The Tender Trigger: What Delivery Facts Put Performance in Issue
Tender is the seller’s legally sufficient offer of the required performance; what follows depends on the goods’ conformity, the delivery term, and whether the buyer has rejected, accepted, or revoked acceptance. The first task is therefore to identify the governing law and the transaction’s delivery structure before deciding who bears a loss or whether the buyer’s response was effective.
For goods, Article 2 asks whether the seller made a conforming tender at the contractually required time, place, and manner. A tender may fail because the goods are defective, the quantity is wrong, required documents are missing, or the seller used the wrong delivery method. A shipment term generally makes delivery to a carrier the seller’s delivery event; a destination term requires tender at the destination. Words such as “FOB seller’s plant,” “FOB buyer’s warehouse,” “deliver to,” “freight prepaid,” and “carrier destroyed the goods” are recognition triggers.
Tender also includes the required transportation arrangements and notice when the seller is authorized to ship. Under the shipment rule, the seller must put conforming goods into the carrier’s possession, make a reasonable transportation contract, provide necessary documents, and promptly notify the buyer. Failure to give the required shipment notice can keep the risk on the seller even though the goods reached the carrier.
For a non-goods contract governed by common law, do not apply Article 2’s perfect-tender rule. Ask whether the performer completed or substantially performed the contractual duty. A minor deviation ordinarily does not justify treating the entire performance as rejected; a serious failure may. Whether a contractual term is a condition is a separate question covered in the sibling chapter on conditions and the duty of good faith.
This topic is not starred: legal resources may be supplied when it is tested, and where they are not, you need only demonstrate recognition that the topic is at issue. You are not required to hold this topic cold because resources may be supplied; the floor you must hold is the vocabulary-tender, shipment term, destination term, title, risk of loss, rejection, cure, acceptance, and revocation-and the order in which those questions are asked.
The Performance Floor: Separate Delivery, Title, and Risk
Title and risk are different allocations. Title concerns ownership; risk of loss concerns who bears an accidental loss such as fire, theft, or destruction. Under Article 2, title passes according to the parties’ agreement and otherwise when the seller completes performance with respect to physical delivery. In a shipment contract, that ordinarily occurs at shipment; in a destination contract, at tender at the destination. But title passage does not automatically answer risk.
If there is no seller breach, risk generally follows the delivery term: in a shipment contract, risk passes when conforming goods are duly delivered to the carrier; in a destination contract, risk passes when conforming goods are duly tendered at the destination. If the seller makes a nonconforming tender that gives the buyer a right to reject, risk remains with the seller until cure or acceptance. If the buyer rightfully revokes acceptance, the buyer may treat the risk as having rested on the seller from revocation to the extent of any insurance deficiency.
The crucial near-miss is destination delivery versus nonconforming tender. Destination tender ordinarily shifts risk at the destination. But if the lamps arrive at the destination with the wrong voltage and the buyer rightfully rejects them, the special breach rule keeps the risk on the seller. The delivery term does not erase the effect of the seller’s nonconformity.
A second near-miss is title versus risk. The buyer may have received title while the seller still bears risk because the tender was nonconforming. Conversely, a buyer may bear risk after a conforming shipment even though the seller retains some contractual interest. Always analyze the title rule and the risk rule separately.
The fastest reading method for a supplied provision is:
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Circle the operative event: “passes,” “remains,” “may reject,” or “may revoke.”
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Identify the status requirement: shipment, destination, nonconforming tender, acceptance, or revocation.
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Mark limiting words such as “unless,” “until,” “only if,” and “substantially.”
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Apply the facts in time order: contract term, delivery event, defect, buyer’s response, and later loss.
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Check whether an exception displaces the ordinary rule.
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The chart shows the ordinary delivery trigger only. If the tender is nonconforming and gives the buyer a right to reject, the breach-based risk rule may override the ordinary risk result.
| Question | Shipment term | Destination term | Nonconforming tender |
|---|---|---|---|
| Seller’s delivery event | Conforming goods placed with carrier | Conforming goods tendered at destination | Ordinary event does not end seller’s risk |
| Default title point | Shipment | Destination tender | May pass separately from risk |
| Risk without breach | Passes on carrier delivery | Passes on destination tender | Not applicable |
| Risk after rightful rejection | Seller until cure or acceptance | Seller until cure or acceptance | Special rule controls |
The Buyer’s Status: Reject Before Acceptance, Revoke After
A buyer who has not accepted goods may reject if the tender fails to conform in any respect to the contract-the Article 2 perfect-tender rule. The buyer may reject the whole shipment, accept a commercial unit and reject the rest, or accept the whole shipment. The rejection must be within a reasonable time and must be seasonably communicated. Silence alone is not a safe rejection.
