and a GPU system that does not exist at signing fits the code's definition of "future" goods [4].
The CISG governs a sale of goods between parties whose places of business are in different States, when those States are Contracting States or when private international law leads to a Contracting State's law [24]. The United States, China and Singapore have declared that they are not bound by that second route [25]. Parties may also exclude the Convention [24]. Nscale's form order with a model developer customer, a GPU services contract, chooses New York law and states that the CISG does not apply [29]. Articles 1 and 6 set two of the Convention's tests for a cross-border purchase: where each party has its place of business, and whether the contract excludes it [24].
When late delivery becomes a breach
If the contract sets no date, the UCC asks for delivery within a reasonable time [6], and the CISG within a reasonable time after the contract is concluded [24]. Under the UCC, if the goods or the tender of delivery fail "in any respect" to conform to the contract, the buyer may reject the whole, accept the whole or accept some commercial units, subject to the installment rule and agreed limits on remedy [7]. How courts apply those words to a late tender is case law, which the report does not review.
Before a date passes, a party with reasonable grounds for insecurity may demand adequate assurance in writing, and a failure to give it within a reasonable time not over thirty days after a justified demand is a repudiation [8]. Forward agreements for GPU systems covers that demand and the Nebius delivery terms.
The CISG lets the buyer fix "an additional period of time of reasonable length" for delivery, during which it keeps its claim for damages for delay and generally may not resort to other remedies [24]. If the seller does not deliver within that period, or commits a fundamental breach, the buyer may declare the contract avoided by notice [24].
Remedies for late delivery of goods under the UCC
When the seller fails to make delivery or repudiates, the buyer may cancel, recover what it has paid and choose between two measures [13]. It may cover, buying substitute goods "in good faith and without unreasonable delay", and recover the cost of cover minus the contract price [14]. Or it may recover the market price when it learned of the breach minus the contract price, measured at the place for tender [15]. Either way it adds incidental and consequential damages and subtracts expenses saved [14, 15].
Consequential damages include losses from the buyer's requirements and needs that the seller had reason to know of at contracting, and that cover or other steps could not reasonably prevent [17]. What the agreement records about the delivery month and the site therefore bears on what the seller had reason to know. The CISG measures damages in similar ways, with lost profit included up to what was foreseeable at contracting [24].
Liquidated damages for late delivery
The UCC allows damages fixed in advance only at an amount reasonable in light of the anticipated or actual harm, the difficulty of proving loss and the inconvenience or nonfeasibility of another adequate remedy [19]. "A term fixing unreasonably large liquidated damages is void as a penalty" [19]. An agreed remedy is exclusive only if the parties expressly say so, and if it fails of its essential purpose the code's remedies apply [20].
IREN's statement of work with Microsoft, a capacity service, gives a Delay Credit for each day a tranche misses its Delivery Date, at a redacted rate, and makes the credits and the termination right the customer's "sole and exclusive remedies related to Supplier's late delivery" [28]. Nscale's form order, also a capacity service, cuts fees by a "late delivery discount" after a redacted grace period and calls it "partial compensation", "rather than liquidated damages or a penalty" [29]. CIMG's subsidiary agreed to supply a bank with CPU and GPU servers for about RMB 752.2 million, under a hardware supply contract that contains liquidated damages provisions [34].
Tranches as installment contracts
A contract that requires or authorizes delivery in separate lots to be separately accepted is an installment contract under the UCC [10]. The buyer may reject a non-conforming installment if the defect substantially impairs that installment and cannot be cured, or is a defect in the required documents [10]. A default that substantially impairs the value of the whole contract breaches the whole, and a buyer that accepts a non-conforming installment without seasonably notifying cancellation reinstates the contract [10].
Under the CISG, where deliveries are so interdependent that they could not be used for the purpose the parties contemplated, a buyer avoiding as to one delivery may also avoid as to the others [24]. IREN's statement of work, a capacity service, sets its own order of delivery: tranches 3 and 4 are not delivered until tranches 1 and 2 have been merged to operate as a single cluster [28]. If a tranche misses its Delivery Delay Window and the supplier cannot deliver equivalent capacity within a redacted number of days, the customer may terminate it at once, owes nothing for it and gets back its upfront payment of 20% of the tranche value, and the agreement continues [28]. Nscale's capacity order lets the customer end a tranche delayed past a redacted threshold "without any payment or other obligation or liability of any kind" [29].
Excused delay and allocation among buyers
Section 2-615 excuses a seller's delay when performance as agreed has been made impracticable by a contingency whose non-occurrence was a basic assumption of the contract, unless the seller assumed a greater obligation [11]. When the cause affects only part of its capacity, the seller must allocate deliveries among its customers in any manner "which is fair and reasonable" and tell each buyer its estimated quota [11]. The buyer may then, by written notice, terminate the unexecuted portion or take its quota, and if it does neither within a reasonable time not over thirty days, the contract lapses as to the affected deliveries [12]. The CISG exempts a party from damages for a failure due to an impediment beyond its control that it could not reasonably have foreseen at contracting or avoided, and requires notice of it [24].
IREN's capacity contract extends a Delivery Date for an "Excluded Delay" that includes NVIDIA failing to deliver GPUs in the volumes and timelines anticipated, if the supplier shows it contracted for enough GPUs on time [28]. Nscale's capacity order excuses a "Component Constraint" only if the provider gave early evidence of binding orders, and bars it from changing the prioritization of deliveries of similar services to others until every tranche is delivered and accepted [29].
Delays in public disclosures
Nebius's contract with Microsoft, a capacity service, lets Microsoft terminate a GPU Service whose agreed delivery date Nebius misses after a grace period if it cannot provide alternative capacity, and includes liquidated damages for late delivery [26].
CoreWeave, a capacity provider, said on 10 November 2025 that a third-party data center developer was "behind schedule" [27]. The affected customer agreed to adjust the delivery schedule and extend the expiration date, so CoreWeave kept the contract's total value [27]. That was a negotiated reschedule.
In a hardware purchase, Bit Origin said on 29 June 2026 that 16 B300 servers were expected to be delivered during the third quarter of 2026 [31]. Its release of 16 October 2026 as SANGRIX, filed with the SEC as Exhibit 99.1 to a Form 6-K, said the seller had advised, based on the manufacturer's latest update, that the servers were scheduled to be delivered during the week of 3 November 2026 [30]. SANGRIX had filed no delivery update by 8 November 2026 [33]. What sets GPU system lead times in 2026 sets both delays against the stages of the GPU supply chain.
What the filings put in writing
The filed contracts name what the statutes leave to a reasonable time: a Delivery Date per tranche, a grace period or delay window, credits or discounts per day, a termination right per tranche, excused-delay rules tied to proof of supply orders and a governing-law choice [28, 29]. What makes a GPU capacity contract financeable reads the same terms as lenders do. Rillor's forward purchase agreements name the delivery month and location, hold the buyer's deposit with an independent escrow agent and have the seller post a performance bond to back delivery.
Read the full report
The full report sets the UCC and CISG rules side by side, compares the filed delay terms and lists all 35 sources.