Part 4- Sales, Chapter 21: Performance of Sales Contracts, Doc 4

Key Points on Buyer’s Rights and Seller’s Remedies in Sales Contracts Rejection of Goods   Buyer’s Rights: 1. The buyer may reject goods if they do not conform to the contract. 2. Rejection must be made within a reasonable time and requires notifying the seller [2-602]. 3. The buyer should list all observable defects during rejection. In merchant transactions, failure to list all defects may prevent the buyer from relying on unlisted defects later if the seller could have cured them [2-605]. Seller’s Right to Cure: o If the buyer rejects goods for nonconformity, the seller may correct the defect and reship conforming goods within the contract time or within a reasonable time after if the seller believed the goods would be accepted [2-508]. Fitl v. Strek Case Summary    Background: James Fitl purchased a valuable Mickey Mantle baseball card, later found to be altered and worthless. He notified the seller, Mark Strek, two years after purchase. Issue: Whether notifying the seller two years later satisfied the "reasonable time" requirement under UCC [2-607(3)(a)]. Court Ruling: o The court ruled in Fitl’s favor, finding the notification timely because the defect was latent (not easily discoverable). o Since the card was irreparably altered, earlier notice would not have enabled the seller to remedy the defect. Buyer’s Duties after Rejection   Merchant Buyers: 1. Must follow reasonable seller instructions regarding the rejected goods. 2. If goods are perishable, the buyer should make reasonable efforts to sell them and recover expenses from the seller [2-603]. 3. Without seller instructions, the buyer may store, ship, or resell the goods for the seller’s benefit [2-604]. Non-Merchant Buyers: o Must hold the goods with reasonable care to allow the seller to retrieve them but are not required to return or sell the goods [2-602]. Assurance and Anticipatory Repudiation   Assurance of Performance: o A party can demand assurance if they reasonably believe the other will not fulfill the contract. Failure to provide assurance within 30 days constitutes repudiation [2-609]. Anticipatory Repudiation: o Occurs when a party communicates intent not to fulfill obligations. The other party may suspend their performance and seek remedies or wait a reasonable time for performance [2-610]. o Repudiation can be withdrawn if the other party has not materially changed their position or canceled the contract [2-611]. Excuse for Nonperformance  Commercial Impracticability: o Performance may be excused if unforeseen events make fulfillment impracticable, such as destruction of specific goods before risk of loss passes to the buyer [2-613]. o If partial performance is possible, the seller must fairly allocate goods among customers and notify them [2-615]. Conclusion These provisions aim to ensure fairness by balancing the buyer’s right to receive conforming goods with the seller’s opportunity to remedy defects or allocate risks in unforeseeable circumstances. Courts often consider the specific circumstances to determine what constitutes reasonable time and actions.