Also known as: rightfully reject · rightfully rejected · rightfully rejecting · valid rejection · proper rejection
Written by attorneys — see sources below.
A buyer's proper refusal to accept nonconforming goods under a sales contract. The refusal must occur within a reasonable time after delivery and be accompanied by seasonable notice to the seller. Once effected, the buyer incurs no further contractual obligations regarding the goods and gains access to specified remedies including cancellation and recovery of the price paid.
Raymond Ramos ordered custom shelving units from Redwood Bank for his retail store. Upon delivery he inspected the units and found them missing the specified brackets. Ramos promptly emailed notice of rejection to the seller. Because the rejection was rightful, Ramos had no further obligations to store or return the units.
Renata Russo paid in full for a shipment of fabric from Radiance Media. The fabric arrived with incorrect dye lots. Russo seasonably notified the seller of her rejection and canceled the contract. She recovered the full price paid plus the right to pursue cover damages.
Rowan Russell received a pallet of electronic components from Redline Automotive. After inspection revealed mismatched specifications, Russell rejected the goods and incurred expenses for testing and temporary storage. Those inspection and custody costs qualified as recoverable incidental damages.
Rosa Ruiz contracted to buy replacement engines from Radiant Technologies. After the seller repudiated, Ruiz rejected the tendered units and purchased substitute engines at a higher market price. She recovered the difference between the contract price and the cover price as damages.
Richard Oloffson, doing business as Rich's Ag Service, entered into an agreement with Clarence Coomer on April 16, 1970, under which Coomer would sell and deliver 40,000 bushels of corn to Oloffson in October and December 1970. Oloffson described the deal as two separate contracts of 20,000 bushels each, priced at $1.12 3/4 per bushel for delivery by October 30 and $1.12 1/4 per bushel for delivery by December 15. Coomer confirmed the total quantity but stated he would deliver as much as possible by October 30 with the remainder by December 15. On June 3, 1970, Coomer notified Oloffson that he would not plant corn that season because of excessive wetness and instructed Oloffson to secure the corn from another source if Oloffson had commitments to third parties. The market price for corn for future delivery stood at $1.16 per bushel on that date. When Oloffson contacted Coomer again in September 1970 regarding the corn, Coomer repeated that delivery would not occur. Oloffson mailed confirmations of the April agreement to Coomer and had his attorney demand performance, but Coomer did not respond to either communication. Following the passage of both October 30 and December 15 without any deliveries, Oloffson obtained replacement corn by purchasing 20,000 bushels at $1.35 per bushel and 20,000 bushels at $1.49 per bushel. Oloffson brought suit against Coomer in the circuit court of Bureau County. After a trial without a jury, the court entered judgment for Oloffson in the amount of $1,500 plus costs. Oloffson appealed the judgment to the Illinois Appellate Court for the Third District.
View caseThe buyer has no further obligations with regard to the goods. The rejection discharges the buyer from any duty to accept or pay the contract price, although the buyer must still hold the goods with reasonable care for a reasonable time if physical possession was taken.
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The buyer may cancel the contract and recover any price already paid. The buyer may also cover by purchasing substitute goods or recover market-price damages, plus incidental damages such as inspection and storage expenses.
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No. The buyer need only hold the goods with reasonable care at the seller's disposition for a sufficient time. Immediate return is not required, and the buyer may assert a security interest to the extent of payments and expenses incurred.
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Rightful rejection occurs before acceptance and prevents the buyer from becoming obligated under the contract. Revocation of acceptance occurs after acceptance but restores the buyer to the same position as if rejection had occurred, provided the revocation is timely and before substantial change in the goods.
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…the seller’s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach. Towing back to…