The major exception is an installment contract. The buyer may reject a nonconforming installment only when the nonconformity substantially impairs the value of that installment and cannot be cured. The buyer may cancel the entire contract only when the nonconformity substantially impairs the value of the whole contract. A single defective installment therefore does not automatically justify rejecting every future installment.
Cure changes the timing analysis. If the contract time has not expired, the seller may notify the buyer of an intention to cure and make a conforming delivery within the contract period. If the seller had reasonable grounds to believe the nonconforming tender would be acceptable, the seller may, after seasonably notifying the buyer, have a further reasonable time to substitute conforming goods even after the deadline. The buyer’s initial rejection does not prevent a legally available cure.
Acceptance occurs when, after a reasonable opportunity to inspect, the buyer signifies that the goods are acceptable, fails to make an effective rejection, or acts inconsistently with the seller’s ownership. Using, reselling, altering, or retaining goods in a way inconsistent with the seller’s ownership can establish acceptance. Acceptance is not the same as merely receiving a shipment or having title pass. After acceptance, the buyer ordinarily cannot reject; the buyer must proceed under revocation if its demanding requirements are met.
Revocation of acceptance is narrower than rejection. The buyer must show a nonconformity that substantially impairs the value of the goods and either that acceptance was reasonably induced by difficulty discovering the defect or by the seller’s assurances that the defect would be cured. The buyer must revoke within a reasonable time after discovering or should have discovered the defect, before a substantial change in the goods not caused by the defect, and by notifying the seller. A buyer who simply regrets the purchase or discovers a minor defect cannot revoke.
| Buyer’s response | When available | Key trigger | Immediate consequence |
|---|---|---|---|
| Rejection | Before acceptance | Any nonconformity, subject to installment limits | Treat goods as not accepted; risk generally remains seller’s |
| Cure | Before or, in limited circumstances, after deadline | Timely conforming substitution under the cure rules | Seller gets the specified opportunity to fix tender |
| Acceptance | After reasonable inspection opportunity | Assent, ineffective rejection, or inconsistent ownership act | Buyer cannot later reject merely for nonconformity |
| Revocation | After acceptance | Substantial impairment plus inducement or difficult discovery and timely notice | Acceptance is undone if all requirements are met |
Thus, the fact that separates rejection from revocation is acceptance. Before acceptance, ask whether the tender conforms and whether cure is available. After acceptance, ask whether substantial impairment, inducement or difficult discovery, timing, notice, and absence of an unauthorized substantial change support revocation.
One Supplied Rule: The Destination Defect That Keeps Risk With the Seller
For this item, read the supplied provision by locating its operative words-“destination,” “rightfully reject,” “remains,” and “until”-then map the delivery term, defect, rejection, and loss onto them.
A destination delivery term requires the seller to tender conforming goods at the destination.
If a tender or delivery is nonconforming in a way that gives the buyer a right to reject, the risk of loss remains on the seller until the seller cures or the buyer accepts.
Unless the parties expressly agree otherwise, title passes when the seller completes performance with respect to physical delivery.
A buyer may reject the whole shipment when the tender fails to conform, subject to the separate rules governing installment contracts.
A contract requires a seller to deliver 100 lamps “FOB buyer’s store.” The seller delivers all 100 lamps to the buyer’s store, but 20 lamps have the wrong voltage. The buyer promptly inspects the shipment, rejects all of it, and notifies the seller. Before the seller can cure or retrieve the lamps, lightning destroys them in the store’s loading area. The seller argues that the destination term shifted the risk when the lamps arrived.
Practice
Who bears the risk of loss for the destroyed lamps?
Three Decision Points: Delivery, Cure, and Revocation
Practice
A contract requires a seller to deliver conforming pottery to the buyer’s warehouse. The seller gives the conforming pottery to a carrier, but the carrier’s truck is destroyed before reaching the warehouse. Who bears the loss?
A seller’s contract requires delivery of 50 chairs by June 30. On June 20, the seller tenders five chairs with the wrong fabric, and the buyer seasonably rejects the shipment. The seller immediately gives notice that conforming chairs will be delivered by June 30. What is the seller’s best position?
A buyer accepts a machine after the seller repeatedly assures the buyer that an unusual vibration will disappear. The buyer later discovers that the vibration substantially impairs the machine’s value, promptly notifies the seller, and has not materially changed the machine. Which remedy is most directly available?
High-Yield Points - ⚡ Biggest Takeaways
Separate title from risk; a nonconforming tender can leave risk with the seller after title passes. Apply the delivery term first, then test whether breach-specific risk rules displace the ordinary result. Rejection precedes acceptance; revocation is the narrower post-acceptance remedy. Before the contract deadline, a seller may often cure a nonconforming tender.
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