43. On June 5, which of the following is a correct statement of the parties' legal rights and duties?

Some offers are ambiguous about if they invite acceptance through a return promise or through performance (thus forming a unilateral contract). This commonly occurs when the offer is a request that the goods be shipped. In this situation, the Uniform Commercial Code (UCC) states that an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt shipment of conforming OR non-conforming goods, OR a prompt promise to ship. UCC § 2-206(1)(b).

Under the UCC, when a seller sends a prompt shipment of non-conforming goods (without an affirmative acceptance of the offer), the shipment itself is an acceptance of the offer and a breach of the contract. The buyer may respond in multiple ways, including accepting the non-conforming goods or rejecting them. If the buyer decides to reject the non-conforming goods, he can then sue for breach. If a seller seasonably notifies the buyer that the shipment of non-conforming goods is being offered only as an accommodation to the buyer, the seller's mere shipment of those non-conforming goods will NOT result in a breach. UCC § 2-206(1)(b). This is in contrast to when the seller affirmatively accepts a buyer's offer and ships non-conforming goods, in which case the seller may be sued for breach of the valid, original contract.

If the seller accepts by shipment of non-conforming goods, the buyer can choose to accept the accommodation shipment, which is NOT considered an official acceptance, but rather a counter-offer of the goods that have shipped as they are. If the buyer does accept the accommodation shipment, a contract for the goods as they are will be formed. If the buyer chooses to reject the accommodation shipment, no contract will be found to have formed at all, and the buyer may not sue the seller for breach.

A is correct. On June 5, the buyer had received the acceptance letter for the original offer to purchase the correct model of computers and had also received the non-conforming goods. Therefore, as of June 5, the only legally significant facts were: (i) the acceptance of the offer to purchase of the original computers; and (ii) the seller's shipment of non-conforming goods. The seller's mailing of notice that the non-conforming goods was an accommodation is a factual red herring. As of June 5, the buyer was in the position of simply having received a shipment of goods that were not in conformity to the original, valid contract. In that scenario, under UCC § 2-206(1)(b), the seller's shipment of non-conforming goods amounts to a breach. The buyer may accept, reject, or reject it in part. Under any of those courses of action, the buyer may sue for breach and recover damages, if any.

B is incorrect. This answer is only partially correct. The seller's shipment of non-conforming goods did give the buyer the option to either accept or reject the different computers. However, by rejecting it, he does not waive any remedy for breach of contract. This is because by shipping non-conforming goods along with an affirmative acceptance of the offer, the seller was in breach of the valid contract to purchase the original computers.

C is incorrect. The seller's June 2 letter was an acceptance of the buyer's original offer, and the seller's shipment of non-conforming goods (the different computers of a different model) constituted a breach of that original contract. The fact that the seller mailed an acceptance letter means that the shipment of the non-conforming goods could not be a counter-offer, but rather, was a breach.

D is incorrect. The mailing of the notice of accommodation was irrelevant because, as of June 5, the seller accepted the buyer's offer by promising to ship the correct computers and then failed to do so by shipping the different computers. The buyer can accept or reject the non-conforming computers and recover damages, if any, for breach.