Also known as: wrongful rejection · wrongfully reject · wrongfully rejected · wrongful rejection of goods
Written by attorneys · grounded in primary & secondary sources — see below
An improper refusal by a buyer to accept conforming goods or a failure to follow statutory procedures for rejection in a sale of goods. The seller's remedies under Article 2 are triggered and the buyer may be liable for damages.
Metro Data Center ordered customized cloud servers from Nimbus Cloud with specific configurations and pre-installed software due on a fixed date. Nimbus delivered servers lacking the required configuration and software. Metro rejected the shipment immediately and refused payment. Nimbus sued for the contract price. Because the tender did not conform, Metro's rejection was proper and Nimbus cannot recover the price.
Koppers contracted to buy chemicals from Nobs Chemical. After delivery Koppers rejected the shipment. Nobs sued for the price but the court found the rejection proper. Nobs therefore recovered damages for non-acceptance rather than the contract price and held the identified goods for the buyer.
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Rejection is wrongful when the goods conform to the contract or when the buyer fails to give seasonable notice or exercises ownership over the goods after rejection. A proper rejection shifts all further responsibility back to the seller.
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The seller may recover damages for non-acceptance under UCC § 2-708 and incidental damages under § 2-710. If the seller is not entitled to the price under § 2-709, damages for non-acceptance are still available.
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No. After a timely and proper rejection the buyer has no further obligations regarding the goods beyond holding them with reasonable care for a short time. The seller bears all post-rejection storage and handling expenses.
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Moving goods to a sales floor and selling them, or thawing and serving them at an event, amounts to an exercise of ownership that is wrongful as against the seller. Such acts violate the rule that any exercise of ownership after rejection is wrongful.
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