TO: Business Leader

FROM: Ferriter & Ferriter LLC

DATE: April 24, 2006

RE: Contracts Under the Uniform Commercial Code ______________________________________________________________________________

It is not uncommon in the ordinary course of business between two commercial entities for a buyer to accept nonconforming goods with the understanding that the nonconformity will be remedied on a timely basis. First, however, the buyer who accepts goods and tender for the goods must, within a reasonable time after a defect is discovered, inform the seller of the defect or breach, or be barred from any remedy. See U.C.C. § 2-607.

Under U.C.C. § 2-608, a buyer may revoke acceptance of a nonconforming good with impaired value if the buyer accepted the good ?[o]n reasonable assumption that its nonconformity would be cured and it has not been seasonably cured.? Revocation, however, must also take place within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by its own defect. See U.C.C. § 2-608(2).

?Reasonable time? is defined under U.C.C. § 1-204 as the time necessary for taking action in light of the nature, purpose, and circumstances of such action. In determining whether a reasonable revocation of acceptance has occurred, the court in Jauregui v. Bobb?s Piano Sales & Service, 2006 WL 335600 (Fla. Dist. Ct. App. 2006), recently held that a buyer has the right to receive what he wanted and paid for, and the seller is not entitled to supply a nonconforming good even if the nonconforming good is worth just as much as the equivalent conforming good.

If you have any questions, please feel free to call.