Larry failed to reject the goods within a reasonable amount of time after delivery and he failed to notify Crayzee Toys in a timely manner so acceptance was presumed (Clarkson, Miller, Cross 2015). Larry will not get his free whoopee cushions.
Green Thumb delivered and planted about half of the requested material. Ellen can make a partial acceptance and allow Green Thumb an opportunity for a cure. Also, under the UCC [UCC 2-508(1), 2A-513(1)] the seller (Green Thumb) may cure within the contract time for performance. (Clarkson, Miller, Cross 2015) In other words they can legally fix the mistake within a realistic time and get paid as if nothing happened.
In Maria’s case I don’t think the UCC applies since we are talking about a service. Under contract breach laws I believe Maria could sue Salvador for compensatory damages equal to the amount she would have to pay another painter to paint her house correctly. So she could tell Salvador to start over or be on the hook to pay for another painter to paint the house.
For this situation, it appears Mad Larry received shipment and decided to see how well the hand-zingers would do in his store. He waited a very long time (8 months) to bring up the discrepancy in the shipment. Additionally, Mad Larry has observed bad sell-through of the hand zingers which implies he has sold some quantity to customers. Both the unreasonably long time before making a claim, and the fact that Larry has sold some of the zingers counts as acceptance of the shipment as-is with the discrepancies, so Larry is not entitled to an additional shipment of the whoopee cushions.
Green Thumb failed the perfect tender rule and delivered non-conforming goods and services. Planting of rose bushes constituted the non-conforming portion of the contract delivery. The boxwood bushes and gnomes were delivered and installed according to the terms of the contract, and represent a partial performance.
Green Thumb’s 1st recourse should be to offer cure in the form of replacing the rose bushes with junipers within the contract time period, or within a reasonable time thereafter.
Maria can certainly get Salvador to start over, even though he performed the services requested, because the paint colors are different than those specified in the contract. The color requirement of the paint job is an implied warranty if fitness for a specific purpose. This has two requirements to establish: 1) the seller knows that there is a specific purpose that the goods will be used. 2) The buyer is relying on the skill and judgment of the seller to select suitable goods.
In this case it was the responsibility of Salvador to paint the house the proper colors for the contract price. His mistake does not change the terms of service for the contract, so he needs to paint the house the proper colors for the original price.
Within our book (Clarkson, 2015), the UCC’s good faith provision, which can not be disclaimed, reads “Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement” (UCC 1-304). This says merchants are held to a higher standard of faith and honesty than nonmerchants. Given the provided information, Mad Larry and Crayzee Toys may have the invoice but require to details of the said contract. Not knowing the specific contract details does not allow assumptions to be made on what Mad Larry deserves/what Crayzee Toys should provide.
In this example (assuming there was an enforceable contract), under the UCC, it defines non conforming goods as goods or services delivered that are not in alignment with the purchase contract. If the buyer rejects the non conforming goods in a reasonable time after delivery, the buyer has no liability to pay for the goods rejected. When performance of a sales or lease contract falls short and disputes arise, it is then when courts look to the UCC and impose standards of good faith and reasonableness (when these details are not stated in the contract).
- Cure, Nonconforming Goods, Reasonable Grounds, Limits Rights to Reject Goods, and Legal Recourse
Although the UCC does not specifically define cure, it refers to the right of the seller or lessor to repair, adjust, or replace defective or nonconforming goods (UCC 2-508, 2A-513). Given the first example’s contract terms, cure would come into play there as well. The seller or lessor, has the right to attempt to cure a defect when the following are met:
A delivery is rejected because the goods were noncoforming
The time for performance has not yet expired
The seller or lessor provides timely notice to the buyer or lessee of the intention to cure
The cure can be made within the contract time for performance
After the performance time specified in the contract has expired and no cures have been made – the seller or lessor can, under reasonable grounds still cure the defects. This assumes that the buyer or lessee is acceptable to the cures.
In the example, Ellen has the right to reject goods and must inform (disclosed) Green Thumb of the specific defect(s). If disputes do arise, Ellen may then use the defect(s) as a defense – given that Green thumb could in fact cure. For Green Thumb to pursue legal recourse, we would be assuming that Green Thumb had not cured any defects and were under the assumption that they had fulfilled their obligations of the contract. Often times, contracts require mediation and arbitration before reaching the court – if this were the case, the court would most likely find the contract to be incomplete and nonenforceable.
- Reasonable Grounds, Limits Right to Reject Goods, Good Faith, and Nonconforming Goods
In the example noted in the text (Clarkson, 2015), EZ Office Supply has frequently accepted blue pens when the seller, Baxter’s Wholesale, did not have black pens in stock. In the given context, Baxter’s has reasonable grounds to believe that EZ will again accept such a substitute. Even if EZ rejected the substituted goods on one occasion, Baxter’s has reasonable grounds to believe that blue pens will be acceptable. Therefore, if EZ indicates that it will not accept blue pens, Baxter’s normally will have a reasonable time to obtain and tender black pens. The seller or lessor will sometimes tender nonconforming goods with some type of price allowance (discount). A discounted price can serve as the “reasonable grounds” to believe that the buyer or lessee will accept the nonconforming tender.
