The Uniform Commercial Code

Uniform Commercial Code (UCC) Cure

The buyer cannot reject goods without giving the seller a chance to fix whatever problem might form the basis for a rejection. The cure must be done in a reasonable time, and the buyer must not suffer undue damage as a result.

Buyers may not be able to reject goods as nonconforming without giving the seller an opportunity to remedy the issue. Under the perfect tender rule, sellers have significant rights under the UCC to cure or correct a defective shipment of goods that will still require the buyer to make payment and honor the contract. Despite the rule requirements of perfect tender on the part of the seller, the seller has enough time and proper notice to fix problems, usually by making a substitution or confirming tender or delivery promptly. Curing the defect can mean repairing, adjusting, or replacing the nonconforming good. It can also involve cutting the price on the condition that the buyer accept the imperfect good.

Sometimes sellers and buyers disagree on the nonconforming nature of the seller's tender of goods to the buyer. There can be disputes on the need to cure and what the cure may need to be to achieve perfect tender. The buyer and seller each must give reasonable notification to the other to determine facts and preserve evidence. Each has the right to inspect, test, or sample any allegedly nonconforming goods, including those that are in the possession of the other. Both parties may agree to a third-party inspection or survey to judge whether goods conform to the contract, and they may also agree to let that third party's ruling be binding on the issue. For example, for the purchase of a big-ticket item such as an airline purchasing an airplane from a manufacturer, both sides would usually agree to a third-party inspection if there are any disputes at the time of delivery regarding the quality of the construction of the plane. The third party would then inspect the plane in a timely fashion and certify it as meeting standards or not, identifying repairs or fixes needed to bring it up to standard. Both parties would usually agree ahead of time to be bound by what the third-party inspector determines.

The UCC requires that the party bringing the complaint must be put in as good a position as if the other party had fully performed. So even if the seller has the right to cure, the seller must do so in such a way that the buyer is as well off as if there had not been a nonconforming good. If the cure affects the buyer in other ways, then the seller may be responsible for the other damages.

For example, suppose a seller delivers a time-sensitive good that is nonconforming. Not only may the buyer ask for the defective goods to be replaced or refunded, but the buyer may also ask to recover the expenses of handling and forwarding the defective goods. The buyer may even ask to recover lost profits because of the nonconformity of the first tender.

Sellers' Remedies to Cure under the UCC

The UCC gives sellers several remedy options if a buyer rejects delivered goods as nonconforming.