The initial step in determining whether a buyer may revoke his or her acceptance of goods or conduct is to assess whether there exists a nonconformity in the contract. Richardson v. Mast, 252 Neb. 114, 560 N.W.2d. 488 (1997).
Revocation of acceptance was timely where buyer had allowed seller's representative to install computer plotter to ascertain extent of damage. Design Data Corp. v. Maryland Cas. Co., 243 Neb. 945, 503 N.W.2d 552 (1993).
A buyer who elects to exercise his right to revoke acceptance has a duty not to exercise ownership over the goods. Wendt v. Beardmore Suburban Chevrolet, 219 Neb. 775, 366 N.W.2d 424 (1985).
A buyer may revoke acceptance of a lot of commercial goods only if there is some defect or nonconformity in the article that substantially impairs its value. Havelock Bank v. Western Surety Co., 217 Neb. 560, 352 N.W.2d 855 (1984).
Prior Uniform Statutory Provision: Section 69(1)(d), (3), (4), and (5), Uniform Sales Act.
Purposes of Changes:
To make it clear that:
1. Although the prior basic policy is continued, the buyer is no longer required to elect between revocation of acceptance and recovery of damages for breach. Both are now available to him or her. The non-alternative character of the two remedies is stressed by the terms used in the present section. The section no longer speaks of "rescission", a term capable of ambiguous application either to transfer of title to the goods or to the contract of sale and susceptible also of confusion with cancellation for cause of an executed or executory portion of the contract. The remedy under this section is instead referred to simply as "revocation of acceptance" of goods tendered under a contract for sale and involves no suggestion of "election" of any sort.
2. Revocation of acceptance is possible only where the nonconformity substantially impairs the value of the goods to the buyer. For this purpose the test is not what the seller had reason to know at the time of contracting; the question is whether the nonconformity is such as will in fact cause a substantial impairment of value to the buyer though the seller had no advance knowledge as to the buyer's particular circumstances.
3. "Assurances" by the seller under paragraph (b) of subsection (1) can rest as well in the circumstances or in the contract as in explicit language used at the time of delivery. The reason for recognizing such assurances is that they induce the buyer to delay discovery. These are the only assurances involved in paragraph (b). Explicit assurances may be made either in good faith or bad faith. In either case any remedy accorded by this article is available to the buyer under the section on remedies for fraud.
4. Subsection (2) requires notification of revocation of acceptance within a reasonable time after discovery of the grounds for such revocation. Since this remedy will be generally resorted to only after attempts at adjustment have failed, the reasonable time period should extend in most cases beyond the time in which notification of breach must be given, beyond the time for discovery of nonconformity after acceptance, and beyond the time for rejection after tender. The parties may by their agreement limit the time for notification under this section, but the same sanctions and considerations apply to such agreements as are discussed in the comment on manner and effect of rightful rejection.
5. The content of the notice under subsection (2) is to be determined in this case as in others by considerations of good faith, prevention of surprise, and reasonable adjustment. More will generally be necessary than the mere notification of breach required under the preceding section. On the other hand the requirements of the section on waiver of buyer's objections do not apply here. The fact that quick notification of trouble is desirable affords good ground for being slow to bind a buyer by his or her first statement. Following the general policy of this article, the requirements of the content of notification are less stringent in the case of a nonmerchant buyer.
6. Under subsection (2) the prior policy is continued of seeking substantial justice in regard to the condition of goods restored to the seller. Thus the buyer may not revoke his or her acceptance if the goods have materially deteriorated except by reason of their own defects. Worthless goods, however, need not be offered back and minor defects in the articles re-offered are to be disregarded.
7. The policy of the section allowing partial acceptance is carried over into the present section and the buyer may revoke his or her acceptance, in appropriate cases, as to the entire lot or any commercial unit thereof.
Point 3: Section 2-721.
Point 4: Sections 1-204, 2-602, and 2-607.
Point 5: Sections 2-605 and 2-607.
Point 7: Section 2-601.
Definitional Cross References:
"Buyer". Section 2-103.
"Commercial unit". Section 2-105.
"Conform". Section 2-106.
"Goods". Section 2-105.
"Lot". Section 2-105.
"Notifies". Section 1-201.
"Reasonable time". Section 1-204.
"Rights". Section 1-201.
"Seasonably". Section 1-204.
"Seller". Section 2-103.