Printable Format84-2-607. Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim or litigation to person answerable over. (1) The buyer must pay at the contract rate for any goods accepted.
(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of nonconformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this article for nonconformity.
(3) Where a tender has been accepted
(a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and
(b) if the claim is one for infringement or the like (subsection (3) of section 84-2-312) and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.
(4) The burden is on the buyer to establish any breach with respect to the goods accepted.
(5) Where the buyer is sued for breach of a warranty or other obligation for which his seller is answerable over
(a) he may give his seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so he will be bound in any action against him by his buyer by any determination of fact common to the two litigations, then unless the seller after seasonable receipt of the notice does come in and defend he is so bound.
(b) if the claim is one for infringement or the like (subsection (3) of section 84-2-312) the original seller may demand in writing that his buyer turn over to him control of the litigation including settlement or else be barred from any remedy over and if he also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt of the demand does turn over control the buyer is so barred.
(6) The provisions of subsections (3), (4) and (5) apply to any obligation of a buyer to hold the seller harmless against infringement or the like (subsection (3) of section 84-2-312).
History: L. 1965, ch. 564, § 87; January 1, 1966.
KANSAS COMMENT, 1996
1. This section states the effect of acceptance of the goods under section 84-2-606. Under subsection (1), the buyer becomes liable to the seller for the contract price of goods accepted. See also 84-2-709. Under subsection (2), acceptance precludes rejection. Under the circumstances described in section 84-2-608, however, the buyer may be able to revoke acceptance of the goods. Acceptance does not, of itself, deprive the buyer of any other remedies, including a claim for damages. See 84-2-714.
2. Subsection (3) provides that a buyer that has accepted the goods must give notice of breach to the seller within a reasonable time or "be barred from any remedy." The policies underlying the notice requirement are to give the seller a chance to correct the nonconformity, to enable the seller to prepare for negotiations and litigation, and to safeguard the seller against stale claims. Carson v. Chevron Chem. Co., 6 K.A.2d 776, 635 P.2d 1248 (1981). The courts construe the notice requirement in light of these underlying policies. Thus, the courts do not apply the notice requirement as strictly in cases involving consumers as in commercial cases, Smith v. Stewart, 233 K. 904, 667 P.2d 358 (1983), particularly when the lack of notice did not prevent cure of nonconformity or otherwise prejudice the defendant (such as in preparing for litigation). See City of Wichita v. United States Gypsum Co., 828 F. Supp. 851, 857-58 (D. Kan 1993), aff'd in part and rev'd in part on other grounds, 72 F.3d 1491 (10th Cir. 1996).
3. The time for giving notice begins to run when the buyer discovered or should have discovered the defect, whichever is earlier. The timeliness of the notice is a question of fact. The cases suggest that the "reasonable time" for giving notice is shorter for a commercial entity rather than for a consumer, see 1996 Kansas Comment 2 to this section, and that if the goods are perishable the time for giving notice may be very short indeed. Notice is less likely to be found timely if given by the filing of the lawsuit or counterclaim. Official Comment 4 to this section indicates that a lenient standard is to be applied in determining whether the content of the notice is sufficient. The notice may be oral or written. See Dowling v. Southwestern Porcelain, Inc., 237 K. 536, 701 P.2d 954 (1985).
4. By its terms, section 84-2-607 requires "the buyer" give notice to "the seller." Courts ordinarily hold that the "seller" referred to is the immediate seller, not a remote seller. The Kansas Court of Appeals in Carson v. Chevron Chemical Co., 6 K.A.2d 776, 635 P.2d 1248 (1981), indicated that when the buyer and an upstream manufacturer "are closely related," or when a party upstream from the retail seller "actively participate(s) in the consummation of the actual sale of the product," the buyer must give notice to that party as well. Id. at 785 (buyer was consultant for manufacturer). The court stated in dicta that in the "ordinary buyer-seller relationship," the buyer need not give notice of breach to an upstream party. Although Official Comment 5 states that a third party beneficiary of a warranty is required to notify the seller of any breach, most courts reject that position as contrary to the language of the statute. See Hansen v. F.M.C. Corp., 32 U.C.C. Rep. Serv. 828 (D. Kan. 1981).
