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Seller's Right to Cure Under the Uniform Commercial Code

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  • 0:01 UCC Article 2
  • 1:28 Seller's Right to Cure
  • 3:10 Time for Delivery
  • 4:11 Reasonable Grounds to…
  • 5:45 Lesson Summary
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Lesson Transcript
Instructor: Ashley Dugger

Ashley is an attorney. She has taught and written various introductory law courses.

The Uniform Commercial Code's Article 2 covers contracts for the sale of goods. This includes the seller's right to cure, or correct, a delivery. This lesson explains when and why a seller has the right to cure nonconforming goods.

UCC Article 2

Gordon owns and runs Gordon's Green Thumb. It's a nursery that sells a wide variety of plants. Gordon purchases plants from various suppliers, and then sells the plants to his customers. This means that Gordon is involved in the sale of goods, or movable property.

There are many different types of businesses involved in the sale of goods. For businesses like Gordon's, it's helpful to be familiar with the Uniform Commercial Code, or UCC. The UCC is a uniform act that covers sales and other commercial transactions.

The UCC is not law. It's a set of model laws meant to be used as a guide in order to encourage uniformity and consistency between state laws. All 50 states have enacted at least portions of the UCC, though different states have enacted different portions. This means that state laws regarding commercial contracts aren't exactly alike, but they are similar.

For Gordon, it's most helpful for him to be familiar with the UCC's Article 2, entitled 'Sales'. This article addresses contracts for the sale of goods. Gordon needs a general knowledge of the provisions, so he doesn't run into any legal problems when he's buying and selling his plants.

Seller's Right to Cure

Let's say that Gordon contacts Tammy's Tulips and enters a contract with Tammy. Gordon orders 1,000 orange tulip bulbs to be delivered on or before November 15. On November 1, Gordon receives a delivery from Tammy's Tulips. When Gordon opens the boxes to inspect the tulips, he discovers that they are yellow, rather than orange, tulips. Gordon contacts Tammy's Tulips to let Tammy know he is rejecting this shipment of yellow tulips. The tulips aren't what Gordon ordered, and are therefore nonconforming goods. Under Article 2, a seller must provide exactly what the buyer ordered. This is known as the perfect tender rule.

So, what can Tammy's Tulips do about this problem? Does Tammy have any right to correct, or cure the problem? Or is the contract simply over due to Tammy's breach of the agreement?

Generally speaking, Gordon and Tammy's deal won't be lost. Tammy has an opportunity to fix the problem and save the contract. This is known as the seller's right to cure. The UCC allows a right to cure in certain situations because the UCC was created to promote and salvage commercial agreements, rather than discourage or impede. The right to cure allows the seller a reasonable amount of time to repair the contract without causing undue damage to the buyer.

Let's take a closer look at when a seller has a right to cure.

Time for Delivery

Remember that Tammy delivered the yellow tulip bulbs on November 1. The general rule is that the seller may cure any nonconformity before the time for performance has expired.

Gordon and Tammy's contract allowed the orange tulip bulbs to be delivered on or before November 15. This means that Tammy automatically has a right to cure. She has 14 days left to fulfill her end of the agreement. However, Tammy must let Gordon know that she still intends to fulfill the contract, and she must make delivery of the orange tulip bulbs by November 15.

Let's say Gordon contacts Tammy to let her know he's rejecting the shipment of yellow tulips. Tammy apologizes and tells Gordon she'll deliver orange tulips, but she can't get them until November 18. Gordon now has the option to agree to an extension of time, or he can cancel the contract.

Reasonable Grounds to Expect Acceptance

Now let's say that Gordon and Tammy have a lengthy business relationship. Gordon has ordered from Tammy on many occasions. In the past, when Tammy couldn't deliver specifically what Gordon ordered, she sent a close alternative. Gordon has always accepted the alternative.

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