Sales and Leases - A Problem-based Approach, 2016a

the buyer, noting that the defect could only be discovered during the processing, the seller
was aware that the processing was required to make the hides usable, and the processing
enhanced rather than impaired the value of the hides.
13.4. Return of Goods after Revocation. After acceptance has been revoked, must the buyer
return the goods to the seller? UCC § 2-608(3) states that a buyer who rightfully revokes
acceptance “has the same rights and duties with regard to the goods involved as if he had rejected
them.” Those rules are found at UCC §§ 2-602(2) - (3), 2-603, 2-604, and 2-605. Turn back to
§ 12.7 for a review of these obligations.
13.4.1. Under UCC § 2-711(3), where a buyer has rightfully rejected goods or revoked
acceptance, the buyer has a security interest in any goods in her possession, to the extent
the buyer has paid all or a portion of the purchase price, and to the extent the buyer
incurred costs in their inspection, receipt, transportation, or care. The buyer may re-sell
the goods to satisfy this security interest.
13.4.2. In J.F. Daley Int'l, Ltd. v. Midwest Container & Indus. Supply Co., 849 S.W.2d
260 (Mo. App. 1993), the buyer revoked acceptance of thousands of plastic bottles which
it purchased from seller, after it was discovered that the bottles leaked. The buyer failed
to return the bottles to the seller. In upholding the appropriateness of the buyer’s conduct,
the court noted:
In this case, however, there was no evidence of any instructions by [seller] other
than to ship the bottles back to [seller] at [buyer’s] expense. As [buyer] points out,
§ 400.2-603(1) further provides that a seller's instructions are not reasonable if, on
demand, indemnity for expenses is not forthcoming. [Seller] repeatedly declined
to pay for return shipment of the bottles. Thus, [buyer] had no obligation to abide
by [seller’s] instructions. Further, according to [seller’s employee], [seller] would
have ground the bottles up for remanufacture. Thus, the evidence supports the
inference that the remaining bottles were of little or no value to anyone else,
thereby excusing any effort by [buyer] to sell them on the open market.
Id. at 265.
13.5. Effect of Breach on Risk of Loss. The normal risk of loss rules set forth at § 2-509
(discussed in Chapter 10) are displaced by § 2-510, if there is a breach giving rise to the right to
reject, or if there is a rightful revocation of acceptance.
13.5.1. Under § 2-510, if a tender or delivery of goods fails to conform to the contract and
gives rise to a right of rejection under the perfect tender rule (§ 2-601), the risk of loss
remains on the seller until cure or acceptance.
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