Perfect Tender Rules Flashcards
(7 cards)
Conversion
Under the UCC, contracts for goods require perfect tender. If a buyer rejects imperfect goods, they must give the seller a reasonable period of time to pick the goods up.
If the buyer sells or otherwise disposes of the goods during this reasonable time period, the seller can sue for conversion – the fair market value of the goods at the time they were sold/disposed of.
What are a buyer’s options upon imperfect tender?
They may accept the goods in whole or part.
They may reject the goods in whole or part.
What if a buyer rejects conforming goods?
This is generally considered breach.
What happens when a seller ships non-conforming goods?
If the shipment is in response to an order/offer, this is considered acceptance and immediate breach.
However, if the shipment also contains a notice of accommodation, this is considered a rejection and counter offer.
Notice of accomodation
If a seller ships goods with a notice of accommodation, this is considered a rejection of the offer/order and a counter offer, which the buyer can either accept or reject.
What are the different ways a seller can except a buyer’s offer to purchase goods?
Promising to sell or ship the goods.
Shipping the goods. Note: if goods are non-conforming, this is acceptance and breach.
What happens if a buyer rejects perishable goods?
If the buyer is a merchant, they have to try to engage in reasonable efforts to resell the goods.
