Suppose a liquor store owner enters into a contract with an out-of-state alcohol

Question

Suppose a liquor store owner enters into a contract with an out-of-state alcohol wholesaler to deliver 100 cases of an alcoholic beverage called Four Lokos each month on the first of the month for the next six months. However, after the contract is created, a newly enacted state regulation that neither party anticipated forbids the importation of Four Lokos due to health and safety concerns. Subsequently, the wholesaler does not deliver the beverage as promised in the contract, but does offer to deliver a similar, legal beverage to the liquor store instead. The liquor store owner is upset about the nondelivery of the product and demands the delivery of the beverage under the perfect tender rule.

1. What is the perfect tender rule? In this situation, what are the terms that the alcohol wholesaler must meet to qualify as perfect tender?

2. Does the situation described in the case fall under any exceptions to the perfect tender rule?

3. Suppose that the facts of the case change and that in the state in question, no state regulation exists banning the beverage. However, there is another problem with the delivery of the product. Suppose something happens in the manufacturing of the Four Lokos and there is a problem with the ingredients. Somehow the product is manufactured without alcohol in it and the product is thereby not an accurate representation of what the liquor store ordered. Neither party disputes that the Four Lokos in question were nonconforming goods. What recourse is possible for the alcohol wholesaler to fix the problem?

Explanation / Answer

The Perfect Tender rule gives legal right to a buyer to insist that the goods purchased conform precisely to the product description in quality, quantity, and manner of delivery. If the goods fail to conform to the description, the buyer may legally reject the goods offered and does not require to pay for the goods received. The Perfect Tender Rule applies even when there is a signed contract for the purchase of the goods, requiring that the seller must supply goods that conform absolutely with the buyer’s stated demands. In this case the alcohol seller must supply the good which has been ordered by the store i.e four lokos. This case falls under Wrong Product & does not stand any Exception. Liquor Store enters into a contract with alcohol wholesaler. The contract states that alcohol wholesaler will deliver 100 Cases Four Lokos to Liquor Store each month. The contract goes smoothly for six months, and then on the seventh month, alcohol wholesaler delivers to Liquour Store 100 similar Legal Beverage instead of Four Lokos. According to the perfect tender rule, Liquor Store is not obligated to accept or pay for any other Beverage. If alcohol wholesaler has time to make the correct delivery, however, and agrees to correct the problem, Liquor Store will be obligated to accept the Four Lokos and pay for them as agreed.

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