Printable Format84-2-603. Merchant buyer's duties as to rightfully rejected goods. (1) Subject to any security interest in the buyer (subsection (3) of section 84-2-711), when the seller has no agent or place of business at the market of rejection a merchant buyer is under a duty after rejection of goods in his possession or control to follow any reasonable instructions received from the seller with respect to the goods and in the absence of such instructions to make reasonable efforts to sell them for the seller's account if they are perishable or threaten to decline in value speedily. Instructions are not reasonable if on demand indemnity for expenses is not forthcoming.
(2) When the buyer sells goods under subsection (1), he is entitled to reimbursement from the seller or out of the proceeds for reasonable expenses of caring for and selling them, and if the expenses include no selling commission then to such commission as is usual in the trade or if there is none to a reasonable sum not exceeding ten percent on the gross proceeds.
(3) In complying with this section the buyer is held only to good faith and good faith conduct hereunder is neither acceptance nor conversion nor the basis of an action for damages.
History: L. 1965, ch. 564, § 83; January 1, 1966.
KANSAS COMMENT, 1996
1. This section imposes on merchant buyers the duty to follow any reasonable instructions from the seller concerning the goods. The buyer need not follow unreasonable instructions, and instructions are unreasonable as a matter of law if the seller does not provide indemnity to the buyer for any expenses incurred. If the seller gives no instructions, and if the goods are perishable or their value otherwise is threatened by the delay, the merchant buyer must make reasonable efforts to sell the goods for the seller's account. These additional duties do not apply if the seller has an agent or a place of business in the market where the rejection occurred.
2. Subsection (2) entitles a merchant buyer that sells goods for the seller's account to reimbursement for its expenses from the sales proceeds. The buyer may not, however, retain amounts as compensation for its damages. Johnson v. General Motors Corp., 233 K. 1044, 668 P.2d 139 (1983) (dicta). Note that section 84-2-711(3) provides buyers that do not sell the goods with a security interest in the goods for storage and similar expenses, but not damages. Subsection (3) protects the buyer against claims for damages by the seller or having its actions treated as acceptance of the goods, requiring only that the buyer act in good faith.
Law Review and Bar Journal References:
A merchant buyer has some duties that are not required of non-trade purchasers, Keith Hey, 7 W.L.J. 35, 36 (1967).
"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, 28, 30 (1980).
CASE ANNOTATIONS
1. Cited; measure of damages discussed for buyer's use of vehicle after revocation of acceptance. Johnson v. General Motors Corp., 233 Kan. 1044, 1048, 668 P.2d 139 (1983).