Sales and Leases Outline (First Edition)

Sales and Leases | 137

accept the goods by taking physical possession of the goods after inspecting them, especially if the buyer then puts the goods to use—apart from use for purposes of testing, troubleshooting, and the like. Yet the mere acts of taking possession and using the goods are not, by themselves, acceptance. [ See U.C.C. § 2-606(1)(a), cmt. 3 (1951); 2 Hawkland UCC Series §§ 2-606:2, 2-606:4, Westlaw (database updated June 2021); but see Failure to Make an Effective Rejection, infra .] Examples : (1) A distributor of bearings contracted to buy a stated quantity of bearings from Corporation A. The contract required that Corporation A, and no one else, manufacture the bearings, because the distributor’s customers trusted only Corporation A. When Corporation A delivered the bearings, it came to light that Corporation B manufactured a significant percentage of them. Upon learning of this fact, the distributor refused to pay for the bearings. Eventually, the distributor did send a letter to Corporation A acknowledging its duty to pay, but even after sending this letter, the distributor persisted in refusing to pay. On similar facts, a federal district court held that the distributor had accepted the bearings by acknowledging its obligation to pay for them. Generally, the obligation to pay, by its nature, attaches only after acceptance. [ See YCB Int’l, Inc. v. UCF Trading Co., Ltd. , 904 F.Supp.2d 870 (N.D. Ill. 2012).] (2) A buyer contracted to buy timber from a seller. The seller delivered the timber on time, but some of the timber did not conform to the contract. Even so, the buyer processed and used most of the timber, having paid a substantial portion of the purchase price. On similar facts, a state supreme court held that the buyer accepted the timber. Not only did the buyer pay for the timber, but she also took possession of it and put it to use as though it were hers. These acts unequivocally signified acceptance. [ See Konitz v. Claver , 954 P.2d 1138 (Mont. 1998).] Compare : A church ordered a shipment of choir robes from a manufacturer, paying up front for the robes. When the manufacturer delivered the robes, the church’s representatives took possession of the robes and, a short time later, inspected them, finding many nonconformities and defects in the robes. Thus, the church sought to return the robes to the manufacturer for a refund. On similar facts, an appellate court found that the church had not accepted the robes. Certainly, the church took possession of the robes upon their delivery. However, the church held the robes for only long enough to inspect them, ascertain the defects in them, and reject them. As this rejection occurred within a reasonable time for inspection, there was no acceptance. [ Adapted from Zion Temple First

Made with FlippingBook - Online Brochure Maker