Also known as:nonconforming tender · non-conformity of tender · nonconformities of tender · nonconforming goods tender · tender nonconformity
Written by attorneys — see sources below.
A failure of goods or their delivery to conform to the sales contract, for which a buyer who has accepted the goods and given the required notification may recover damages measured by the loss resulting in the ordinary course of events as determined in any reasonable manner.
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How its tested
Common Examples
2
Damages After Acceptance of Defective Motors
Nexus Technologies ordered high-torque motors from Northstar Logistics under a written contract specifying exact torque ratings. Northstar delivered motors with lower torque that still met minimum catalog specs. Nexus accepted the motors, used them in production, and later notified Northstar of the shortfall. Nexus then recovered the difference in value between the motors received and those promised as damages measured in a commercially reasonable way.
Recovery for Nonconforming Signal Equipment
Nightingale Healthcare purchased emergency signaling devices from Nexus Financial under a contract requiring specific output levels. Nexus delivered units that fell short on output but were installed and used for several months. Nightingale notified Nexus of the shortfall and later sought damages for the resulting loss in ordinary course. The court allowed recovery measured by any reasonable method after acceptance.
Federal Signal Corp. v. Safety Factors, Inc.125 Wash. 2d 413, 886 P.2d 172, 180 (Wash. 1994)
Safety Factors, Inc., a company engaged in renting, repairing, and selling equipment, purchased seven Night Warrior light towers from Federal Signal Corporation for rental and sale. Before the purchase, Safety Factors president Steve Fors discussed the capabilities and features of the new Night Warrior model with Federal Signal representative David Robbins. Fors compared it to the older TPME model that Safety Factors had used successfully.
Safety Factors tested the towers through a full field of motion for approximately five minutes without incident before placing them into service. Problems began in late February 1989 during the first rental to Tucci & Sons. These included the restrike problem in which lamps failed to relight after an interruption or shut down once reaching full intensity, and one tower had reversed fuel lines. Safety Factors contacted Federal Signal service manager Herbert Moore, who visited the site and traced the restrike problem to the Lima generator. By May 1989 a local service company retrofitted all seven towers with a voltage regulator device at no cost.
After the restrike fix, excessive oil leakage from the diesel motors caused repeated shutdowns because vibration loosened the bolts securing the crankcase to the generator mount. All Power, the authorized service agent for engine manufacturer Hatz, accepted units for repair beginning in October, but the repairs proved unsuccessful after nine to twelve months of attempts. By the end of July 1991, Hallett had made this repair to every tower. Additional problems occurred from the outset of use. The electric winches failed to raise and lower the lights reliably. They were not watertight. They had underpowered motors whose gears stripped under binding. Ignitions mounted on the generator vibrated apart. Short exhaust pipes rusted out and fell off. The long loose main power cable was easily pinched when lowered in the dark.
Federal Signal sued Safety Factors to recover the purchase price of the towers and other items. Safety Factors counterclaimed for breach of warranty and damages. Following a bench trial the court entered judgment for Federal Signal in the amount of $74,446.64 after allowing limited repair credits. The Court of Appeals certified the case to the Washington Supreme Court on October 12, 1993.
What remedies follow when a buyer accepts goods that contain a nonconformity of tender?
The buyer may recover damages for the loss resulting in the ordinary course of events from the seller's breach. Recovery is measured in any manner that is reasonable. The buyer must have given the required notification under UCC 2-607(3).
Supporting sources
Does a nonconformity of tender always allow the buyer to reject the entire shipment?
Yes under the perfect tender rule when the tender fails in any respect to conform. The buyer may reject the whole, accept the whole, or accept any commercial unit and reject the rest. Exceptions exist for installment contracts and cure rights.
Supporting sources
When does a seller retain the right to cure after a nonconforming tender is rejected?
The seller may cure if the contract time for performance has not expired and seasonable notice of intent to cure is given. After the time expires the seller may still cure if it had reasonable grounds to believe the original tender would be acceptable and gives seasonable notice of a substitute conforming tender within a further reasonable time.
Supporting sources
How is the measure of damages calculated for a nonconformity of tender under UCC 2-714(1)?
Damages equal the loss resulting in the ordinary course of events from the seller's breach. The amount may be proved in any reasonable manner. Breach of warranty is often measured by the difference between the value of the goods as accepted and their value as warranted.
Supporting sources
284 N.Y.S.2d 222
…to cure a defective performance. Under this provision, even where the contract period has expired and the buyer has rejected a nonconforming tender or has revoked an acceptance, the seller may “substitute a conforming tender” if he had “reasonable grounds to believe” that the nonconforming tender would be accepted and “if he seasonably…