Tender of Delivery refers to the seller’s action of placing goods at the buyer’s disposal according to the agreed-upon terms and conditions of the sales contract. This process involves the readiness and availability of the goods for the buyer to take possession.
Legal Framework
Tender of Delivery is governed by the Uniform Commercial Code (UCC) in the United States and various international conventions in other jurisdictions. According to UCC §2-503:
- The seller must put and hold conforming goods at the buyer’s disposal.
- The seller must give the buyer any notification reasonably necessary for the buyer to take delivery.
- In the absence of explicit agreement, the place of delivery is the seller’s place of business.
Elements of Tender of Delivery
Conforming Goods
The goods must match the specifications laid out in the contract. Non-conforming goods can lead to rejection by the buyer and potentially a breach of contract.
Notification
The buyer must be notified adequately to take possession. This includes aspects like time and place of availability.
Legal Compliance
Certain legal frameworks govern the process. For instance, international sales might follow guidelines set by the United Nations Convention on Contracts for the International Sale of Goods (CISG).
Breach of Contract
Seller’s Failure to Tender Delivery
A seller who fails to tender delivery as agreed is in breach of contract. This can result in multiple remedies for the buyer:
- Specific Performance: The buyer may demand the performance of the contract.
- Damages: The buyer may claim for any losses incurred due to the breach.
Buyer’s Refusal to Take Delivery
Conversely, if the buyer refuses to take delivery without lawful excuse, the buyer may be in breach of contract. Consequences for such action may include:
- Damages: Compensation payable to the seller for losses incurred.
- Cancellation: The seller may cancel the contract and seek remedies.
Examples
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Timely Delivery: A seller delivers 100 conforming widgets to the buyer’s warehouse as per the contract. The seller gives 24-hour notice to the buyer, who then takes delivery.
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Non-Conforming Delivery: A seller delivers 100 widgets, but 20 of them do not meet contractual specifications. The buyer has the right to reject the non-conforming goods.
Historical Context
The concept of tender of delivery has evolved from common trade practices and has been codified into modern commercial laws to standardize and protect both parties involved in a sales contract.
Applicability
Tender of delivery is crucial in various sectors such as:
- Retail and Wholesale: Ensuring timely delivery of goods as per contract.
- Manufacturing: Adherence to specifications and delivery schedules.
Comparison with Related Terms
Tender of Performance
While tender of delivery focuses on goods, tender of performance can refer to services or non-tangible deliverables.
Delivery vs. Shipment
Delivery implies the transfer of possession and control, whereas shipment refers to the transportation process.
Freight on Board (FOB)
An incoterm where the seller is responsible for goods until they are loaded onto a shipping vessel.
FAQ
What happens if the seller fails to notify the buyer of delivery?
Failure to notify can lead to breaches of contract, allowing the buyer to seek remedies.
Can the buyer reject goods after taking delivery?
Generally, acceptance nullifies the right of rejection unless hidden defects are found later.
How is tender of delivery managed in international trade?
International trade may follow the CISG or specific terms agreed upon by the parties, such as Incoterms.
What are Incoterms?
International commercial terms published by the International Chamber of Commerce, defining responsibilities in the shipment of goods.
References
- Uniform Commercial Code (UCC) - Article 2, Sales of Goods.
- United Nations Convention on Contracts for the International Sale of Goods (CISG).
- Incoterms 2020 by the International Chamber of Commerce.
Summary
Tender of Delivery is a critical concept in commercial transactions ensuring that goods are placed at the buyer’s disposal per contractual agreements. Failure by either party to adhere to these terms may lead to breaches and subsequent legal remedies. Understanding the nuances of tender of delivery is essential for smooth and lawful commercial operations.
