Walters, a grower of Christmas trees, contracted to supply Traynor with “top-qua
ID: 2455256 • Letter: W
Question
Walters, a grower of Christmas trees, contracted to supply Traynor with “top-quality trees.” When the shipment arrived and was inspected, Traynor discovered that some of the trees were not top quality. Within 24 hours, Traynor notified Walters that he was rejecting the trees that were not top quality. Walters did not have a place of business or an agent in the town where Traynor was. Christmas was only a short time away. The trees were perishable and would decline in value to zero by Christmas Eve. Walters did not give Traynor any instructions, so Traynor sold the trees for Walter’s account. Traynor then tried to recover from Walters the expense he incurred in caring for and selling the trees.
When is a buyer entitled to reject a shipment? Did Traynor have the right to reject the trees?
What are a buyer’s duties after rejecting goods? Did Traynor comply with the rules for merchants?
Explanation / Answer
If tender of the goods conforms in every respect to the contract, i.e. type of goods, time of delivery, method of delivery, etc., then typically the Buyer must accept the goods.2However, if there is any defect in the tender of the goods the Buyer has the right to reject the whole lot, accept the whole lot, or accept any commercial unit or units and reject the rest. This ability of the Buyer to reject the goods in light of any defect, no matter how slight, is known as the “perfect tender rule.”
Thus, refering to the above provisions, Traynor is entitled to reject the Trees.
In order to exercise the right of rejection, a Buyer must seasonably notify the Seller that the Buyer is rejecting the goods. This notice must state with sufficient particularity the grounds for the rejection, i.e. the problem with the goods. As discussed below, failure to provide this notification may result in the Buyer being stuck with goods it neither wants nor needs. Additionally, the Buyer must exercise this right of rejection in “good faith” and not for the sole purpose of escaping from an unwise bargain that had previously been entered into.
Traynor notified Walters that he was rejecting the trees that were not top quality. Walters did not have a place of business or an agent in the town where Traynor was. Thus, Traynor had obliged with his liability to notification to Seller. So, he complied with the rules for merchants.
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