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Jones v. Atkins
Citations: 254 Ark. 472; 494 S.W.2d 448; 12 U.C.C. Rep. Serv. (West) 685; 1973 Ark. LEXIS 1537Docket: 5-6242
Court: Supreme Court of Arkansas; May 14, 1973; Arkansas; State Supreme Court
Conley Byrd, Justice, presides over a case involving Glen Atkins, who sought to enter the hog business and ordered hog panels from David Jones D/B/A Wickes Lumber Building Supply Center. Atkins initially planned to purchase heavy-duty Balhan panels, priced at $8.75 each, from Missouri. After negotiating with Larry Johnson, an employee of the appellant, Atkins ordered 228 panels at a slightly higher price of $8.77 each. Later, needing 57 additional panels, Atkins discovered Johnson was no longer with the company but placed the order anyway. Upon delivery of the second order on April 5, 1970, Atkins noticed that the wire gauge of the delivered panels was lighter than that of the first order, which he had installed only a few of. Due to the urgency of his breeding schedule, he used the lighter panels to complete his system without initially raising a complaint. Once he recognized the panels were unsuitable, he refused to pay for the 57 panels, leading the appellant to sue for their price. Atkins counterclaimed, citing non-conformity between the ordered heavy-duty panels and the delivered lightweight panels, which had faulty welds that allowed hogs to escape. At trial, the appellant sought a directed verdict based on the Uniform Commercial Code (UCC) provisions regarding the rejection of goods and buyer obligations. Specifically, Ark. Stat. Ann. 85-2-602 states that rejection must occur within a reasonable time with timely notice to the seller, while related sections outline the buyer's duties post-rejection. Seller rights regarding wrongfully rejected goods are outlined in Section 2-703 of the UCC. Acceptance of goods occurs under specific conditions: when the buyer signifies acceptance after inspection, fails to effectively reject the goods, or takes actions inconsistent with the seller's ownership, provided such actions are ratified if wrongful. Acceptance of part of a commercial unit equates to acceptance of the entire unit. In this case, the trial court dismissed the complaint and counterclaim with prejudice, ruling the relevant statutes did not apply to the facts presented. The appellant argued the court erred by not applying the UCC and suggested that the appellee's counsel admitted entitlement to a directed verdict. However, the court found that the sections cited were not relevant to the case's facts. A factual issue arose regarding the 228 panels under Ark. Stat. Ann. 85-2-608, which allows a buyer to revoke acceptance if the goods’ non-conformity significantly impairs their value. Revocation must occur within a reasonable time after discovering the non-conformity, and the buyer must notify the seller for it to be effective. If accepted goods are revoked, the buyer's rights revert to those as if the goods had been rejected. Additionally, the American Law Institute notes that acceptance precludes rejection but allows for revocation under certain circumstances, enabling the buyer to pursue remedies such as covering under section 2-712, recovering damages for non-delivery, or seeking specific performance. If revocation is not possible post-acceptance, the seller is credited for the goods' value to the buyer, with damages generally assessed as the difference between the accepted goods' value and their contracted value unless special circumstances warrant a different measure. Subsection 2-714(2) establishes the specific measure of damages for breach of warranty, superseding the more general criteria in subsection 2-714(1), which allows recovery for losses resulting from the seller's breach. Subsection 2-714(3) clarifies that consequential or incidental damages may be claimed under section 2-715. A buyer who accepts nonconforming goods may still pursue damages or recoupment despite acceptance barring revocation rights, as outlined in section 2-717. This requires the buyer to notify the seller of the intention to deduct damages from the remaining price due; however, no formal notice is mandated, as any reasonable indication of intent suffices. The excerpt includes a case where the buyer, Mr. Atkins, accepted the wrong type of wire but sought damages for the costs incurred from using it after installation. His acceptance does not bar his right to counterclaim for damages related to the nonconformity of the goods. The trial court's decision not to direct a verdict for the seller was affirmed, acknowledging the buyer's entitlement to a set-off for the damages suffered due to the nonconforming goods.