VuPlay Company contracts to deliver one hundred 60-inch 3D HD television sets to a new retail customer, Watchbox Store, on May 1, with payment to be made on delivery. VuPlay tenders delivery in its own truck. Watchbox's manager notices that some of the
cartons have scrape marks. Watchbox's owner phones VuPlay's office and asks whether the sets might have been damaged as they were being loaded. VuPlay assures Watchbox that the sets are in perfect condition. Watchbox tenders VuPlay a check, which VuPlay refuses, claiming that the first delivery to new customers is always for cash. Watchbox promises to pay the cash within two days. VuPlay leaves the sets with Watchbox, which stores them in its warehouse pending its "Grand Opening Sale" on May 15 . Two days later, Watchbox's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. VuPlay claims Watchbox has accepted the sets and is in breach by not paying on delivery. Will VuPlay succeed on these claims? Explain.
VuPlay will lose on both claims.
Acceptance of the goods by a buyer takes place when the buyer either signifies that the goods are conforming after inspection or fails to reject af-ter a reasonable time for inspection or acts inconsistently with the seller's ownership. Once the goods are accepted, the buyer loses the right to revoke acceptance of noncon-forming goods unless acceptance was based on a reasonable assurance that the goods were conforming.
In this question, although Watchbox accepted the goods, it did so on VuPlay's assurance that the sets were in perfect condition. Thus, on discovery of the damaged sets, Watchbox can revoke acceptance on the basis of substantial im-pairment of value.
In addition, although the contract called for payment on delivery, no method of payment was specified. Therefore, tender of payment is sufficient if it is by any means currently used in the ordinary course of business—a check is such a means. VuPlay does have a right to demand cash but must give Watchbox a reasonable extension of time in which to procure the cash. Thus, VuPlay's claim of Watchbox's breach for non-payment on delivery is not valid.
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