Question

In: Accounting

On May 1 (the required delivery date), Seller delivered goods that Seller reasonably believed were acceptable....

On May 1 (the required delivery date), Seller delivered goods that Seller reasonably believed were acceptable. The next day, Seller was told tat the goods were nonconforming. Seller immediately gave notice that the improper performance would be cured. Under these facts:

a. Seller cannot cure. A seller cannot cure an improper performance.

b. Seller cannot cure. A seller can cure only if a cure is done within the original contract time.

c. Seller can cure if Seller tenders confirming goods to the buyer within a reasonable time.

d. Seller can cure whenever Seller chooses to do so.

Solutions

Expert Solution

The Article 2 of the Uniform Commercial Code, a seller must conform to the perfect tender rule. This means that the seller must provide exactly what the buyer had requested. If the seller provides non-conforming goods, the buyer can reject those goods. However, the UCC requires the buyer to notify the seller of the rejection and the reason. The UCC also allows the seller a reasonable opportunity to cure the goods of the defect or thing that caused the non-conformance. The seller has the right to cure within a reasonable time under the following situations:

  1. Goods are non-conforming and rejected by the buyer, but here is still time under the contract to provide conforming goods.
  2. Where the seller had reasonable grounds to believe that the goods he delivered were conforming.

This question falls under category 2 above. The seller reasonably believed the goods were acceptable. So the seller has the right to cure in this case. Therefore, option a and b are wrong.

Option c is also wrong. The seller cannot cure whenever he chooses to. He can cure within a reasonable time only.

Option c is the correct answer. Seller can cure if Seller tenders confirming goods to the buyer within a reasonable time.

ekkarill92 answered 2 years ago
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