Over the many years that we have been writing this column, we’ve often talked about the importance of a proper and timely notice. One of the most important of the notices required by the Uniform Commercial Code (UCC) is the one that must be given by a buyer who is unhappy with what has been delivered to him by the seller. This section, in part, very simply states that after goods have been delivered, “the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of the breach or be barred from any remedy over for liability established by the litigation.”

The law books are full of cases of buyers who were forced to pay for defective goods because they failed to give proper and timely notice to sellers, that the goods which were delivered were not all they were supposed to be. Although many dealers seem to feel if they simply don’t pay for the delivery they are giving adequate notice of their unhappiness with the delivery, most judges would not agree.

The above law states the notice must be given within a reasonable time after the buyer discovers, or should have discovered the breach. Although the rule sounds simple enough, a judge or jury must often be called upon to determine when the buyer did or should have discovered the claimed defect and whether the notice given was within a reasonable time thereafter.

One very tricky area of improper performance which arises with this section is the question of late delivery. This problem occurs when the breach of contract eventually claimed by the buyer is based upon the simple fact that the seller delivered the goods later than promised and this late delivery caused the buyer to suffer monatary damages. Many buyers in this situation might feel that since the seller is fully aware that the goods are being delivered late, that no further notice need be given. This is often not true.

In one recent case, a buyer relied upon the seller’s knowledge that he was making a very late delivery and gave him no other actual knowledge until the lawsuit, which was filed some time much later. Despite the seller’s objection, the federal court judge found no problem with this lawsuit, finding that it would be “an unreasonable, if not absurd, construction” of the law to require that notice be given of a late delivery. Since the seller already had actual knowledge of the delayed delivery, the court noted, the notice provision of the law was satisfied.

The seller was not happy with this decision and appealed it to a federal appeals court. It agreed with the seller and threw out the buyer’s claim of damages. The court held that a proper and timely notification of breach must be given by an unhappy buyer, even when his only unhappiness is the late delivery of his purchase, and even when there is no doubt that the seller already knew the goods were being delivered later than promised.

This case contains another very important aspect. It seems the buyer, in the case, actually did complain to the seller about the delivery not being made on time. These complaints were both oral and put into written letter form. The buyer argued that this notification was sufficient since the official comments to this section of the UCC say, “the content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched.”

However, this appeals court, which covers the federal courts in several states, apparently decided that a very formal notice, perhaps containing a promise of a lawsuit, was the only method by which to comply with the requirements of this section.

In line with this hard approach was a recent Alaskan Supreme Court decision which found that even the filing of a lawsuit based upon a late delivery would not satisfy this notice provision of the UCC. It found, as did the federal appeals court, this section required an actual “Notice of Breach” and anything less would not do.

These courts have, it seems, taken this provision to the extreme. However, although the courts in most jurisdictions would place a much lighter burden on an unhappy buyer, the smart and unhappy buyer would be wise to immediately complain in proper writing. To do otherwise is to take an unnecessary risk.