5. The remedies barred by failure to give notice include any claim for damages for breach of warranty (see 84-2-714(1)) as well as the right to revoke acceptance (see 84-2-608). This subsection of course does not apply when the plaintiff's cause of action is in strict liability in tort. In Dold v. Sherow, 220 K. 350, 552 P.2d 945 (1976), the court stated that notice was a condition precedent to suit, suggesting that failure to plead notice subjects a buyer's suit to dismissal for failure to state a claim. In that case, however, the failure to plead notice was waived by defendant's failure to raise the issue at the pretrial conference. Moreover, if in fact notice was given, a court is likely to permit the buyer to amend its complaint to so plead. Dowling v. Southwestern Porcelain, Inc., supra.
6. Under subsection (4), acceptance shifts the burden of proof to the buyer to show breach. Subsections (3)(b), (5), and (6) define the parties' respective rights and duties in third-party practice in breach of warranty litigation. See, e.g., Black v. Don Schmid Motor, Inc., 232 K. 458, 657 P.2d 517 (1983) (comparing "vouching in" under 84-2-607(5)(a) with right to indemnity); Alvarado v. J.C. Penney Co., 768 F. Supp. 769 (D. Kan. 1991) (party receiving "vouching in" letter may intervene in action), aff'd, 997 F.2d 803 (10th Cir. 1993).
Law Review and Bar Journal References:
"Caveat Venditor—Strict Products Liability Under the Uniform Commercial Code," Norman E. Beal, 16 K.L.R. 285, 288, 295 (1968).
A buyer can preserve his right to damages for nonconformity of the goods by timely notice after discovery of such, Keith Hey, 7 W.L.J. 35, 37 (1967).
Buyer's nonstatutory, "good faith" duty to notify the seller that an injury has occurred, John B. Roesler, 19 K.L.R. 251, 254 (1971).
"Beefing Up Product Warranties: A New Dimension In Consumer Protection," Barkley Clark, Michael J. Davis, 23 K.L.R. 567, 574, 605, 606 (1975).
Strict liability in tort as adopted in Kansas, 25 K.L.R. 462, 471, 476 (1977).
"Survey of Kansas Law: Torts," William Edward Westerbeke, 27 K.L.R. 321, 351, 355 (1979).
"Comparative Fault and Strict Products Liability in Kansas: Reflections on the Distinction Between Initial Liability and Ultimate Loss Allocation," William Edward Westerbeke and Hal D. Meltzer, 28 K.L.R. 25, 97 (1979).
"The Buyer's Right to Return Unsatisfactory Goods—The Uniform Commercial Code Remedies of Rejection and Revocation of Acceptance," George I. Wallach, 20 W.L.J. 20, 31 (1980).
"Deregulation and Natural Gas Purchase Contracts: Examination Through Neoclassical and Relational Contract Theories," Danton B. Rice, Michael A. Schlueter, 25 W.L.J. 43, 59 (1985).
"Privity of Contract and Economic Losses: 'Watchman, What of the Night?'" Alan T. Blinzler and Stephen M. Fitzgerald, 11 J.K.T.L.A. No. 1, 13 (1987).
"Anticipating Common Issues in Revocation of Acceptance Cases," Ronald L. Shalz, 12 J.K.T.L.A. No. 1, p. 21 (1988).
CASE ANNOTATIONS
1. Mentioned; measure of damages for breach of warranty of automobile title determined. Ricklefs v. Clemens, 215 Kan. 128, 132, 531 P.2d 94.
2. Failure to plead and prove notice requirements hereunder waived by failure to raise issue at pretrial conference. Dold v. Sherow, 220 Kan. 350, 351, 352, 353, 552 P.2d 945.
3. Buyer accepted goods; defendant not authorized to cure or substitute for nonconforming defects; remedies of buyer. Linscott v. Smith, 3 Kan. App. 2d 1, 4, 587 P.2d 1271.
4. The selling of feeder pigs was under the UCC, but plaintiff failed to produce sufficient evidence to support his claim. Musil v. Hendrich, 6 Kan. App. 2d 196, 202, 627 P.2d 367.
