2021 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 2 - Sales
Part 6 - BREACH, REPUDIATION AND EXCUSE
Section 55-2-608 - Revocation of acceptance in whole or in part.

Universal Citation: NM Stat § 55-2-608 (2021)

(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: 1953 Comp., § 50A-2-608, enacted by Laws 1961, ch. 96, § 2-608.

ANNOTATIONS

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior uniform statutory provision. — Section 69(1) (d), (3), (4) and (5), Uniform Sales Act.

Changes. — Rewritten.

Purposes of changes. — To make it clear that:

1. Although the prior basic policy is continued, the buyer is no longer required to elect between revocation of acceptance and recovery of damages for breach. Both are now available to him. The non-alternative character of the two remedies is stressed by the terms used in the present section. The section no longer speaks of "rescission," a term capable of ambiguous application either to transfer of title to the goods or to the contract of sale and susceptible also of confusion with cancellation for cause of an executed or executory portion of the contract. The remedy under this section is instead referred to simply as "revocation of acceptance" of goods tendered under a contract for sale and involves no suggestion of "election" of any sort.

2. Revocation of acceptance is possible only where the nonconformity substantially impairs the value of the goods to the buyer. For this purpose the test is not what the seller had reason to know at the time of contracting; the question is whether the non-conformity is such as will in fact cause a substantial impairment of value to the buyer though the seller had no advance knowledge as to the buyer's particular circumstances.

3. "Assurances" by the seller under Paragraph (b) of Subsection (1) can rest as well in the circumstances or in the contract as in explicit language used at the time of delivery. The reason for recognizing such assurances is that they induce the buyer to delay discovery. These are the only assurances involved in Paragraph (b). Explicit assurances may be made either in good faith or bad faith. In either case any remedy accorded by this article is available to the buyer under the section on remedies for fraud.

4. Subsection (2) requires notification of revocation of acceptance within a reasonable time after discovery of the grounds for such revocation. Since this remedy will be generally resorted to only after attempts at adjustment have failed, the reasonable time period should extend in most cases beyond the time in which notification of breach must be given, beyond the time for discovery of non-conformity after acceptance and beyond the time for rejection after tender. The parties may by their agreement limit the time for notification under this section, but the same sanctions and considerations apply to such agreements as are discussed in the comment on manner and effect of rightful rejection.

5. The content of the notice under Subsection (2) is to be determined in this case as in others by considerations of good faith, prevention of surprise, and reasonable adjustment. More will generally be necessary than the mere notification of breach required under the preceding section. On the other hand the requirements of the section on waiver of buyer's objections do not apply here. The fact that quick notification of trouble is desirable affords good ground for being slow to bind a buyer by his first statement. Following the general policy of this article, the requirements of the content of notification are less stringent in the case of a non-merchant buyer.

6. Under Subsection (2) the prior policy is continued of seeking substantial justice in regard to the condition of goods restored to the seller. Thus the buyer may not revoke his acceptance if the goods have materially deteriorated except by reason of their own defects. Worthless goods, however, need not be offered back and minor defects in the articles reoffered are to be disregarded.

7. The policy of the section allowing partial acceptance is carried over into the present section and the buyer may revoke his acceptance, in appropriate cases, as to the entire lot or any commercial unit thereof.

Point 3: Section 2-721.

Point 4: Sections 1-204, 2-602 and 2-607.

Point 5: Sections 2-605 and 2-607.

Point 7: Section 2-601.

"Buyer". Section 2-103.

"Commercial unit". Section 2-105.

"Conform". Section 2-106.

"Goods". Section 2-105.

"Lot". Section 2-105.

"Notifies". Section 1-201.

"Reasonable time". Section 1-204.

"Rights". Section 1-201.

"Seasonably". Section 1-204.

"Seller". Section 2-103.

Rights upon revocation of acceptance. — Buyer who justifiably revokes his acceptance has the same right to rescission as though he had rejected the goods in the first place. Grandi v. LeSage, 1965-NMSC-017, 74 N.M. 799, 399 P.2d 285.

Reasonable efforts required. — After buyers accepted delivery of gelding they believed to be a stallion, they were still able to revoke acceptance by making every reasonable effort to locate and inform seller of horse's misrepresentation, upon their discovery of the mistake of sex. Grandi v. LeSage, 1965-NMSC-017, 74 N.M. 799, 399 P.2d 285.

Damages generally. — Since Subsection (3) of this section states that a buyer who revokes has same rights with regard to goods involved as if he had rejected them, plaintiff, who purchased used automobile but then revoked acceptance of the vehicle when defendant vendor failed to deliver clear title as warranted, was not precluded from recovering "nondelivery" damages under Section 55-2-711 NMSA 1978, even where physical delivery took place. Gawlick v. Am. Builders Supply, Inc., 1974-NMCA-005, 86 N.M. 77, 519 P.2d 313.

Buyer may not revoke acceptance and recover for breach. — Even though buyer is no longer required to elect between revocation of acceptance and recovery of damages for breach, recovery from one claim precludes recovery from the other. GMAC v. Anaya, 1985-NMSC-066, 103 N.M. 72, 703 P.2d 169.

Continued possession not waiver of right to revoke acceptance. — Continued possession and reasonable use of property after the buyer has notified the seller of a revocation of acceptance does not, as a matter of law, constitute a waiver of the right to revoke acceptance. O'Shea v. Hatch, 1982-NMCA-013, 97 N.M. 409, 640 P.2d 515.

