Revocation of acceptance and rejection and acceptance and cure

Though I will spend a few minutes in class today on the problem sheet I distributed on 3/17, I wanted to get you answers for them all, with some explanations.

1. The issue here is whether rejection or revocation of acceptance (or both) are proper remedies. You should present both theories. If she has accepted, she must go the route of revocation (2-608), though if she has rejected under 2-602, then no revocation is needed. In general because revocation is a more limited option, you would like to argue for rejection, if possible. However, the difficulty with arguing for rejection two weeks after possession is that there may be several acts inconsistent with the seller's ownership (2-606(1)(c)) that make it questionable whether acceptance has, indeed, taken place. The "inspection" route, which is the basis for B wanting replacement or refund, is mentioned both in 2-606(1)(b) and 2-608(1)(b). Actually, I think there is an ambiguity in the Code at this point regarding how long you have to reject after a good is tendered. The case law often confuses revocation of acceptance with rejection. If you are arguing as a plaintiff, you need to present both theories.

2-4 This hypothetical is taken from a real case, Bartus v. Riccardi, 284 NYS2d 222 (1967), though I have changed some of the facts. It implicates the doctrine of cure in 2-508. In answering these questions, you need not only be facile with the Code and relevant Comments, but also the Midwest Mobile case, which has a nice discussion of cure in the context of its 2-612 analysis. The answer to the first question is that B does not have the right to reject on February 2. S has the statutory right to cure under 2-508(1), presuming that S gets the right model before 2/15. When S delivers the A-660 by 2/15, then, B is obligated to accept, if the tender is conforming. Question 3 tweaks the facts by saying that the A-665, a new and improved model, was tendered one day before the original contract date for delivery. Under 2-508(2) an additional reasonable time for tender is permitted only if the seller had reasonable grounds to believe that the non-conforming tender would be acceptable. Thus, you could argue two ways. You can say that S has lost the right to cure because the conforming product will not be delivered by the original contract date. Or, you may argue that it was reasonable for the seller to believe that a new and improved model would be acceptable to B. Then, S should expect to have a "further reasonable time" to cure. Refer to the reasoning of Cmt. 2 to buttress your point here. Cmt. 3 is the buyer's portection with respect to the reasonable additional time. The last question of Question 3 is meant to probe the language of "intent to cure" in 2-508(1). A statement by S that he would "do all he could" to get an A-660 in time is not an intent to cure under 2-508. Such an intent requires language of promise rather than best efforts. Question 4 is meant to explore the language of "seasonably notify" in 2-508(1). It looks, at first glance, that this problem is similar to question 2, and that a simple 2-508(1) analysis will support the seller's conduct here. But a good case could be made (indeed, a better case) that by delaying in notifying B for 10 days (from 2/2 to 2/12), S has not seasonably notified B of intent to cure. See Cmt. 1. Thus, B ought to be able to demand money back from S.

5-6. These examples are meant to explore other issues related to Question 1. Here C has accepted the car. Go through the three alternatives in 2-606(1) and you will see that 2-606(1)(b) applies to the case. She did not signal her rejection. Even though she had a right to inspect the goods, the non-conforming part of the tender was in plain sight. It was not like the engine problem in 1. Thus, there is no inspection issue. Or, said otherwise, she had "a reasonable opportunity to inspect," and did not then make an "effective rejection." Does she have a remedy then through revocation under 2-608? In a word, no. Go through the two prongs of 2-608(1) and you will see that neither applies to her situation. So, she has the emerald interior and has to live with it. Perhaps she can move to the Land of Oz, where she will fit right in. Question 6 is really a difficult one, even though the facts are clear. The central issue has to do with whether the discovery of no spare tire two days after assuming possession meant that D had accepted the car. Is this the kind of thing that a normal eyeball inspection upon tender of the vehicle should have caught (like the emerald interior)? If so, then she has accepted the car, and only has the remedy of revocation under 2-608. But then, as you look at 2-608, you see that your options may be no better. Some courts have looked at the "substantial impairment" language of 2-608(1) without regard to the inspection issues in 2-608(1)(b) and conclude that if this substantial impairment was discovered after acceptance then the acceptance might be revoked. We noted in the Midwest Mobile case that courts can sometimes ignore the close texture of the statute; some have done so here, too.

The next essay provides the other answers.