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101 Ballentine Road, L.L.C. v. GPS Plumbing, Inc.

A-2518-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

UCC; ACCEPTANCE — Where the recipient of goods does not have an opportunity to inspect the goods, and the supplier knows there was no opportunity, the goods still can be rejected later for any non-conformity discovered in a later inspection.

A single family home developer hired a contractor to install heating tubing under the floor for a radiant heating system. Several years earlier, the same contractor had installed part of the system by using a specific copper fitting that only one company manufactured. While the contractor was on vacation, new tubing and various other material items were received from the supplier . The delivery receipts were marked “received but not inspected” by the developer’s project manager. At the time of delivery, the supplier was aware that the contractor was on vacation and could not inspect the shipment until he returned. When the contractor returned, he realized the fittings were different from what he had ordered and spoke to the supplier to cure the problem. They were unable to reach an accord, and the developer rejected all of the goods approximately six weeks after receiving them. Subsequently, the developer purchased the entire order from another plumbing supply company.

The developer sued the first supplier to recover the value of the entire order. The developer’s office manager testified that she advised the supplier to provide everything noted on the contractor’s list. The contractor had prepared a list of materials to be supplied, and wrote the tradename of the originally supplied copper fitting. The contractor testified that he had purchased that type of copper fitting for the same home in the past, and wanted the same fittings throughout the home. He was accustomed to installing that particular product and knew he had the proper tool for installing that particular brand of fitting. The lower court found that the fittings provided by the supplier were non-conforming in that $4,000 of the total order was the wrong brand of copper fitting, and ruled the developer had properly rejected the entire order and could return it in exchange for a complete refund.

The supplier appealed, arguing because the words “no substitutions allowed” or “only [the product name] accepted” did not appear on the items list, it was authorized to use a comparable fitting. The supplier also argued that by acknowledging delivery, the developer accepted the goods pursuant to the Uniform Commercial Code (UCC).

The Appellate Division affirmed, agreeing with the lower court that the developer never accepted the goods under the UCC because the contractor did not have an opportunity to inspect the goods until he returned from vacation. The Court said that, before acceptance, a buyer may reject goods for any nonconformity. It directed the supplier to pick up its defective order at its own expens

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