Sales and Leases | 144
[2 Hawkland UCC Series § 2-602:1, Westlaw (database updated June 2021).]
Example : A manufacturer contracted to sell a stated quantity of intravenous pumps to a hospital. After taking delivery of the pumps, the hospital stored them for six months without any further communication to the manufacturer. Finally, after six months, the hospital notified the manufacturer that it wished to reject the pumps. Here, the hospital’s rejection is likely untimely. The hospital had more than ample time to inspect the pumps and ascertain any nonconformity. The sheer passage of time led the manufacturer to reasonably conclude that the transaction was closed. [ Adapted from Ardus Medical, Inc. v. Emanuel Ct. Hosp. Auth. , 558 F.Supp.2d 1301 (S.D. Ga. 2008).] 4. Buyer’s Exercise of Ownership as to Rightfully Rejected Goods Once the buyer rightfully rejects the goods, it is wrongful against the seller for the buyer to exercise ownership as to any commercial unit of the rejected goods. It is not an exercise of ownership, however, for the buyer to comply with § 2-603 (detailing a merchant buyer’s duties as to goods rightfully rejected) or to exercise her rights under § 2-604 (setting forth a buyer’s salvage option as to rightfully rejected goods). Similarly, it is no exercise of ownership for the buyer to fulfill her obligations as discussed in Obligations of Buyer in Physical Possession of Rightfully Rejected Goods, infra . [U.C.C. § 2-602(2)(a)-(b) (1951); Merchant Buyer’s Duties as to Rightfully Rejected Goods, Buyer’s Option to Salvage Rightfully Rejected Goods, infra .] a. Evaluating Whether Buyer Has Exercised Ownership over Rightfully Rejected Goods In determining whether the buyer has exercised ownership over rightfully rejected goods, courts apparently apply the same essential standard as discussed in Act Inconsistent with the Seller’s Ownership, supra . [ See 2 Hawkland UCC Series § 2-602:2, Westlaw (database updated June 2021).] Example : A farmer purchased a combine from a dealer. After the farmer took delivery and commenced to use the combine, the combine kept malfunctioning. Finally, the farmer effectively rejected the combine and sought to return it for a refund. After the dealer refused to take the combine back, the farmer kept using the combine for months as though it were his. In addition, the farmer claimed depreciation deductions for the combine on his federal tax returns—which he could rightly do only if he owned the combine. On similar
Made with FlippingBook - Online Brochure Maker