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84-2-608. Revocation of acceptance in whole or in part. (1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it

(a) on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or

(b) without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances.

(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.

(3) A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them.

History: L. 1965, ch. 564, § 88; January 1, 1966.

KANSAS COMMENT, 1996

1. This section substitutes "revocation of acceptance" for the pre-Code concept of "rescission." The Code does not use the term "rescission" because it may apply either to transfer of title to the goods or to the contract of sale, and so is ambiguous. In addition, the Code does not require election between revocation of acceptance and a damage remedy; "rescission" often did. Subsection (3) of this section and Official Comment 1 make clear that both remedies are available to the buyer. See also 84-2-711 (authorizing damages for buyer that has revoked acceptance). Indeed, under subsection (3) a buyer that revokes acceptance has the same rights and duties toward the goods as if it had rejected them. A seller, however, has no right to cure following revocation of acceptance. See 1996 Kansas Comment 5 to 84-2-508. The Kansas Court of Appeals has held that the common law remedy of rescission continues to be available in cases under Article 2. See Perry v. Goff Motors, Inc., 12 K.A.2d 139, 736 P.2d 949 (1987).

2. Subsection (1) defines when a buyer may revoke its acceptance of the goods. A buyer may revoke acceptance when (1) there is a nonconformity that "substantially impairs" the value of the goods to the buyer; and (2) the buyer accepted the goods either (a) without discovery of the defect if acceptance was reasonably induced either by the seller's assurances or the difficulty of discovery, or (b) with discovery of the defect on the reasonable assumption that the seller would cure. See Newmaster v. Southeast Equip., Inc., 231 K. 466, 646 P.2d 488 (1982). In McGilbray v. Scholfield Winnebago, Inc., 221 K. 605, 561 P.2d 832 (1977), the Kansas Supreme Court adopted a subjective-objective test for determining when the substantial impairment requirement is met. A buyer must show the nonconformity of the goods, the needs and circumstances of the buyer (subjectively), and that the nonconformity in fact (objectively) impaired the value of the goods to the buyer. See also Newmaster v. Southeast Equip., Inc., supra; Black v. Don Schmid Motor, Inc., 232 K. 458, 657 P.2d 517 (1983). The loss of confidence by the buyer may be relevant to determining whether the value of the goods was substantially impaired. See Hemmert Agric. Aviation, Inc. v. Mid- Continent Aircraft Corp., 663 F. Supp. 1546 (D. Kan. 1987).

3. Subsection (2) states the procedural requirements for an effective revocation of acceptance. The buyer must revoke within a reasonable time after it discovered or should have discovered the nonconformity and before any substantial change in the condition of the goods not caused by the defect. Sometimes revocation will be timely even if it occurs long after the sale, if, for example, the delay is due to the seller's attempts to repair the goods. For a discussion of the factors to consider, cf. 1996 Kansas Comment 1 to 84-2-602. Continued use of the goods might defeat an attempted revocation. At a minimum, a seller is entitled to compensation for the fair value of the buyer's use of the goods after revocation. Johnson v. General Motors Corp., 233 K. 1044, 668 P.2d 139 (1983). The buyer also must give notice of revocation to the seller. Official Comment 5 to this section describes what the notice must contain. See also Delhomme Indus., Inc. v. Houston Beechcraft, Inc., 735 F.2d 177 (5th Cir. 1984) (applying Kansas law) (buyer that "resells" goods back to seller has not revoked acceptance).

4. The Kansas "Lemon Law" provides a special revocation remedy for consumer purchasers and lessees of motor vehicles. See K.S.A. 50-645 & 50-646. For a discussion of the legal issues arising under state lemon laws, see Barkley Clark & Christopher Smith, The Law of Product Warranties § 7.03[5] (1984 & Supp. 1996).

Law Review and Bar Journal References:

Ways and instances that a buyer can revoke his acceptance, Keith Hey, 7 W.L.J. 35, 38 (1967).

"Beefing Up Product Warranties: A New Dimension In Consumer Protection," Barkley Clark, Michael J. Davis, 23 K.L.R. 567, 574, 588, 591, 601 (1975).

"Survey of Kansas Law: Contracts," Mary Kathleen Babcock, 27 K.L.R. 215, 217 (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 (1980).

"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. Plaintiff met requirements for proper revocation of acceptance. Newmaster v. Southeast Equipment, Inc., 231 Kan. 466, 467, 468, 470, 471, 646 P.2d 488 (1982).

2. Failure to repair, established nonconformity under the contract which substantially impaired the value to the buyer; entitles buyer to revoke acceptance. Black v. Don Schmid Motor, Inc., 232 Kan. 458, 461, 463, 657 P.2d 517 (1983).

3. Buyer justifiably revoking acceptance entitled to prejudgment interest from date of revocation; setoff due seller for buyer's continued use of goods deductible only from total judgment. Johnson v. General Motors Corp., 233 Kan. 1044, 1045, 1047, 1048, 1054, 668 P.2d 139 (1983).

4. Revocation of acceptance permitted where flying characteristics directly contrary to representations; disclaimers of express and implied warranties ineffective. Hemmert Agr. Aviation v. Mid-Continent Aircraft, 663 F. Supp. 1546, 1551 (1987).

5. Cited in bankruptcy proceeding relating to debtor's claim involving mobile home purchase and homestead. In re Murphy, 367 B.R. 711, 715 (2007).


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