Question

​Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuners manager notices that some of the cartons have scrape marks. Tuners owner phones Signal’s office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15. Two days later, Tuner’s stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain

Answer 1

Answer:

The answer is: Signal will not succeed on their claims.

Explanation:

In order for acceptance of a product to be valid, the buyer must accept the products after inspection and give formal acceptance, or fail to reject the products after a reasonable time for inspection. Only after the products are accepted does the buyer lose any rights to revoke acceptance.

In this case, Turner accepted the TVs based on Signal's promise that they were in perfect condition, but after inspection, Turner can revoke that acceptance do to damages on the products.

Both companies agreed that the payment should be done upon delivery, but there was no specific payment method. Turner tried to pay with a check that Signal rejected. Signal cannot demand a cash payment because a check is a valid payment.