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Contracts • Contract Formation
K#039
Legal Definition
If a seller ships non-conforming goods, it acts as both an acceptance and breach, unless the goods were shipped as an accommodation, in which case it constitutes a counteroffer without breach.
Plain English Explanation
When a seller ships non-conforming goods (goods that don’t match the terms of the contract), two things happen: the seller is both accepting the contract and breaching it at the same time. It’s a bit like saying, "Sure, I’ll do it!" but then immediately messing it up. The buyer can hold the seller accountable for sending the wrong stuff.
However, if the seller sends the non-conforming goods but adds a note like, "Hey, I’m out of the right stuff, but here’s this instead," the seller isn’t automatically off the hook. In legal terms, this is called an accommodation. Instead of being considered a breach, the seller is making a counteroffer. The buyer can either accept the substitute goods or reject them and insist on the original order.
Why does this matter? Because it gives sellers some flexibility when things go wrong, but it also protects buyers by letting them hold the seller responsible if they don’t agree to the substitute. It’s a balancing act between cutting the seller some slack in certain situations while ensuring the buyer still has control over what they receive.
However, if the seller sends the non-conforming goods but adds a note like, "Hey, I’m out of the right stuff, but here’s this instead," the seller isn’t automatically off the hook. In legal terms, this is called an accommodation. Instead of being considered a breach, the seller is making a counteroffer. The buyer can either accept the substitute goods or reject them and insist on the original order.
Why does this matter? Because it gives sellers some flexibility when things go wrong, but it also protects buyers by letting them hold the seller responsible if they don’t agree to the substitute. It’s a balancing act between cutting the seller some slack in certain situations while ensuring the buyer still has control over what they receive.
Hypothetical
Hypo 1: Bob sells widgets. Sam sends Bob an order for 1000 blue widgets that Sam needs for an important upcoming conference. Bob accidentally sends Sam 1000 red widgets. Result: Bob has sent Sam non-conforming goods, which means Bob has both accepted Sam's offer to purchase 1000 blue widgets and at the same time breached the agreement by sending the wrong item. As such, Sam would be entitled to various remedies for Bob's breach (covered in other cards).
Hypo 2: Bob sells widgets. Sam sends Bob an order for 1000 blue widgets that Sam needs for an important upcoming conference. Bob doesn't have 1000 blue widgets, but he does have 1000 red widgets. The deadline requested by Sam doesn't really give Bob time to contact Sam and discuss whether or not the color matters much, so Bob tries to be proactive and do a nice deed by sending 1000 red widgets because he figures it is better than Sam having no widgets. Result: This is an accommodation. Bob had every right to not respond to Sam at all, but the attempt to accommodate Sam's needs is considered a counteroffer, which Sam is free to treat as an offer (accept, reject, etc.).
Note: You're probably noticing that it can be difficult to determine the difference between these two hypos -- and you're right, which is why you'll often have to argue both sides using the facts provided in the exam.
Hypo 2: Bob sells widgets. Sam sends Bob an order for 1000 blue widgets that Sam needs for an important upcoming conference. Bob doesn't have 1000 blue widgets, but he does have 1000 red widgets. The deadline requested by Sam doesn't really give Bob time to contact Sam and discuss whether or not the color matters much, so Bob tries to be proactive and do a nice deed by sending 1000 red widgets because he figures it is better than Sam having no widgets. Result: This is an accommodation. Bob had every right to not respond to Sam at all, but the attempt to accommodate Sam's needs is considered a counteroffer, which Sam is free to treat as an offer (accept, reject, etc.).
Note: You're probably noticing that it can be difficult to determine the difference between these two hypos -- and you're right, which is why you'll often have to argue both sides using the facts provided in the exam.
Visual Aids
Related Concepts
Are offers assignable?
Are pre-existing duties valid consideration?
Can partial payment of a debt be consideration for release of that debt?
How can an offeree reject an offer?
How do courts assess the adequacy of consideration?
How may an offer be revoked?
Though offers can generally be freely revoked, what are the 4 exceptions?
Under battle of the forms, what happens to additional or different terms in an acceptance when at least one of the parties is a non-merchant?
Under battle of the forms, what happens to additional terms in an acceptance between two merchants?
Under battle of the forms, what happens to different terms in an acceptance between two merchants?
What are consideration substitutes?
What are illusory promises and how do they affect a contract?
What are requirement and output contracts?
What are the methods of terminating an offer?
What are the requirements of an offer?
What are the UCC Gap Fillers?
What is acceptance?
What is a contract?
What is a merchant's firm offer?
What is an option contract?
What is consideration?
What is detrimental reliance?
What is promissory estoppel?
What is required to form a valid, binding contract?
What is the effect of a conditional acceptance on an offer?
What is the effect of a contract that contains vague or ambiguous terms?
What is the effect of a contract that is missing price terms?
What is the effect of a contract that is missing quantity terms?
What is the effect of a counteroffer on an offer?
What is the effect of a lapse of time on an offer?
What is the effect of an offeree beginning to perform in response to an offer?
What is the effect of including additional or different terms to an offer?
What is the effect of part performance of a unilateral contract?
What is the effect of the death of a party prior to acceptance of an offer?
What is the Mailbox Rule and when does it apply?
When are advertisements valid offers?
When are price quotes valid offers?
When is past or moral consideration valid?
Who controls the method of acceptance, and what are the typical ways that an offer is accepted?