Continued use of property will not negate the claim of revocation of acceptance in every case, particularly where the sellers fail to contact the buyers to arrange for removal of the property, or to show how any delay may have prejudiced them or to show that the delay could have been avoided. O'Shea v. Hatch, 1982-NMCA-013, 97 N.M. 409, 640 P.2d 515.

Strict adherence to use of specific revoking words not required of buyers: they must, however, give sufficient indication of revocation that there can be no surprise on the part of the seller. Ybarra v. Modern Trailer Sales, Inc., 1980-NMSC-044, 94 N.M. 249, 609 P.2d 331.

Actions of buyer inconsistent with revocation. — Buyer's claims that it had rejected or revoked acceptance of juniper plants by telephone statement that plants were not "up to snuff" was refuted by the fact that four months after receiving them it had removed them from their five gallon containers and had planted them in fulfillment of its contract with a third party. Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc., 1985-NMSC-098, 103 N.M. 438, 708 P.2d 1039.

"Reasonable time" within which to reject is question of fact. — The question of what is a "reasonable time" within which to rescind a sale is a question of fact which differs under the facts of each case. O'Shea v. Hatch, 1982-NMCA-013, 97 N.M. 409, 640 P.2d 515.

Reasonable to require loss claims to be made within two days. — In general, a contract provision requiring claims of loss to be made within two days of delivery is reasonable, lawful and not unconscionable. Bowlin's, Inc. v. Ramsey Oil Co., 1983-NMCA-038, 99 N.M. 660, 662 P.2d 661, cert. denied, 99 N.M. 644, 662 P.2d 645.

Four years not unreasonable time to revoke acceptance, following constant complaints. — In a suit to revoke acceptance of a contract for the sale of a mobile home, four years was not an unreasonable time for the buyer's revocation, where the buyers complained about the defects as soon as they were discovered, continually asked the seller to remedy the defects and relied upon seller's assurances that repairs would be made. Ybarra v. Modern Trailer Sales, Inc., 1980-NMSC-044, 94 N.M. 249, 609 P.2d 331.

Five years not unreasonable. — A five-year period between acceptance of a mobile home and revocation of that acceptance because of cracks in the polybutylene pipes is a "reasonable time". Jaramillo v. Gonzales, 2002-NMCA-072, 132 N.M. 459, 50 P.3d 554, cert. denied, 132 N.M. 288, 47 P.3d 447.

Proof of substantial impairment not required for rejection. — Where the buyer is simply rejecting goods, he is not required to prove substantial impairment. Deaton, Inc. v. Aeroglide Corp., 1982-NMSC-147, 99 N.M. 253, 657 P.2d 109.

"Substantial change". — Seller asserting the acceptance of a mobile home cannot be revoked after five years of use because the home has undergone "substantial change" must present evidence of the change and of the amount of depreciation. Jaramillo v. Gonzales, 2002-NMCA-072, 132 N.M. 459, 50 P.3d 554, cert. denied, 132 N.M. 288, 47 P.3d 447.

Buyer to hold goods with reasonable care. — A buyer, after having given seller notice of a rejection of goods within a reasonable time, is under a duty after rejection to hold the goods with reasonable care for a time sufficient to permit the seller to remove them. O'Shea v. Hatch, 1982-NMCA-013, 97 N.M. 409, 640 P.2d 515.

When buyer may retain possession. — Where a buyer notifies a seller of a revocation of acceptance of goods, and receives no instructions from the seller concerning the return or disposition of the property, the buyer is entitled to retain possession of such property. O'Shea v. Hatch, 1982-NMCA-013, 97 N.M. 409, 640 P.2d 515.

Comparative liability is not part of the UCC under this section. Bowlin's, Inc. v. Ramsey Oil Co., 1983-NMCA-038, 99 N.M. 660, 662 P.2d 661, cert. denied, 99 N.M. 644, 662 P.2d 645.

Law reviews. — For comment, "The Miller Act in New Mexico - Materialman's Right to Recover on Prime's Surety Bond in Public Works Contracts - Notice as Condition Precedent to Action," see 9 Nat. Resources J. 295 (1969).

For annual survey of New Mexico law relating to commercial law, see 12 N.M.L. Rev. 173 (1982).

For annual survey of New Mexico law relating to commercial law, see 13 N.M.L. Rev. 293 (1983).

For article, "New Mexico's 'Lemon Law': Consumer Protection or Consumer Frustration?", see 16 N.M.L. Rev. 251 (1986).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 63 Am. Jur. 2d Products Liability §§ 521 to 525.

Resale by buyer where seller has refused to receive property rejected for breach of warranty, 24 A.L.R. 1445.

Acceptance of installment of goods as affecting buyer's right to rescind because of defects in that installment, 29 A.L.R. 1517.

Abandonment of possession as prerequisite to vendee's suit to obtain a rescission or to recover back money paid, 142 A.L.R. 582.

Buyer's return of subject of sale and acceptance of return or credit for the purchase price as affecting right to recover special damages for breach of warranty, 157 A.L.R. 1077.

Measure and elements of recovery of buyer rescinding sale of domestic animal for seller's breach of warranty, 35 A.L.R.2d 1273.

Use of article by buyer as waiver of right to rescind for fraud, breach of warranty or failure of goods to comply with contract, 41 A.L.R.2d 1173.

What constitutes "substantial impairment" entitling buyer to revoke his acceptance of goods under UCC § 2-608(1), 38 A.L.R.5th 191.

77A C.J.S. Sales § 199 et seq.

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