5. Notice only to immediate seller of alleged breach of warranty only applicable in ordinary buyer-seller relationship. Carson v. Chevron Chemical Co., 6 Kan. App. 2d, 776, 778, 783, 785, 786, 635 P.2d 1248 (1981).
6. Plaintiff met requirements for proper revocation of acceptance. Newmaster v. Southeast Equipment, Inc., 231 Kan. 466, 470, 471, 646 P.2d 488 (1982).
7. Seller's right to indemnity against manufacturer not available when damages to purchaser results from seller's failure to repair the goods. Black v. Don Schmid Motor, Inc., 232 Kan. 458, 471, 472, 473, 657 P.2d 517 (1983).
8. Summary judgment under (3)(a) not proper where material fact exists as to agency for receiving notice of defects. Owens-Corning Fiberglas v. Sonic Dev. Corp., 546 F. Supp. 533, 537 (1982).
9. Where notice of other defects given but none under express warranty, purpose of subsection (3)(a) would be defeated by blind adherence to condition precedent concept. Smith v. Stewart, 233 Kan. 904, 910, 914, 667 P.2d 358 (1983).
10. Cited; implied warranties not extended to remote seller or manufacturer of product not inherently dangerous for economic loss without privity. Professional Lens Plan, Inc. v. Polaris Leasing Corp., 234 Kan. 742, 754, 755, 675 P.2d 887 (1984).
11. Requirement of notice designed to defeat commercial bad faith, not deprive good faith consumer of remedy; notice may be oral. Dowling v. Southwestern Porcelain, Inc., 237 Kan. 536, 544, 701 P.2d 954 (1985).
12. Notice requirement in (3)(a) is clearcut; contention of constructive notice by failure to pay without merit. Fleet Maintenance, Inc. v. Burke Energy Midwest Corp. 11 Kan. App. 2d 523, 525, 728 P.2d 408 (1986).
13. Cited; sufficiency of notice to advise of breach of warranty examined. Agristor Leasing v. Meuli, 634 F. Supp. 1208, 1220 (1986).
14. Plaintiffs gave vaccine manufacturer adequate warning of breach of warranty by filing suit. Graham v. Wyeth Laboratories, 666 F. Supp. 1483, 1500 (1987).
15. Notice of revocation typically given after general notice of breach. Hemmert Agr. Aviation v. Mid-Continent Aircraft, 663 F. Supp. 1546, 1551 (1987).
16. Failure of company to provide either quantity or quality of goods called for entitled buyer to suspend performance. LNS Inv. Co., Inc. v. Phillips 66 Co., 731 F. Supp. 1484 (1990).
17. Manufacturer of trash can liners, by accepting off-grade resins without notifying producer of breach of oral agreement, barred from claims. Rajala v. Allied Corp., 919 F.2d 610 (1990).
18. Motion to intervene following vouching-in letter proper. Alvarado v. J.C. Penney Co., Inc., 768 F. Supp. 769, 773 (1991).
19. Whether notice of breach sent within reasonable time after discovery a question of fact for jury. Unified School Dist. No. 500 v. U.S. Gypsum Co., 788 F. Supp. 1173, 1176 (1992).
20. Whether city's failure to give presuit notice to asbestos manufacturer barred implied warranty claim examined. City of Wichita, Kan. v. U.S. Gypsum Co., 828 F. Supp. 851, 856 (1993).
21. Defendant failed to preserve its notice defense in pretrial order; defense waived. Lohmann & Rauscher, Inc. v. YKK (USA) Inc., 477 F. Supp. 2d 1147, 1152 (2007).
22. Whether buyer notifies seller of breach of warranty within reasonable time determined from all facts and circumstances. GFSI, Inc. v. J-Loong Trading, Ltd., 505 F. Supp. 2d 935, 939 (2007).
23. A buyer must notify the seller within a reasonable time if the buyer discovered a breach of contract. Golden v. Den-Mat Corporation, 47 Kan. App. 2d 450, 276 P.3d 773 (2012).