In: Operations Management
What are the buyer's remedies when the seller delivers nonconforming goods? What can the seller do to preserve the contract?
The remedies that buyers have when the seller sends non-conforming goods include:-
1. Coverage of damage can be argued unless the seller can prove that the buyer was in bad faith.
2. Recovery of damages for non-delivery can be issued by the buyer in the case of non-conforming good being sent by the seller. After the fact that they allow the seller reasonable time to either replace the good or pay the coverage price and act in good faith.
3. buyer can recover the difference between cover price and the contract price and essentially all the incidental or consequential damages that occurred.
Sellers can essentially do the following:-
1. Sellers can essentially accept or reject the request for replacement or coverage of damage proving the buyer has acted in bad faith.
2. Ask for time to replace or cover the goods and replace them with conforming goods
3. Accept the return in part for the goods.
4. If a request is initiated after the return period, the seller can reject the request and will still be acting in good faith.