M Civ JI 140.13 Contract Action - UCC: Buyer’s Rejection of Goods - Installment Contract

The buyer rejected some of the goods. The [ buyer / seller ] claims that the contract is an installment contract. An installment contract is one that requires or authorizes the seller to deliver goods in separate installments and the buyer to accept each installment separately. *(A contract can be an installment contract even if it contains the clause [ “each delivery is a separate contract” / [ other equivalent clause ] ].) You must determine whether this contract is an installment contract.

If it is an installment contract, the buyer must accept an installment if:

(a) the goods in that installment and the manner, time, and place of their [ delivery / tender ] conform to the contract. (Tender means that the seller has put and holds goods at the buyer’s disposal and has given the buyer any notification reasonably necessary to enable [ him / her / it ] to take delivery.)

or

(b) the goods in that installment or the manner, time, or place of their [ delivery / tender ] do not conform to the contract, but the nonconformity does not substantially impair the value of that installment.

or

(c) the goods in that installment or the manner, time, or place of their [ delivery / tender ] do not conform to the contract, but the nonconformity does not substantially impair the value of the whole contract and the seller gives adequate assurance of its cure.

†The buyer is entitled to reject an installment if the goods in that installment, or the manner, time, or place of their [ delivery / tender ] do not conform to the contract, and the nonconformity substantially impairs the value of that installment and cannot be cured, and the buyer notified the seller of the nonconformity within a reasonable time after the [ delivery / tender ]. The buyer has the burden of proving that [ he / she / it ] gave the seller the required notification.

If you determine that the buyer was entitled to reject an installment(s), then the seller has breached the contract.

You must then determine whether the breach is a breach of [ an installment / one or more of the installments ] or a breach of the whole contract. If the nonconformity of [ an installment / one or more of the installments ] substantially impaired the value of the whole contract, then there is a breach of the whole contract.

If you determine that the buyer was not entitled to reject [ an installment / one or more of the installments ], then the buyer has breached the contract.

Note on Use

*Use the sentence in parentheses if applicable to the case.

†If the contract defines substantial impairment, or the contract or surrounding circumstances imply specific requirements as to quality, time, quantity, assortment, or the like, then these portions of the instruction may have to be modified. See UCC Official Comment Number 4 at MCL 440.2612.

If there are issues concerning reinstatement of the contract, this instruction may require modification. See MCL 440.2612(3).

Comment

MCL 440.2612. See also MCL 440.2602.

History

M Civ JI 140.13 was added January 1987.