Acceptance & Rejection of Conforming & Non-Conforming Goods
In closing a sale under the Uniform Commercial Code (“UCC”), the first question to consider is whether the goods are conforming. Goods are conforming if they are precisely as agreed upon in the build up to the transaction. For instance, if there is a contract between merchants for the sale of one-thousand car tires with black rims, and the purchaser receives same, then the goods are conforming and must be accepted. Non-conforming goods, on the other hand, are anything less than exact performance.
What happens with non-conforming goods? Even though they are different, they still can be accepted if the appropriate action is not taken. Acceptance of non-conforming goods can occur in the following circumstances: (1) the buyer, aware of the problems, nonetheless accepts and waives the problem; (2) the buyer, after a reasonable opportunity to inspect the items, fails to reject the property; or (3) the buyer acts in a way with the property that is inconsistent with the seller’s ownership. In order to avoid such an inadvertent acceptance, the buyer should do well to immediately notify the seller of the problem. The seller, in turn, will have an opportunity to cure the defect. If this is not done in a timely manner, the transaction may be canceled, or, in certain circumstances, liability may attach.
Contact us with questions regarding the UCC, breach of contract disputes, or commercial/business problems.