Part 11- Appendix B: Uniform Commercial Code, Note 4

Summary of Appendix B: UCC Article 2 - Buyer and Seller Rights in Delivery, Risk, and Breach Seller's Obligations in Delivery 1. Tender of Delivery (§ 2–503): o The seller must make conforming goods available to the buyer at a reasonable time and place, providing any necessary notifications. o If goods are in possession of a bailee, the seller must either provide a negotiable document of title or direct the bailee to deliver to the buyer. 2. Seller's Shipment Responsibilities (§ 2–504): o The seller must:  Arrange reasonable transport contracts for the goods.  Provide documents required for the buyer to take possession.  Notify the buyer of the shipment. 3. Cure for Improper Delivery (§ 2–508): o If delivery is non-conforming but still within the contract timeline, the seller may notify the buyer of intent to cure and deliver conforming goods within the agreed time. o If a non-conforming tender was reasonably expected to be accepted, the seller may attempt to substitute goods with buyer approval. 4. Delivery Under Reservation (§ 2–505): o The seller can retain a security interest in goods during shipment by obtaining a negotiable bill of lading to their own order. Risk of Loss 1. Risk in Normal Transactions (§ 2–509): o When goods are shipped: Risk transfers to the buyer once goods are delivered to the carrier unless a specific destination is required. o When goods are with a bailee: Risk transfers when the buyer receives a document of title or acknowledgment from the bailee. o For merchant sellers: Risk passes when the buyer receives the goods. o For non-merchant sellers: Risk passes when the seller tenders the goods. 2. Effect of Breach on Risk (§ 2–510): o If goods fail to conform to the contract and are rejected, the seller retains the risk of loss until the issue is cured or the goods are accepted. o If the buyer revokes acceptance due to non-conformity, risk reverts to the seller. Buyer's Rights and Obligations 1. Inspection of Goods (§ 2–513): o Buyers may inspect goods before payment or acceptance unless terms like C.O.D. or payment against documents apply. o Inspection expenses are borne by the buyer unless goods are rejected for non-conformity. 2. Rejection of Goods (§ 2–602): o Rejection must occur within a reasonable time, and the buyer must notify the seller. o The buyer has no further obligations for rejected goods but must care for them temporarily if already in possession. 3. Merchant Buyers’ Duties (§ 2–603): o If no seller's agent is available at the rejection location, the buyer must follow reasonable seller instructions and may sell perishable goods to mitigate loss, with reimbursement rights for costs. 4. Acceptance of Goods (§ 2–606): o Occurs when:  The buyer indicates goods are acceptable after inspection.  The buyer fails to effectively reject the goods within a reasonable time.  The buyer acts inconsistently with the seller's ownership. o Acceptance of part of a commercial unit is treated as acceptance of the whole. 5. Effect of Acceptance (§ 2–607): o Buyers must pay for accepted goods and cannot later reject them. o Buyers can still claim breach of warranty but must notify the seller promptly of any non-conformities. Payment and Performance 1. Tender of Payment (§ 2–511): o Buyers must tender payment in ordinary forms unless the seller specifies legal tender and provides a reasonable timeframe for procurement. o Payment by check is conditional and invalid if dishonored. 2. Payment Before Inspection (§ 2–512): o Buyers are required to pay before inspection only if the contract specifies. Payment does not waive the right to inspect or assert remedies for non-conformity. Remedies for Breach 1. Buyer's Options for Non-Conforming Goods (§ 2–601): o Reject the whole. o Accept the whole. o Accept any commercial units and reject the rest. 2. Salvage of Rejected Goods (§ 2–604): o Buyers may store, return, or resell rejected goods on behalf of the seller, seeking reimbursement for reasonable expenses. 3. Waiver of Defects (§ 2–605): o Buyers failing to specify defects during rejection may forfeit the right to rely on unstated defects unless the seller could have reasonably cured them.