The contract between Maria and Salvador could result in the same. If Salvador had prior contracts with Maria and others, where colors were not of importance – Salvador would have reasonable grounds to believe that the contract had been performed. However, if the contract were not performed as described and under the contract, the colors used were not expected or the areas painted were painted the wrong colors, Maria would have her right to reject the goods (or service) – under UCC 2-605, 2A-514. Maria would then be acting in good faith to state the specific reasons for refusing to accept goods or services. Not being given the terms of this contract also makes the ruling for this dispute difficult.
If a buyer wants to reject goods because they do not conform to the contract, the rejection must occur before the buyer accepts the goods. According to the UCC, acceptance occurs when the buyer:
after a reasonable opportunity to inspect the goods indicates to the seller that the goods are conforming or that he [or she] will take them in spite of any non-conformity
does not reject the goods after a reasonable time for inspection has passed; or
acts in a way that is inconsistent with the seller’s ownership of the goods.
Clarkson, K., Miller, R., Cross, F. (2015). Business Law: Text and Cases. (13th ed.). Cengage Learning
Non Conforming Goods or Services – Commercial Litigation | Pierce ~ Gabriel Partners. (n.d.). Retrieved October 20, 2015, from http://www.pgp-law.com/nonconforming_Goods.html#.ViWjhxCrRmA
Draw the Law: Are Invoices Contracts? (2012, June 13). Retrieved October 20, 2015, from https://hawaiiesquire.wordpress.com/2012/06/13/draw-the-law-are-invoices-contracts/
LEGAL RECOURSE AND OTHER REMEDIES – SFWA. (n.d.). Retrieved October 20, 2015, from http://www.sfwa.org/other-resources/for-authors/writer-beware/legal/
Buyer’s Performance Under the UCC | Nolo.com. (n.d.). Retrieved October 20, 2015, from http://www.nolo.com/legal-encyclopedia/buyers-performance-under-the-ucc.html
Mad Larry’s Magic Shop vs. Crayzee Toys
Mad Larry will not get his free whoopee cushions. Mainly because according to UCC 2-602, “Rejection of goods (Links to an external site.) must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer (Links to an external site.) seasonably notifies the seller (Links to an external site.).” Mad Larry did not let the seller know within reasonable time that his order was incorrect. In fact, he thought it probably was OK but since it wasn’t a good investment, 8 months later he’s complaining about a breach of contract.
Last but not least, UCC 2-607 states that: “(3)Where a tender has been accepted:
(a) the buyer (Links to an external site.) must within a reasonable time after he discovers or should have discovered any breach notify the seller (Links to an external site.) of breach or be barred from any remedy.” Again, UCC supports the idea that Mad Larry should not get what he wants. Tough luck, Larry.
Ellen vs. Green Thumb Landscapers (GTL)
First off, if Ellen wanted to cancel the contract, she is entitled to do so according to UCC 2-106. However, the opportunity for cure is still there for Green Thumb Landscapers (referred to as GTL moving forward). Based on UCC 2-508, Legal Information Systems (n.d.) states that “where any tender or delivery by the seller (Links to an external site.) is rejected because non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer (Links to an external site.) of his intention to cure and may then within the contract (Links to an external site.) time make a conforming (Links to an external site.) delivery” (retrieved from this link (Links to an external site.)).
What this means is that GTL can still make things right. If Ellen wanted to cancel the contract of sales, I think GTL can still charge her for the part of the contract that he did get right (the garden gnomes and the subsequent labor related to their installation and cost).
Maria vs. Salvador
Maria can definitely get Salvador to start over. Salvador obviously breached the contract of sales that was put in place and delivered non-conforming goods which Maria is not willing to accept. According to UCC 2-508, cure and/or replacement should happen in cases “Where the buyer (Links to an external site.) rejects a non-conforming tender which the seller (Links to an external site.) had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conforming (Links to an external site.) tender.” The contract stated that 3 parts of the house were painted in specific colors and Salvador breached the contract by painting each section with the wrong color. He is now asking for only half the price but this was not the final product that Maria was expecting, so that doesn’t seem like an option.
This case is more complicated than that though, so let’s start by referring to UCC 2-607, which states that “(1) Rejection of goods (Links to an external site.) must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer (Links to an external site.) seasonably notifies the seller (Links to an external site.).” This means that Maria still has the right to reject the goods. However let’s keep in mind that the paint is already used, so the cost of the paint is gone. The question is the following: does this mean that Salvador has to incur in extra expenses in order to be compliant with the contract of sales? It is obviously a mistake made by Salvador due to lack of attention to detail… so I think he should be the one to pay.
