In terms of basic UCC performance obligations,
sellers and lessors are obligated to
transfer and deliver
conforming goods, and
buyers and lessees are obligated to
accept and pay
for conforming goods in accordance with the terms of the contract.
As we will discuss in the next chapter, UCC section 2-711(1) gives a buyer who receives nonconforming goods the right to
cancel the contract and then, if he wants, seek judicial remedies that give him the benefit of the bargain if the seller fails to
Likewise, a seller who tenders goods but the buyer does not accept them, can cancel the contract
Acceptance of Goods
The buyer has a right to inspect the goods before she accepts or pays for them.
The buyer and seller can agree on the time,
place, and manner in which inspection will be made.
If no agreement is made, then the buyer may inspect the goods at any
and place and in any reasonable manner.
See UCC 2-513(1)—when the seller is required or authorized to send the goods to the buyer, the inspection may be after
(so accepting the package from UPS does not mean that the buyer automatically accepts the goods from the
seller—unless that is what you agreed to in the contract)
Acceptance of goods occurs
when a buyer, after having a reasonable opportunity to inspect the goods, either indicates that
he will take them or fails to reject them.
In order to reject them, the buyer must notify the seller of the rejection and specify
the defect or nonconformity.
So what are conforming goods?
Under the common law, the parties had to “substantially perform” under the contract.
Under the UCC we are looking for
The UCC calls this the “
perfect tender rule
” which means that if goods or tender of delivery fails in any respect to conform
to the contract, the buyer has the right to either (1) accept the goods, (2) reject the entire shipment, or (3) accept part and
Because the perfect tender rule is so rigid, the UCC includes numerous exceptions to the rule. The perfect tender rule is more specific
and demanding then the “substantial performance” rule we discussed under the common law, however, because of the numerous
exceptions, the name “perfect” is really an unsuitable name
Exception # 1 Good Faith
UCC contracts must be performed in “Good faith” and with reasonable commercial standards of fair dealing.
Compare this with the common law contracts, which only obligates the parties to perform according to the express terms of
There is no breach of contract unless the parties fail to meet those terms.
The UCC recognizes that certain situations may develop that are not expressly provided for in a contract and therefore