Perfect Tender and Rejection of Goods
Seller’s must provide perfect goods and delivery.
If Seller gives imperfect tender Buyers options are:
1) retain goods and sue for damages
or
2) reject some or all foods and sue for damages.
If Buyer rejects Buyer must:
1) notify seller of rejection in reasonable time.
2) hold rejected goods with reasonable care
3) give seller resonable time to remove goods.
C Removal of Goods - If seller does not remove or notify buyer of plans to remove goods, Buyer can dispose of the goods by:
1) Return to seller
2) store the goods for seller
3) resell them on behalf of seller (i.e. for profit)
Perfect Tender and acceptance of Goods
A. Acceptance occurs if buyer:
1) has a reasonable time to inspect goods and informs seller that they conform or keeps them despite nonconformance. Once goods are accepted buyer cannot reject. But note that (i) payment without opportunity to inspect is not acceptance.
2) Buyer fails to reject or notify seller of rejection within a reasonable time (no more than a month).
B. Revocation of Acceptance
1) General Rule: Buyer generally cannot reject goods once he has accepted.
2) Exceptions when Buyer can revoke are:
(i) Non-conformity substantially impairs value of goods,
(ii) Buyer was reasonably ignorant on grounds for revocation or relied on seller’s assurances of satisfaction.
(iii) Buyer revoked w/in reasonable time after discovering nonconformity
Perfect Tender and Sellers Ability to Cure
If buyer has notified seller of imperfect tender (delivery of nonconforming goods), seller may have an opportunity to cure if:
1. (a) Seller gives buyer reasonable notice of intent to cure(b) time for performance has not yet expired (c) Seller later delivers conforming goods.
- (a) Seller had reasonable grounds to believe nonconforming goods would be acceptable based on past dealings with buyer. (b) then Seller will have additional reasonable time to cure.
- Note - Buyer CANNOT compel Seller to cure.
Perfect Tender and Installment Contracts
Under an installment K, (goods are delivered in separate lots) buyer’s ability to reject goods due to imperfect tender is limited.
- Rejection - buyer can only reject a delivery if: (a) nonconformity substantially impairs the installment. (b) Nonconformity cannot be cured.
- Note - For rejection to cancel entire K the Nonconforming installment must substantially impair the value of the whole K. If not then only that installment can be rejected.
