Sales and Leases | 101
7. Open Time for Payment and Shipping under Reservation Unless otherwise agreed, payment is due at the time when and the place where the buyer is to receive the goods, regardless of the place of delivery. This rule’s purpose is to give the buyer a chance to inspect the goods before paying; to that end, the buyer generally need not pay until she has inspected the goods, or at least has had a reasonable chance to inspect them, unless inspection would be inconsistent with the contract’s terms. Of course, this general rule is subject to some qualifications, particularly regarding the seller’s right to ship under reservation. [U.C.C. § 2-310(a), cmt. 1, 3 (1951); 2 Hawkland UCC Series § 2-310:2, Westlaw (database updated June 2021).] a. Seller’s Right to Ship the Goods under Reservation Unless otherwise agreed, if authorized to send the goods, the seller may ship them under reservation and tender any documents of title. If the seller does ship under reservation, then the carrier cannot release the goods to the buyer until the price is paid. Conversely, the buyer need not pay until she has exercised or waived her right to inspect the goods, or at least has had a reasonable opportunity to inspect—unless inspection would be inconsistent with the contract’s terms ( e.g. , the buyer has agreed to pay before inspection). [U.C.C. § 2-310(b) (1951); 2 Hawkland UCC Series § 2-310:2, Westlaw (database updated June 2021).] b. Rule if Delivery Is through Documents of Title Unless otherwise agreed, if delivery is authorized and made via documents of title, as opposed to delivery of the goods themselves, then payment is due when and where the buyer is to receive the documents. Under this rule, the buyer will not necessarily have an opportunity to inspect the goods before paying for them. Delivery may be authorized and made by documents of title if, for instance, the buyer has agreed to pay upon receiving documents of title. This rule applies regardless where the goods themselves are to be received. If the documents are to be received electronically, then payment is due (1) when the buyer receives the documents and (2) at the seller’s place of business or, if none, the seller’s residence. [U.C.C. § 2-310(c) (2015); 2 Hawkland UCC Series § 2-310:3, Westlaw (database updated June 2021).] c. Rule if Seller Is Required or Authorized to Ship the Goods on Credit Unless otherwise agreed, if the seller is required or authorized to ship the goods on credit, the credit period starts to run from the time of shipment. For purposes of this rule, the time of shipment is usually deemed to be the later of (1) the date on the invoice or (2) the date the invoice is dispatched. Thus, the parties may delay the start of the credit period by postdating the invoice. [ See U.C.C. § 2-310(d), cmt. 5 (1951); 2 Hawkland UCC Series § 2- 310:4, Westlaw (database updated June 2021).]
Made with FlippingBook - Online Brochure Maker