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BREACH AND REMEDY FOR THE TENDER OF NONCONFORMING GOODS UNDER THE UNIFORM COMMERCIAL CODE - AN ECONOMIC APPROACH

NCJ Number
47195
Journal
Harvard Law Review Volume: 91 Issue: 5 Dated: (MARCH 1978) Pages: 960-1001
Author(s)
G L PRIEST
Date Published
1978
Length
42 pages
Annotation
THE MANNER IN WHICH COURTS HAVE INTERPRETED AND APPLIED UNIFORM COMMERCIAL CODE PROVISIONS GIVING A BUYER THE RIGHT TO RESCIND A CONTRACT WHEN THE GOODS TENDERED DEVIATE FROM THOSE CONTRACTED FOR IS EXAMINED.
Abstract
THE PROBLEM OF NONCONFORMING TENDERS IS ANALYZED FROM AN ECONOMIC PERSPECTIVE AND THE CIRCUMSTANCES ARE EXPLORED IN WHICH REFUSAL OF THE GOODS BY THE BUYER IS A MORE EFFICIENT REMEDY THAN DAMAGES. THE UNIFORM COMMERCIAL CODE'S NONCONFORMING TENDER PROVISIONS ARE DESCRIBED AS A COMPROMISE BETWEEN COMMON LAW'S RIGID INSISTENCE ON PERFECT TENDERS AND PROPOSALS THAT THE SALES LAW BE MADE RESPONSIVE TO MODERN COMMERCIAL RELATIONSHIPS. THE VARIOUS INCONSISTENCIES BETWEEN THE LETTER OF THE CODE AND THE OBJECTIVE OF EFFICIENCY ARE DETAILED. ALSO PROVIDED ARE THE RESULTS OF A STUDY OF ALL REPORTED TRIAL AND APPELLATE DECISIONS BETWEEN 1954 AND 1976 IN WHICH THE BUYER ATTEMPTED TO RETURN THE GOODS BECAUSE THEY FAILED TO CONFORM TO CONTRACTURAL DESCRIPTIONS. THE PROVISIONS OF THE CODE WERE DRAFTED TO CONTROL A DIVERSE SET OF SALES TRANSACTIONS AND MOST OF THE PROVISIONS ARE GENERALLY WORDED TO REQUIRE JUDICIAL INTERPRETATION IN INDIVIDUAL CASES. IT IS SHOWN THAT THE EXISTING DECISIONS ARE CONSISTENT WITH ASPECTS OF COST MINIMIZATION AS FAR AS CAN BE DISCERNED FROM THE FACTS REPORTED IN THE WRITTEN OPINIONS. IT IS CONCLUDED THAT THE COURTS HAVE BEEN STRONGLY INFLUENCED BY THE ADVANTAGES OF MINIMIZING COSTS IN THEIR INTERPRETATION AND APPLICATION OF THE LEGAL DOCTRINES OF THE CODE, AND THAT IT IS THE APPLICATION OF THE PROVISIONS IN PRACTICE AND NOT NECESSARILY THE LETTER OF THE CODE THAT DETERMINES THEIR EFFECT. SUBSTANTIAL FOOTNOTING IS PROVIDED. (KBL)

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