Title 41, Uniform Commercial Code

Unless otherwise agreed: 1. Payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery. 2. If the seller is authorized to send the goods, the seller may ship them under reservation, and may tender the…

1. An agreement for sale which is otherwise sufficiently definite (subsection 3 of section 41-02-11) to be a contract is not made invalid by the fact that it leaves particulars of performance to be specified by one of the parties. Any such specification must be made in good faith…

1. Subject to subsection 2, there is in a contract for sale a warranty by the seller that: a. The title conveyed shall be good, and its transfer rightful; and b. The goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the ti…

1. Express warranties by the seller are created as follows: a. Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or…

1. Unless excluded or modified (section 41-02-33), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section, the serving for value of food or drink to be consumed eit…

If the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an …

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 whenever reasonable as consistent with each other; but subject to the provisions of this chapter on parol or extrinsic evidence (section…

Warranties whether express or implied shall be construed as consistent with each other 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: 1. E…

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 …

1. Unless otherwise agreed, the term F.O.B. (which means "free 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 in…

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 th…

Under a contract containing a term C.I.F. or C. & F.: 1. If the price is based on or is to be adjusted according to "net landed weights", "delivered weights", "outturn" quantity or quality, or the like, unless otherwise agreed the seller must reasonably estimate the price. The pa…

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 t…

1. If 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 term C.I.F. or C. & F., recei…

Under a term "no arrival, no sale" or terms of like meaning, unless otherwise agreed: 1. The seller must properly ship conforming goods and if they arrive by any means the seller must tender them on arrival but the seller assumes no obligation that the goods will arrive unless th…

1. Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale. 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 seasonable notifi…

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. b. A "sale or return" if the goods are delivered primarily for resale. 2…

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. b. Use of the goods consistent with the purpose of trial is not acceptance but failure seasonably t…

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. If a bid is made while the hammer is falling in acceptance o…

Each provision of this chapter 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 when the provision refers to such title. Insofar as situations are not covered by the…

1. Except as provided in subsections 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 chapter (sections 41-02-50 and 41-02-95). 2. A credi…

1. A purchaser of goods acquires all title which the purchaser's 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 to …

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 the buyer has an option to return or reject them. Such identification can…

1. Subject to subsections 2 and 3 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 the buyer has a special property under the provisions of section 41-02-49 may on making and keeping good a tender of any unpaid por…

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 the buyer to take delivery. The manner, time, and place for tender are determined by the agreement and this c…

If the seller is required or authorized to send the goods to the buyer and the contract does not require the seller to deliver them at a particular destination, then unless otherwise agreed the seller must: 1. Put the goods in the possession of such a carrier and make such a cont…

1. If the seller has identified goods to the contract by or before shipment: a. The seller's procurement of a negotiable bill of lading to the seller's own order or otherwise reserves in the seller a security interest in the goods. The seller's procurement of the bill to the orde…

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 the goods …

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

1. If 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 the seller's intention to cure and may then within the contract time make a conforming delivery. 2. If the …

1. If the contract requires or authorizes the seller to ship the goods by carrier: a. If it does not require the seller to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is u…

1. If 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. If the buyer rightfully revokes acceptance, the buyer may to the extent of any deficiency in the buye…

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 payment in legal …

1. If the contract requires payment before inspection, nonconformity of the goods does not excuse the buyer from so making payment unless: a. The nonconformity appears without inspection; or b. Despite tender of the required documents the circumstances would justify injunction ag…

1. Unless otherwise agreed and subject to subsection 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 seller …

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: 1. 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 po…

Subject to the provisions of this chapter on breach in installment contracts (section 41-02-75) and unless otherwise agreed under the sections on contractual limitations of remedy (sections 41-02-97 and 41-02-98), if the goods or the tender of delivery fail in any respect to conf…

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 41-02-66 and 41-02-67): a. After reject…

1. Subject to any security interest in the buyer (subsection 3 of section 41-02-90), 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 the merchant buyer's possession or control to follow any …

Subject to the provisions of section 41-02-66 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 the seller or resell them for the seller's…

1. The buyer's failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes the buyer from relying on the unstated defect to justify rejection or to establish breach: a. If the seller could have cured it if stated sea…

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 the buyer will take or retain them in spite of their nonconformity; b. Fails to make an effective rejection (subsecti…

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, cannot be revoked because of it unless the acceptance was on the reasonable assumption …

1. The buyer may revoke the buyer's acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the buyer if the buyer has accepted it: a. On the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or…

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 performance of either party, the other party may in writing demand adequate …