(1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance, then, with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (section 4-2-612), the buyer may cancel, and, whether or not he has done so, may in addition to recovering so much of the price as has been paid:
(a) "Cover" and have damages under section 4-2-712 as to all the goods affected whether or not they have been identified to the contract; or
(b) Recover damages for nondelivery as provided in this article (section 4-2-713).
(2) Where the seller fails to deliver or repudiates, the buyer may also:
(a) If the goods have been identified, recover them as provided in this article (section 4-2-502); or
(b) In a proper case, obtain specific performance or replevy the goods as provided in this article (section 4-2-716).
(3) On rightful rejection or justifiable revocation of acceptance, a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care, and custody and may hold such goods and resell them in like manner as an aggrieved seller (section 4-2-706).
Source: L. 65: p. 1339, § 1. C.R.S. 1963: § 155-2-711.
ANNOTATION
Law reviews. For article, "One Year Review of Contracts", see 38 Dicta 161 (1961). For article, "Buyer-Secured Party Conflicts Under Section 9-307(1) of the Uniform Commercial Code", see 46 U. Colo. L. Rev. 333 (1974-75).
Buyer may recover amount paid. This section provides that where the buyer justifiably revokes acceptance, the buyer may recover so much of the price as he has paid. Irrigation Motor & Pump Co. v. Belcher, 29 Colo. App. 343, 483 P.2d 980 (1971).
The section provides that the buyer has a security interest in goods in his possession or control for any payments made. Irrigation Motor & Pump Co. v. Belcher, 29 Colo. App. 343, 483 P.2d 980 (1971).
Because of buyer's security interest, the buyer is not required to return the goods or to hold them for seller's disposition. Irrigation Motor & Pump Co. v. Belcher, 29 Colo. App. 343, 483 P.2d 980 (1971).
Buyer vested with security interest upon revocation of acceptance. If a revocation of acceptance of a mobile home under § 4-2-608 is justifiable, subsection (3) vests the buyer with a security interest in the home, and such an interest authorizes continued possession to preserve the collateral, pursuant to § 4-9-207 (1) and (4), subject to the seller's right to an offset for the rental value of the home. Keen v. Modern Trailer Sales, Inc., 40 Colo. App. 527, 578 P.2d 668 (1978).
There is no requirement under the provisions of the UCC that on revocation of acceptance a buyer must deliver title to the goods to the seller. Under this section, a buyer retains a security interest in goods in his possession for any payment made on their price and may resell the goods in the same manner as an aggrieved seller. And, where a buyer does not exercise his right of resale, generally all that is required is that the buyer assign to the seller all of his interest in the goods. Jackson v. Rocky Mtn. Datsun, Inc., 693 P.2d 391 (Colo. App. 1984).
Failure properly to reject bars recovery of expenses. Where, by failure properly to reject, purchaser is deemed to have accepted the goods, there is no basis for recovery of expenses incident to rejection. Surplus Elecs. Corp. v. Gallin, 653 P.2d 752 (Colo. App. 1982).
Statute as basis for jurisdiction. See Stroh v. Am. Recreation & Mobile Home Corp., 35 Colo. App. 196, 530 P.2d 989 (1975).
Applied in Cargill, Inc. v. Stafford, 553 F.2d 1222 (10th Cir. 1977); Danburg v. Realties, Inc., 677 P.2d 439 (Colo. App. 1984).