Sales and Leases | 260
that the promise to repair or remedy is not a warranty at all, and thus, the cause of action here accrues when the seller breaches that remedial promise. [2 Hawkland UCC Series § 2- 725:2, Westlaw (database updated June 2021).] Example : A retailer contracted to buy widgets from a manufacturer. The agreement provided that “the widgets shall be free of material defects for five years from the date of tender of delivery.” Four and a half years after tender of delivery, the retailer discovered a defect in the widgets. The defect could not have been discovered before the retailer actually discovered it. Here, the cause of action accrued, and the statute of limitations began to run, when the retailer discovered the defect. The retailer thus has four years from that point to sue. But if the retailer could reasonably have discovered the defect sooner than it did, then the statute of limitations would have started running at the time the manufacturer tendered delivery. [ Adapted from 2 Hawkland UCC Series § 2-725:2, Westlaw (database updated June 2021).] Implied Warranties as Not Extending to Future Performance Courts generally hold that implied warranties ( e.g. , implied warranties of merchantability and fitness for a particular purpose) do not explicitly extend to future performance. Thus, breach of these warranties occurs at tender of delivery. [2 Hawkland UCC Series § 2-725:2, Westlaw (database updated June 2021).] b. Special Rules for Goods Sold through Distributive Chains In determining when a cause of action accrues, special rules apply to goods sold through distributive chains—for instance, from a manufacturer to a distributor to a retailer to the end user. Here, courts are divided over precisely when the cause of action accrues (at least in cases where the goods are defective, as in many breach-of-warranty cases). In most courts, the breach occurs when the end user purchases the goods. In a minority of courts, the breach occurs at the sale from the manufacturer to the first intermediate seller (retailer, distributor, wholesaler, etc.). [2 Hawkland UCC Series § 2-725:2, Westlaw (database updated June 2021).] c. Accrual in Cases of Anticipatory Repudiation If the breach consists of an anticipatory repudiation, the courts are divided over when the cause of action accrues. In some courts, the cause of action accrues at the time of the repudiation. Other courts hold that the cause of action accrues at the end of the commercially reasonable time for the aggrieved party to await the repudiating party’s
Made with FlippingBook - Online Brochure Maker