42.  Unless otherwise agreed under the sections on contractual limitations of remedy, if the goods or the tender of delivery fail in any material respect to conform to the contract, the buyer may- 

a.  reject the whole; or 

b.  accept the whole; or 

c.  accept any commercial unit or units and reject the rest. 

Manner and Effect of Rightful Rejection 

43.1  Rejection of goods must be within a reasonable time after their delivery or tender.  The rejection of goods is ineffective unless the buyer timely notifies the seller and states his reasons for rejection. 

43.2  Subject to Section 44 on rejected goods, 

a.  after rejecting the goods, any exercise of ownership by the buyer is wrongful as against the seller; and 

b.  if the buyer, before rejecting the goods, has taken physical possession of goods in which he does not have a security interest, he is under a duty after rejection to hold them with reasonable care for a time sufficient to permit the seller to remove them; but 

c.  the buyer has no further obligations with regard to good rightfully rejected. 

43.3  The seller’s rights with respect to goods wrongfully rejected are governed by Section 54. 

Merchant Buyer’s Duties as to Rightfully Rejected Goods 

44.1  Notwithstanding Section 43.2., and subject to any security interest held by the buyer, when the seller has no agent or place of business at the market where the goods are rejected, a merchant buyer has a further duty after rejecting goods in his possession or control to follow any reasonable instructions received from the seller with respect to the goods.  In the absence of such instructions, the merchant buyer is to make reasonable efforts to sell the goods for the seller’s account if the goods are perishable or threaten to decline in value speedily. Instructions are not reasonable if, upon demand, indemnity for expenses is not forthcoming. 

44.2  When the buyer sells goods under subsection 1, he is entitled to reimbursement from the seller or out of the proceeds for the reasonable expenses of caring for the selling the goods. 

What Constitutes Acceptance of  Goods 

45.  Acceptance of goods occurs when the buyer- 

a.  after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non conformity; or 

b.  fails to make an effective rejection, but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect the goods; or 

c.  does any act that, no a reasonable person, would indicate that the seller does not own the goods. 

Effect of Acceptance; Notice of Breach; Burden of Establishing Breach After Acceptance

46.1  The buyer must pay at the contract rate for any goods accepted. 

46.2  Once the buyer accepts the goods, he may not later revoke his acceptance based on the goods not conforming to the contract if, at the time he accepted the goods, he knew of this non conformity, unless he accepted the goods on the reasonable assumption that the non conformity would be timely cured.  Acceptance under the preceding sentence does not of itself impair any other remedy provided by These Regulations for non conformity. 

46.3  Where a tender has been accepted, the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and 

46.4  The burden is on the buyer to establish any breach with respect to the goods accepted. 

Revocation of Acceptance in Whole or in Part 

47.1  If the non-conformity of goods substantially impairs the value of a commercial unit, the buyer may revoke his acceptance if he has accepted the goods 

a.  on the reasonable assumption that the non-conformity would be cured and it has not been timely cured; or 

b.  without discovering such non-conformity, provided his acceptance was reasonably induced either by the difficulty of discovering the non-conformity or by the seller’s assurances. 

47.2  Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in the condition of the goods which is not caused by their own defects.  Revocation is not effective until the buyer notifies the seller of it. 

47.3  A buyer who so revokes goods has the same rights and duties with regard to those goods as if he had rejected them. 

Right to Adequate Assurance of Performance

48.1  A contract for sale imposes an obligation on each party not to impair the other party’s expectation of receiving due performance.  When reasonable grounds for insecurity arise with respect to the performance of either party, the other may in writing demand adequate assurance of performance. Until he receives such assurance, the party may, if commercially reasonable, suspend any performance for which he has not already received the agreed return. 

48.2  After receiving a justified demand for assurance, a party’s failure to provide adequate assurance under the circumstances and within a reasonable time may be deemed by the other party to be a repudiation of the contract. 

Anticipatory Repudiation 

49.  When  either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may- 

a.  for a commercially reasonable time await performance by the repudiating party; or 

b.  resort to any remedy for breach, even though he has notified the repudiating party that he will await the latter’s performance and has urged retraction; and 

c.  in either case suspend his own performance or proceed in accordance with the provisions of 
these Regulations. 

Retraction of Anticipatory Repudiation 

50.1  Until the repudiating party’s next performance is due, he can retract his repudiation, unless the aggrieved party has materially changed his position after the repudiation or otherwise indicated that the considers the repudiation final. 

50.2  Retraction must include any assurance justifiably demanded under the provision of These Regulations. 

50.3  Retraction reinstates the repudiating party’s rights under the contract with due excuse and allowance to the aggrieved party for any delay occasioned by the repudiation. 

Casualty to Identified Goods 

51.  Where the contract requires goods to be identified when the contract is made, and the goods suffer casualty without the fault of either party before the risk of loss passes to the buyer, then- 

a.  if the loss is total, the buyer and seller are relieved of their obligations under the contract; and 

b.  if the loss is partial  or the goods have so deteriorated as no longer to conform to the contract, the buyer may nevertheless demand inspection and, is his option, he may either treat the contract as void or accept the goods with due allowance from the contract price for the deterioration or the deficiency in quantity but without further  right against the seller. 

Excuse by failure of Presupposed Condition 

52.  Unless otherwise agreed, the failure of either buyer or the seller to perform under the contract is not a breach if performance has been made impracticable by the occurrence of a material contingency that both parties assumed would not occur or any applicable foreign or domestic governmental law or order, whether or not it later proves to be invalid. Under these circumstances, the seller promptly must notify the buyer that three will be a delay or non delivery, and the buyer may demand assurances pursuant to Section 48.

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