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A buyer may also reject a conforming tender. Perhaps the buyer doesn't have the money or doesn't want to spend the money for the goods. The fact that the buyer rejects conforming goods does not mean that the seller has no remedies. Far from it. But the buyer may just act this way. 2-602 is the section on the manner of rejection. However, a distinction of importance needs to be made, between "rightful" and "wrongful" rejection. If goods are conforming and they are rejected, the rejection is "wrongful." Look at Cmt. 3. "If the seller has made a tender which in all respects conforms to the contract, the buyer has a positive duty to accept and his failure to do so constitutues a 'wrongful rejection' which gives the seller immediate remedies for breach."

What may the seller do? 2-602(3) provides the answer:

"The seller's rights with respect to goods wrongfully rejected are governed by the provisions of this Article on Seller's remedies in general (Section 2-703)."

I will get to the rest of 2-602 on rejection below, when I speak of rejecting nonconforming tenders.

Nonconforming Tenders

What is the situation when there has been a nonconforming tender? First we need to start with the basic section on improper delivery: 2-601. It provides:

"Subject to the provision of this Article on breach in installment contacts (2-612) and unless otherwise agreed under the sections on contractual limitations of remedy (2-718 and 2-719), if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may (a) reject the whole; or (b) accept the whole; or (c) accept any commercial unit or units and reject the rest."

This is a fairly remarkable section, in my mind, because it is one of the few places in the Code where the rigidities of the CLC are preserved when we would not have expected them to be so preserved. What I mean is that 2-601(a) reinterates the "perfect tender rule." If the seller hasn't fully delivered or tendered what the contract requires within the time the contract defines, then the buyer may reject the whole. Pretty drastic, don't you think?

Well, there have been a few ways that the courts, and the Code itself, seems to "soften" this requirement. The court-sanctioned softening is reflected in the D.P. Technology case (p.394) from CT. In that case a contract called for delivery of goods by April 18. In fact, the goods were not fully delivered until May 4, which was 16 days late. The plaintiff seller (DP) argued that the defendant waived late delivery and that it was an installment contract, but procedural issues eliminated those possibilities. Plaintiff also argued that defendant's reliance on the perfect tender rule was misplaced. It argued that the 2-601 should really be a "substantial compliance" rather than a strict compliance rule. The federal court agreed with plaintiff, not because there was solid CT authority on the question but because CT "appeared to be the exception" and because academic commentary had critcizied the perfect tender rule. But the DP Technology ruling is a minority ruling.

The three other prominent ways that the perfect tender rule of 2-601 might be relaxed by the language of the Code itself are through: (1) the cure provision of 2-508; (2) the installment sales section of 2-612, which itself requires only substantial compliance, and (3) the section on U/T and C/D where the practices of industry or the previous contracts between the parties might allow for "slippage" or a small percentage nonconformity without voiding the contract or giving the buyer the opportunity to rightfully reject. I will speak about (1) and (2) below, having already dealt with (3) earlier in the course.

Acceptance and Rejection of Nonconforming Tenders

So, let us assume that the tender is nonconforming in some respect. The buyer still may accept it. What are the implications of accepting a non-conforming tender? 2-607 deals with the issue further. The basic point will be that once you have accepted goods you are no longer allowed to reject them. That may sound like a truism, but it has pretty dramatic results under Article 2. Here is the language.

"(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for non-conformity."

The subsection makes two points. First, if you accept the goods knowing of the non-conformity, you cannot revoke your acceptance. You have bought the goods and you must pay or be subject to the seller's remedies under 2-703. Second, if you accept the goods with the assumption that nonconformities will be cured, you still have a remedy. That remedy is in 2-608, and is called "revocation of acceptance."

Therefore, if you have accepted a nonconforming tender, the only way out of the contract or the only way to get a remedy is through the revocation of acceptance section (2-608). You may revoke acceptance in two situations: (a) where you had the reasonable assumption that cure would take place and it has not happened, and (b) where the seller assured you that there were no problems with the goods and you discovered problems subsequently after being reasonably induced to believe the seller's representations. You should also note that revocation of acceptance "must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects" (2-608(2)). Finally, revocation of acceptance, if proper, gives the buyer the same rights with regard to the goods involved as if s/he had rejected them (2-608(3)). You also need to consult 2-607(3) and (4) in order fully to understand the issue.

Let's move now to rejection of nonconforming tenders.