Also known as:revokes its acceptance · revoked its acceptance · revoking its acceptance · revocation of acceptance
Written by attorneys · grounded in primary & secondary sources — see below
A contractual remedy available to a buyer of goods that undoes an earlier acceptance when the goods prove nonconforming. The remedy requires timely notice to the seller and is available only before any substantial change in the goods not caused by their own defects. Upon proper exercise the buyer obtains the same rights and duties with respect to the goods as if the buyer had rejected them at the outset.
Sources & Authorities
How it applies
Common Examples
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Timely Notice After Delayed Cure
Ridgeway Partners accepted a shipment of specialized valves after the seller promised a software fix within ten days. When the fix never arrived and the valves continued to malfunction, Ridgeway Partners sent written notice of revocation three weeks later while the valves remained in their original condition. The notice satisfied the requirement that revocation occur within a reasonable time after discovery of the ground and before any substantial change not caused by the defect itself.
Security Interest After Revocation
Royal Crest Hotels paid the full price for custom minibars that failed to meet energy specifications. After proper revocation the hotel chain retained possession of the units and asserted a security interest covering the price paid plus inspection and storage expenses. It then resold the units in a commercially reasonable manner and applied the proceeds to its claim against the seller.
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Uniform Acts
Study Supplements
Market Price at Place of Arrival
Redline Automotive accepted a load of engines at its Detroit facility and later revoked acceptance upon discovering latent defects. When measuring damages the court used the market price prevailing in Detroit at the time the buyer learned of the breach rather than the price at the original place of tender.
Revocation in Maritime Equipment Sale
East River Steamship accepted turbine units for its vessels after the manufacturer assured prompt correction of vibration problems. When the turbines caused repeated shutdowns and the promised repairs never materialized, the buyer revoked acceptance and sought contract remedies. The revocation preserved the buyer's right to treat the transaction as if acceptance had never occurred.
East River Steamship Corp. v. Transamerica Delaval, Inc.476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986)
Common questions
Frequently Asked
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What duties does a buyer assume after properly revoking acceptance?+
A buyer who revokes acceptance obtains the same rights and duties with regard to the goods as if the buyer had rejected them. This includes the obligation to hold the goods with reasonable care while the buyer stops payment and demands return or a refund.
Supporting sources
Does a buyer retain a security interest after revoking acceptance?+
Yes. A buyer who justifiably revokes acceptance holds a security interest in the goods for the price paid and reasonable expenses of inspection, receipt, transportation, care, and custody. The buyer may hold the goods and resell them in the same manner as an aggrieved seller.
Supporting sources
When must revocation of acceptance occur to be effective?+
Revocation must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in the condition of the goods not caused by their own defects. The buyer must also notify the seller.
Supporting sources
How does revocation affect the measure of damages for accepted goods?+
After revocation the market price used to calculate damages is determined as of the place of arrival rather than the original place of tender. This rule aligns damages with the location where the buyer actually received and discovered the nonconformity.
Supporting sources
5 Ohio St. 3d 181, 5 O.B.R. 398, 449 N.E.2d 1289Contracts
…it: “(1) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; “(B) Revocation of acceptance must occur 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…
ContractsRemedies · Remedies under the UCCNEXTGENIntermediate