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to take delivery from the carrier. [U.C.C. § 2-503(3) (1951); 2 Hawkland UCC Series § 2-503:3, Westlaw (database updated June 2021).]
6. Rules if Contract Requires Seller to Deliver Documents Special rules apply if the contract expressly requires documents of title, or the peculiar circumstances or a relevant usage of trade implies such a requirement ( e.g. , the buyer has agreed to pay against tender of the documents). Here, with one exception in the context of bills of lading (§ 2-323(2)), the seller must tender all documents in the correct form, as determined by the agreement, considering any relevant course of dealing, course of performance, and usage of trade. Also, tender through customary banking channels suffices. In this case, if a draft (such as a check) is dishonored, then the result is tantamount to nonacceptance or rejection of the goods. To illustrate tender through customary banking channels, oftentimes the seller will commit the documents to a financial institution in the buyer’s area. This institution, in turn, will tender the documents to the buyer only after the buyer pays for the goods. [U.C.C. § 2-503(5) (1951); 2 Hawkland UCC Series § 2-503:5, Westlaw (database updated June 2021).] Payment by the Buyer The parties may, of course, agree on how the buyer is to tender payment. Absent agreement, Article 2 provides that tender suffices if made via any manner or means that, in the ordinary course of business, is current. Examples include wire transfer, check, letter of credit, and so on. The seller may, however, demand payment in legal tender (unless otherwise agreed). If she does, then the buyer must have a reasonable extension of time to procure legal tender for payment. [U.C.C. § 2-511(2) (1951); 2 Hawkland UCC Series § 2-511:2, Westlaw (database updated June 2021).] 1. Payment by Check Subject to § 3-310 (covered more thoroughly in Quimbee’s Payment Systems Outline), payment by check (other than a cashier’s check, teller’s check, or certified check) is conditional. Thus, payment by check is defeated, as between the parties, if on due presentment the check is dishonored. Put another way, upon tender of a check (other than a cashier’s check, teller’s check, or certified check), the buyer’s payment obligation is suspended in the amount of the check. If the check is honored, the obligation is discharged in that amount. If the check is dishonored, the obligation is revived, and the buyer is likely in breach of contract. If the buyer pays by certified check, teller’s check, or cashier’s check, and the seller accepts the check, then the buyer’s obligation is discharged in the amount of the check, as though the buyer had paid that amount in cash. [ See U.C.C. § 2-511(3) (1951); 2 Hawkland UCC Series § 2-511:3, Westlaw (database updated June 2021).]
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