Contracts II, Pages 968–974

Ramirez v. Autosport

Supreme Court of New Jersey, 1982

Facts:

Plaintiffs bought a camper, while trading in their old camper. They paid $14,100 and received a $4,700 trade-in allowance. When they went to pick up the camper and to pay, they discovered scratches in the paint and that the sewer and electric hookups and hubcaps were not installed. The salesman advised them to not accept as it was not ready.

For ten days, they repeatedly called about it and were told it was not ready, until defendant called plaintiffs to tell them that it was ready. When they again went to pick it up, the paint was still being touched up, the windows were open, and the interior cushions were soaked. Defendant asked plaintiff to accept the vehicle as it was and that defendant would replace the cushions later. Plaintiffs said they would accept if they could withhold $2,000, but defendant said it could only do $250 withheld.

The next day, defendant transferred the title to plaintiffs without telling them. Plaintiffs called and were told to pick it up in two weeks. When they went to pick it up, they were asked to wait but left when no one came after an hour and a half of waiting. Plaintiffs then visited an attorney and asked for a return of their old camper. Defendant refused, believing that the sale could be completed if the price was reduced and sold the old camper.

Procedural History:

  • Trial court ruled that plaintiffs rightfully rejected the camper and awarded them the fair market value of their trade-in.

  • Appellate court affirmed.

Issue:

Could plaintiffs reject defendant's tender and cancel the contract due to minor defects?

Rules:

  • A buyer may reject goods before acceptance for any nonconformity, but the seller has a right to cure. The seller also has an unconditional right to cure before the time set for performance. After the time set for performance, the seller has a further reasonable time to cure if he reasonably believed that the good would be acceptable. This time period is based on the circumstances, including the change of position by and inconvenience to the buyer, length of time needed to correct the nonconformity, and ability to sell the goods to others instead.

    After acceptance, a buyer can only revoke acceptance if the nonconformity substantially impairs the value of the goods to him.

  • Failure to cure a minor defect allows the buyer to cancel the contract.

Reasoning:

Plaintiffs rejected the camper in a reasonable time, as defendant's salesman advised them to. Defendant did not cure the defects when they had ample time to do so. As the old camper had already been sold, plaintiffs are entitled to the fair market value of it, which trade-in value is an appropriate measure of.

Holding:

Plaintiffs rightfully rejected the tender and canceled the contract. Affirmed.

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