When answering the possible outcomes of the three suggested scenarios, it is important to keep in mind that parties “may be bound not only by terms they expressly agreed on, but also by terms implied by custom, such as customary method of weighing or measuring particular goods” (Clarkson, Miller, & Cross, 2015, p. 417). It is also important to note that unlike common law, “remedies under the UCC are cumulative in nature – meaning that the aggrieved party is not limited to one exclusive remedy” (Clarkson et al., 2015, p. 417).
- Mad Larry’s Magic Shop sends an invoice to Crayzee Toys, signed by Mad Larry, requesting 200 whoopee cushions to be delivered within 2 weeks. One week later, Mad Larry receives a shipment from Crayzee Toys containing 100 whoopee cushions and 100 hand-zingers. 8 months later, Mad Larry notices that hand-zingers are selling poorly, but whoopee cushions are flying off the shelves. He calls Crayzee Toys and demands Crayzee send him 100 whoopee cushions without charge. Will Mad Larry get his free whoopee cushions?
Acceptance was demonstrated because Mad Larry failed to reject the hand-zingers in a reasonable amount of time. (Clarkson et al., 2015, p, 424). Mad Larry was obviously trying to sell the hand-zingers because he was comparing the sales, so that constitutes acceptance as well. He could have done a partial acceptance by accepting only the whoopee cushions and returning the hand-zingers, but that does not seem to be the choice he made.
Because he did not return the items in what appears to be a reasonable amount of time, I would say he would not receive the free whoopee cushions. He really is not entitled to them for free anyways. There is no mention of damaged merchandise, just the wrong merchandise being sent. However, there is no mention of any communication of this with the seller.
- Ellen hires Green Thumb Landscapers to landscape her front yard. She requests Green Thumb plant 10 juniper bushes, 5 boxwood bushes, and 3 garden gnomes. Green Thumb writes up a contract:
- $50 – plants
- $15 – gnomes
- $200 – labor
Green Thumb shows up at Ellen’s house the next week and plants 10 rose bushes, 5 boxwood bushes, and 3 garden gnomes. She calls Green Thumb that afternoon telling them she refuses to pay. Does Green Thumb have any legal recourse?
When the contract is sent back by Green Thumb, they were ambiguous as to the number of plants, the number of gnomes, and the length of labor. Ellen is lucky she ended up with the number of gnomes and boxwood bushes she requested. The problem lies with receiving rose bushes rather than juniper bushes. She appeared to accept the contract because she did not respond back to them being more specific or changing details. The labor is written in the contract at an amount of $200. They performed the labor, so Green Thumb should be paid. According to Patricia Thompson (2012), “it is crucial for an owner to have: (1) objective contract provisions entitling it to withhold payment; and (2) appropriate documentation and/or designer certification entitling it to withhold amounts it would otherwise have to disburse” (para. 13). I do not think that Ellen meets these qualifications.
- Maria hires Salvador to paint her house for $1,000. She draws up a contract for Salvador to paint the exterior walls green, the shutters purple, and the front door orange. Salvador paints the walls orange, the shutters green, and the front door purple. Realizing his mistake, Salvador asks Maria to pay him $500. Maria refuses and demands he start over. Can Maria get Salvador to start over?
Salvador had an obligation to paint the house in the colors specified in the contract. He did not do this so he did not satisfy the perfect tender rule. By definition this means that “the seller was obligated to deliver goods that conformed wit the terms of the contract in every detail” (Clarkson et al, p. 419). Maria rejected the painting job, so Salvador has the ability and should cure within a reasonable amount of time. This means in this situation that he would repaint the items in the correct color scheme. It was his mistake. Once the job is done correctly, then Maria should pay the full $1000.
