Title 13 — Uniform Commercial Code

(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this division on parol or extrinsic evidence (Secti…

Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply. (a…

A seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty. A seller may not exclude or limit the operation of this section with respect to injury to …

(1) Unless otherwise agreed the term F.O.B. (which means Afree on board@) at a named place, even though used only in connection with the stated price, is a delivery term under which: (a) When the term is F.O.B. the place of shipment, the seller must at that place ship the goods i…

(1) The term C.I.F. means that the price includes in a lump sum the cost of the goods and the insurance and freight to the named destination. The term C. & F. or C.F. means that the price so includes cost and freight to the named destination. (2) Unless otherwise agreed and even …

Arrival@; Warranty of Condition on Arrival Under a contract containing a term C.I.F. or C. & F. (1) Where the price is based on or is to be adjusted according to Anet landed weights,@ Adelivered weights,@ Aout turn@ quantity or quality or the like, unless otherwise agreed the sel…

(1) Unless otherwise agreed a term for delivery of goods ex-ship (which means from the carrying vessel) or in equivalent language is not restricted to a particular ship and requires delivery from a ship which has reached a place at the named port of destination where goods of the…

"Overseas". COL120106 (1) Where the contract contemplates overseas shipment and contains a term C.I.F. or C. & F. or F.O.B. vessel, the seller unless otherwise agreed must obtain a negotiable bill of lading stating that the goods have been loaded on board or, in the case of a ter…

Sale@ or Terms of Like Meaning, Unless Otherwise Agreed: (a) The seller must properly ship conforming goods and if they arrive by any means he must tender them on arrival but he assumes no obligation that the goods will arrive unless he has caused the nonarrival; and (b) Where wi…

(1) Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale. COL120106 (2) The delivery to seller of a proper letter of credit suspends the buyer's obligation to pay. If the letter of credit is dishonored, the seller may on seaso…

Creditors. (1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is (a) A sale on approval if the goods are delivered primarily for use, and (b) A sale or return if the goods are delivered primarily …

(1) Under a sale on approval unless otherwise agreed: (a) Although the goods are identified to the contract the risk of loss and the title do not pass to the buyer until acceptance; and (b) Use of the goods consistent with the purpose of trial is not acceptance but failure season…

(1) In a sale by auction if goods are put up in lots each lot is the subject of a separate sale. (2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptanc…

Application of this Section. Each provision of this division with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situ…

(1) Except as provided in subdivisions (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the buyer's rights to recover the goods under this division (Sections 2502 and 2716). (2) A credi…

"Entrusting". (1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title …

Goods. (1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract refers even though the goods so identified are nonconforming and he has an option to return or reject them. Such identification ca…

Deliver, or Insolvency. (1) Subject to subdivision (2) and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which he has a special property under the provisions of the immediately preceding section may on making and keeping g…

(1) Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery. The manner, time and place for tender are determined by the agreement and this divisio…

COL120106 Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them at a particu- lar destination, then unless otherwise agreed he must (a) Put the goods in the possession of such a carrier and make such a cont…

(1) Where the seller has identified goods to the contract by or before shipment: (a) His procurement of a negotiable bill of lading to his own order or otherwise reserves in him a security interest in the goods. His procurement of the bill to the order of a financing agency or of…

COL120106 (1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights of the shipper in t…

(1) Tender of delivery is a condition to the buyer's duty to accept the goods and, unless otherwise agreed, to his duty to pay for them. Tender entitles the seller to acceptance of the goods and to payment according to the contract. (2) Where the payment is due and demanded on th…

ment. (1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery. (2) Where…

(1) Where the contract requires or authorizes the seller to ship the goods by carrier (a) If it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are COL120106 duly delivered to the carrier even though the shipme…

(1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance. (2) Where the buyer rightfully revokes acceptance he may to the extent of any deficiency in his effec…

COL120106 (1) Unless otherwise agreed tender of payment is a condition to the seller's duty to tender and complete any delivery. (2) Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands paymen…

(1) Where the contract requires payment before inspection nonconformity of the goods does not excuse the buyer from so making payment unless the nonconformity appears without inspection. (2) Payment pursuant to subdivision (1) does not constitute an acceptance of goods or impair …

(1) Unless otherwise agreed and subject to subdivision (3), where goods are tendered or delivered or identified to the contract for sale, the buyer has a right before payment or acceptance to inspect them at any reasonable place and time and in any reasonable manner. When the sel…

Payment. Unless otherwise agreed documents against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it is payable more than three days after presentment; otherwise, only on payment.

In furtherance of the adjustment of any claim or dispute: (a) Either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence has the right to inspect, test and sample the goods including such of them as may be in the pos…

Subject to the provisions of this division on breach in installment contracts (Section 2612) and unless otherwise agreed under the sections on contractual limitations of remedy (Sections 2718 and 2719), if the goods or the tender of delivery fail in any respect to conform to the …

(1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller. (2) Subject to the provisions of the two following sections on rejected goods (Sections 2603 and 2604), (a) After rejection a…

(1) Subject to any security interest in the buyer (subdivision (3) of Section 2711), when the seller has no agent or place of business at the market of rejection a merchant buyer is under a duty after rejection of goods in his possession or control to follow any reasonable instru…

Subject to the provisions of the immediately preceding section on perishables if the seller gives no instructions within a reasonable time after notification of rejection the buyer may store the rejected goods for the seller's account or reship them to him or resell them for the …

(1) The buyer's failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection or to establish breach COL120106 (a) Where the seller could have cured it if st…

(1) Acceptance of goods occurs when the buyer: (a) After a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or (b) Fails to make an effective rejection (subdivisi…

Breach After Acceptance; Notice of Claim or Litigation to Person Answerable Over. (1) The buyer must pay at the contract rate for any goods accepted. (2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a nonconformity canno…

(1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it (a) On the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or (b) Without discove…

(1) A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the perfor- mance of either party the other may in writing demand adequate assu…

When either party repudiates the contract with respect to a per- formance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may: (a) For a commercially reasonable time await performance by the repudiating party; or…

(1) Until the repudiating party's next performance is due he can retract his repudiation unless the aggrieved party has since the repudiation canceled or materially changed his position or otherwise indicated that he considers the repudiation final. (2) Retraction may be by any m…

(1) An installment contract is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause Aeach delivery is a separate contract@ or its equivalent. (2) The buyer may reject any installment which is…

COL120106 Where the contract requires for its performance goods identified when the contract is made, and the goods suffer casualty without fault of either party before the risk of loss passes to the buyer, or in a proper case under a Ano arrival, no sale@ term (Section 2324) the…

(1) Where without fault of either party the agreed berthing, loading or unloading facilities fail or an agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable but a commercially reasonable substitute is available, …

Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in delivery or nondelivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contr…

(1) Where the buyer receives notification of a material or indefinite delay or an allocation justified under the preceding section he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of th…

Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this division.

(1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this division (Section 2705). (2) Where the seller discovers that the buyer has receiv…

Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (Section 2612), t…