84-2-503. Manner of seller's tender of delivery. (1) Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable the buyer to take delivery. The manner, time and place for tender are determined by the agreement and this article, and in particular:
(a) Tender must be made at a reasonable hour, and if it is of goods they must be kept available for the period reasonably necessary to enable the buyer to take possession; but
(b) unless otherwise agreed the buyer must furnish facilities reasonably suited to the receipt of the goods.
(2) Where the case is within the next section respecting shipment tender requires that the seller comply with its provisions.
(3) Where the seller is required to deliver at a particular destination tender requires that he comply with subsection (1) and also in any appropriate case tender documents as described in subsections (4) and (5) of this section.
(4) Where goods are in the possession of a bailee and are to be delivered without being moved:
(a) Tender requires that the seller either tender a negotiable document of title covering such goods or procure acknowledgment by the bailee of the buyer's right to possession of the goods; but
(b) tender to the buyer of a nonnegotiable document of title or of a record directing the bailee to deliver is sufficient tender unless the buyer seasonably objects, and except as otherwise provided in article 9 of chapter 84 of the Kansas Statutes Annotated, and amendments thereto, receipt by the bailee of notification of the buyer's rights fixes those rights as against the bailee and all third persons; but risk of loss of the goods and of any failure by the bailee to honor the nonnegotiable document of title or to obey the direction remains on the seller until the buyer has had a reasonable time to present the document or direction, and a refusal by the bailee to honor the document or to obey the direction defeats the tender.
(5) Where the contract requires the seller to deliver documents:
(a) The seller must tender all such documents in correct form, except as provided in this article with respect to bills of lading in a set (subsection (2) of K.S.A. 84-2-323, and amendments thereto); and
(b) tender through customary banking channels is sufficient and dishonor of a draft accompanying or associated with the documents constitutes nonacceptance or rejection.
History: L. 1965, ch. 564, § 68; L. 2007, ch. 90, § 53; July 1, 2008.
KANSAS COMMENT, 1996
1. This section spells out a seller's duty to tender delivery. Tender by a seller is important for two reasons. First, tender of the goods is a condition to the buyer's duty to accept and pay. See 84-2-507. Second, tender either causes the risk of loss to pass to the buyer or is an essential step before risk of loss will pass. See 84-2-509.
2. Subsection (1) states the primary requirements of a valid tender in an ordinary case: that the seller put and hold conforming goods for the buyer and give reasonable notice. In Wendling v. Puls, 227 K. 780, 610 P.2d 580 (1980), the court upheld a tender date fixed by the seller in good faith and in a commercially reasonable manner. In turn, the buyer must furnish reasonable facilities to receive the tendered goods. See Bartlett & Co., Grain v. Curry, 1 K.A.2d 242, 563 P.2d 1096 (1977).
3. Subsection (2) deals with "shipment" contracts—contracts in which the seller does not undertake to deliver the goods to a particular destination—and makes clear that the requirements of 84-2-504 must be met for the seller to fulfill its tender obligations. Subsection (3) addresses "destination" contracts — contracts in which the seller is obligated to deliver the goods to a particular destination. For destination contracts, tender requires that the mandates of subsection (1) be met and that any necessary documents be tendered. The provisions of 84-2-504 do not apply to destination contracts. Official Comment 5 indicates that a shipment contract is the normal type and that the parties must specifically agree to create a destination contract. Therefore, if the contract is silent it normally is a shipment contract. However, in Halstead Hosp., Inc. v. Northern Bank Note Co., 680 F.2d 1307 (10 th Cir. 1982) (applying Kansas law), the Tenth Circuit looked to the circumstances of the transaction and held that the parties intended to create a destination contract even though the contract itself was silent.
4. Subsection (4) deals with the seller's tender obligations when a bailee such as a warehouseman has possession of the goods and they are being delivered to the buyer without being moved. Under this subsection, if the goods are covered by a negotiable document of title the seller must tender the document. If the goods are not covered by a negotiable document of title, tender of a non-negotiable document of title or a written delivery order is sufficient unless the buyer objects. In such a case the seller also can meet its tender obligation by procuring from the bailee an acknowledgment (sometimes called an "attornment") that the goods are now held for the buyer.
5. Subsection (5) sets out the seller's tender obligations in documentary transactions or transactions in which the buyer is to pay against delivery of documents.
Law Review and Bar Journal References:
"Housing Defects: Homeowner's Remedies—A Time for Legislative Action," William J. Fields, 21 W.L.J. 72, 84 (1981).
CASE ANNOTATIONS
1. Subparagraph (b) of this section applied; plaintiff not in compliance. Bartlett & Co., Grain v. Curry, 1 Kan. App. 2d 242, 248, 563 P.2d 1096.
2. Tender of delivery discussed and applied. Wendling v. Puls, 227 Kan. 780, 785, 610 P.2d 580.
3. Title to goods under K.S.A. 84-2-105, 84-2-401 cannot pass under a contract for sale prior to their identification to the contract. Reeves v. Pillsbury Co., 229 Kan. 423, 430, 625 P.2d 440.
|
|