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Jakowski v. Carole Chevrolet Inc.

Decided: May 5, 1981.

STANLEY JAKOWSKI AND JOAN JAKOWSKI, PLAINTIFFS,
v.
CAROLE CHEVROLET, INC., ET AL., DEFENDANTS



Newman, J.s.c.

Newman

Plaintiff seeks summary judgment on count I of the complaint alleging breach of a new car sales contract by defendant Carole Chevrolet, Inc.

The essential facts are not in dispute. On March 8, 1980 plaintiff Jakowski (hereinafter "buyer") entered into a contract of sale with defendant Carole Chevrolet, Inc. (hereinafter "seller"), calling for the purchase of one new 1980 Chevrolet Camaro. The parties also agreed that the car would be undercoated and that its finish would have a polymer coating. While there is some disagreement as to exactly when the buyer ordered the coatings, it is undisputed that prior to delivery the seller agreed to deliver the car with the coatings applied. Likewise, it is undisputed that the car in question was delivered to the buyer without the required coatings on May 19, 1980.

The next day, May 20, 1980, the seller contacted the buyer and informed him that the car delivered to him lacked the coatings in question and seller instructed buyer to return the car so that the coatings could be applied. On May 22, 1980 the buyer returned the auto to the seller for application of the coatings. Sometime during the evening of May 22 or the morning of May 23 the car was stolen from the seller's premises and it was never recovered. Seller has refused to either provide a replacement auto to buyer or to refund the purchase price. Buyer remains accountable on the loan, provided through GMAC, for the purchase of the car.

The narrow question thus presented is upon whom, as between buyer and seller, this loss should fall. In U.C.C. terminology, on May 22, 1980 which party bore the risk of the car's loss.

Seller argues that the risk of loss passed to the buyer upon his receipt of the auto. This is consistent with U.C.C. § 2-509(3) pursuant to which the risk of loss passes to the buyer upon his receipt of the goods. Section 2-509(4), however, expressly provides that the general rules of § 2-509 are subject to the more specific provisions of § 2-510 which deals with the effect of breach upon risk of loss.

Buyer relies upon § 2-510(1) which provides:

Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance.

Application of this section to the instant facts requires that three questions be answered. First, did the car "so fail to conform" as to give this buyer a right to reject it? If so, did the buyer "accept" the car despite the nonconformity? Finally, did the seller cure the defect prior to the theft of the auto?

The first question must be answered in the affirmative. The contract*fn1 provided that the car would be delivered with undercoating and a polymer finish, and it is undisputed that it was delivered without these coatings. The goods were thus clearly nonconforming and, despite seller's assertion to the contrary, the degree of their nonconformity is irrelevant in assessing the buyer's concomitant right to reject them. N.J.S.A. 12A:2-106 is clear in its intent to preserve the rule of strict compliance, that is, the "perfect tender" rule:

Goods . . . are "conforming" or conform to the contract when they are in accordance with the obligations under the contract. [ N.J.S.A. 12A:2-106(2), emphasis ...


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