Wrongful Rejection of Goods

Wrongful Rejection of Goods

Definition

Under the Uniform Commercial Code, a merchant buyer seeking to reject delivery of goods must act in good faith, which includes honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. This duty of good faith applies when a merchant buyer seeks to reject delivery of goods on the grounds that either the goods themselves or the tender of delivery fails to conform to the contract. If a merchant buyer wrongfully rejects goods by doing so without exercising good faith, the buyer is liable for breach of contract.

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