Question

List and define the exceptions to non-conforming goods being considered a breach

Answer 1

The seller is obliged to deliver goods that confirmed to the terms of the contract in every detail and the rule is called perfect tender rule. In the case of non-conforming goods, the buyer has the right to accept the goods, reject the entire shipment or accept part and reject part under UCC. The exceptions to non-conforming goods being considered a breach includes the below.

Agreement of the parties: According to this exception, if the parties have agreed not to reject the defective goods or parts if the seller can replace or repair them in a reasonable period of time, the perfect tender rule will not apply and the nonconforming goods will not be considered as a breach.

Cure: Cure is defined as the seller’s right to repair, replace or adjust the defective or nonconforming goods. If the delivery is rejected due to nonconforming goods and still time is left for performing the contract, the seller can express the intentions to cure and ensure the same before the performance time is expired. If the time for performance has expired, there is still reasonable time left to cure if the seller has reasonable grounds like price allowance on nonconforming goods to believe that the buyer would accept the nonconforming goods.

Substitution of carriers: In the absence of agreed manner of delivery due to no fault of either party but a commercially reasonable substitute is available, the seller must use the substitute performance though it is nonconforming to the contract.

Installment contracts: Installment contracts allow delivery and payment in separate lots and the buyer can reject the installment only if the nonconformity substantially impairs the value of the installment and cannot be cured. If the buyer accepts nonconforming installment and fails to inform the seller of cancellation, the contract would be reinstated.

Commercial Impracticability: This includes the occurrences which are unseen by both the parties while making the contract which makes the perfromance of the contract commercially impracticable. Delay in delivery and nondelivery would not be considered as breach in such situations, but the seller must inform the buyer about the delay or nondelivery as soon as practicable.