Thompson, P., (2012, July 12). Contractual and federal statutory support for an owner’s right to withhold payment of work performed. Retrieved from http://www.cfjblaw.com/contractual-and-federal-statutory-support-for-an-owners-right-to-withhold-payment-for-work-performed-07-07-2012/
The Uniform Commercial Code has been adopted by all the states and is one of the best examples of efforts to create a uniform set of laws governing commercial transactions (Clarkson, 2015). One of the UCC’s key provisions is the “good faith provision” that sets out that every contract covered by the UCC “imposes an obligation of good faith in its performance or enforcement.” (Clarkson, 2015, p. 417). This implies that merchants have a higher standard of performance than non merchants and that all must deal in honest, above board transactions where goods are transferred and delivered and accepted and paid for. So, in these three examples:
- The basic duty of the seller is to deliver the goods called for – in this case, a signed invoice existed specifying 200 whoopee cushions but the seller only delivered 100 of them along with 100 of another item. So the seller did not deliver the correct goods. Tender of delivery means when the seller makes the goods available and gives the buyer notice to take delivery — normally all goods specified in the contract must be delivered in a single delivery (Clarkson, 2015, p. 418). So Mad Larry in this case, could have failed to take delivery of the goods when received because the shipment failed to conform to the invoice (i.e. contract) — he could have rejected the entire shipment or accepted the 100 whoopee cushions and sent the 100 hand zingers back to Crayzee Toys. This case represents an issue in the acceptance process – since Mad Larry retained the goods and didn’t notify Crayzee Toys of the error upon receipt; and Mad Larry didn’t reject the goods within a reasonable period of time; and because Mad Larry actually accepted the goods by reselling the goods … all of this allows Crayzee Toys to believe they had fulfilled their UCC obligations. The situation could have been resolved by May Larry notifying them upon receipt of the goods and giving them chance to cure the situation. Overall, a buyer must reject the goods within a reasonable period of time after delivery.
- Green Thumb needs to work with Ellen to get to resolution. Here the contract was inaccurate or imprecise and thus what was delivered by the seller didn’t meet the buyer’s expectations. Green Thumb should remove the rose bushes and install juniper bushes instead. This would essentially be a partial acceptance where Ellen can accept the boxwood bushes and the gnomes. She does the right thing in refusing payment until the situation is remedied although she should have been more careful in the original contract to specify what was meant by “plants”. Green Thumb gets the opportunity to fix things per the original intent of the transaction – they would not be able to recover the cost of the rose bushes since the contract is imprecise.
- A color disaster. Here again, the seller did not deliver the correct goods to the buyer and thus the buyer has the right to reject the performance. Salvador should have the opportunity to cure the situation by repainting the house in order to secure his full painting bid payment.
Example 1 –
Mad Larry placed an order by sending an invoice to Crayzee Toys and Crayzee Toys did not deliver on the items agreed upon written in the invoice. According to Clarkson (2015), if Mad Larry would of informed Crayzee Toys of the incorrect items received Crayzee Toys would have been contractually obligated to swap out the mis-shipped zingers for the ordered whoopee cushions. Since according to the description Mad Larry tried to sell the incorrect items and due to the inability to move the product he demanded a free replacement in an unreasonable timeframe that shipment was received Mad Larry is stuck with the inventory.
Example 2 –
In this case the example states that Ellen hires Green Thumb Landscapers to perform landscape activities at her house. Green Thumb writes up a contract and delivers without Ellen’s acceptance. However, in this case since Ellen hired the landscaping firm and a contract was and Ellen clearly benefited from the services and had an opportunity to reject the contract but did not so silence as acceptance would be ruled in Green Thumbs favor. According to Clarkson (2015), silence as acceptance is where the offeree benefits from services performed and knowing that those services were performed in expectations of services.
Example 3 –
Maria clearly contracts for painting the house in a certain way. Salvador performs the work of painting the house but falls short of completing the terms of the contract specifically laid out by Maria in how the house was to be painted. In this case since Salvador failed to complete the terms of the contract Maria would be able to get Salvador to start over for no additional money since the contract was not completed as written up and agreed upon by Salvador since he started the job and knew what colors to buy but not the proper order of use.
Mad Larry made a firm offer with crayzee toys to deliver 200 whoopee cushions within a time period of 2 weeks. The offer was considered a firm offer due to the fact that it was in writing and signed by Mad Larry’s Magic Shop. The part that becomes blurry is I am unaware if Crayzee toy’s signed that they received the package (but considering the amount is probably well over $1,000 I am going to assume they did so we can make this a confirmed firm offer.) Crayzee Toys accepted the offer, but the acceptance may become invalid due to mirror image law. The mirror image law requires that the terms of acceptance exactly match those of the offer (200 whoopee cushions) even if the acceptance includes terms additional to for different from those contained in the offer, however the UCC does away with the mirror image rule in domestic sales contract. (Since we do not know if this sale is domestic or not we can not use this for or against the case. Time of contract formation- under the common law contracts and the UCC an acceptance is effective on dispatch, so a contract is created when the acceptance is transmitted. Under the CISG, in contrast, a contract is created not at the time of acceptance is transmitted but only on its receipt by the offerer. Finally we get to “When acceptance is revoked” if a buyer accepts a shipment of goods and later discovers a defect, acceptance can be revoked. The revocation allows the buyer to pass the risk of loss back to the seller. Because Mad Larry told Crayzee Toys they will ship them 200 whoopee cushions, and this was not carried through. They are required to ship the 100 missing whoopee cushions. Due to the fact they did not ship the correct items they did not carry out their end of the contract, regardless of the time frame. Besides it would not be good practice to not correct a wrong order when they are the ones at fault.