Black-letter propositions
- 01
Before acceptance, a buyer may reject a nonconforming single delivery, but the seller may cure within contract time or sometimes beyond it with reasonable grounds.
- 02
An installment may be rejected only for substantial impairment that cannot be cured; the whole contract is breached only if impairment substantially affects the whole.
- 03
Acceptance occurs after reasonable inspection or failure to reject and limits remedies; revocation requires substantial impairment plus qualifying assumption or difficulty discovering.
- 04
Risk of loss follows agreement, breach rules, shipment or destination terms, and merchant or nonmerchant delivery rules.
- 05
A shipment contract requires proper carrier delivery and notice; a destination contract requires tender at destination.
Use this attack sequence under time
Frame the issue
Identify goods, delivery term, and conformity.
Resolve the next checkpoint
Determine tender, inspection, rejection, acceptance, and notice chronologically.
Resolve the next checkpoint
Test seller's right to cure.
Resolve the next checkpoint
Classify installment or single delivery.
Finish the conclusion
Allocate risk before identifying the casualty bearer.
Common wrong turns
- Perfect tender is not absolute after acceptance.
- FOB location determines shipment versus destination.
- Risk of loss is not the same as title.
Worked example
A seller ships conforming goods FOB seller's city. They are destroyed in transit without fault after proper carrier delivery.
This is a shipment contract; risk generally passed to the buyer when the seller properly delivered to the carrier and satisfied shipment duties.
Practice this topic
Rejection, cure and installments
UCC 2-601 says that, subject to installment-contract provisions and remedy limits, if the goods or tender fail in any respect to conform to the contract the buyer may reject the whole, accept the whole, or accept any commercial unit and reject the rest. UCC 2-508(1) lets the seller who tenders non-conforming goods before the time for performance expires seasonably notify the buyer of intent to cure and make a conforming delivery within the contract time. Section 2-508(2) gives a further reasonable time to substitute a conforming tender if the seller had reasonable grounds to believe the tender would be acceptable, with or without a money allowance.
UCC 2-612(2) lets the buyer reject an installment if the non-conformity substantially impairs its value and cannot be cured, but the buyer must accept it if the seller gives adequate assurance of cure. Section 2-612(3) makes it a breach of the whole when non-conformity substantially impairs the value of the whole contract.
Risk of loss
UCC 2-509(1) says that where the contract authorizes shipment by carrier and does not require delivery at a particular destination, risk passes to the buyer when the goods are duly delivered to the carrier. Where it requires delivery at a destination, risk passes when the goods are duly tendered there. Section 2-509(2) covers goods held by a bailee.
UCC 2-510(1) says where a tender fails to conform so as to give a right of rejection, the risk of loss remains on the seller until cure or acceptance. Section 2-510(2) allows a buyer who rightfully revokes acceptance to treat risk as having rested on the seller from the beginning, to the extent of any deficiency in insurance coverage.
Frequently asked questions
What is the controlling rule for perfect tender, cure, installment contracts, and risk of loss?+
UCC sales analysis follows tender, inspection, rejection or acceptance, cure, and risk-of-loss rules rather than common-law substantial performance alone.
How should I analyze perfect tender, cure, installment contracts, and risk of loss on the bar exam?+
Identify goods, delivery term, and conformity. Test seller's right to cure. Classify installment or single delivery. Allocate risk before identifying the casualty bearer.
What is the perfect tender rule?+
If goods or tender fail in any respect to conform, the buyer may reject the whole, accept the whole or accept any commercial unit and reject the rest, under UCC 2-601.
What does UCC 2-508(1) allow a seller to do?+
Seasonably notify the buyer of an intent to cure and make a conforming delivery within the contract time after a rejected non-conforming tender.
When does the seller get extra time to cure?+
When the buyer rejects a tender the seller had reasonable grounds to believe would be acceptable, with or without a money allowance, under UCC 2-508(2).
When may a buyer reject an installment?+
If the non-conformity substantially impairs the value of that installment and cannot be cured, but the buyer must accept it if the seller gives adequate assurance of cure, under UCC 2-612(2).