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Case 11.1 Contract Sales and Lease Contracts: Performance and Breach

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443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
Court of Appeals of New York.
T.W. OIL, INC., Formerly Known as Joc Oil USA,
Inc., Respondent,
v.
CONSOLIDATED EDISON COMPANY OF NEW
YORK, INC., Appellant.
Dec. 15, 1982.
Seller brought action to recover damages incurred
when buyer rejected seller's offer to cure noncon-
forming oil cargo. The Supreme Court, New York
County, Trial Term, Shanley N. Egeth, J., 107
Misc.2d 376, 434 N.Y.S.2d 623, rendered judgment
in favor of seller, and buyer appealed. The Supreme
Court, Appellate Division, 84 A.D.2d 970, 447
N.Y.S.2d 572, affirmed. On appeal by permission,
the Court of Appeals, Fuchsberg, J., held that: (1) it
was not error for trial court to disregard as irrelev-
ant the verdict on a special verdict; (2) buyer's con-
tention that trial court erred in refusing to charge on
certain statutory provisions was not preserved for
review; (3) seller, who, acting in good faith and
without knowledge of any defect, tenders noncon-
forming goods to buyer who properly rejects them,
may avail itself of provisions of certain statute and
offer to cure defects within a reasonable period
beyond time when contract was to be performed, on
seasonable notice, if seller has acted with reason-
able expectation that the original goods would be
acceptable to buyer; and (4) trial court would not be
found to have erred in calculating damages on basis
of difference between contract price and resale
price of nonconforming cargo, rather than sale price
of cargo offered to replace it.
Order affirmed.
West Headnotes
[1] Sales 343 389
343 Sales
343VII Remedies of Seller
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 1
343VII(F) Actions for Damages
343k385 Trial
343k389 k. Verdict and Findings. Most
Cited Cases
It was not error for trial court to disregard as irrel-
evant a verdict on special verdict, submitted for de-
termination by jury pursuant to an agreement
between the parties, as to whether defendant buyer
acted “reasonably” in rejecting substitute oil cargo
to replace a nonconforming cargo where the legal
issue to be resolved was whether seller's conduct in
offering to cure was reasonable within meaning of
statutory provision which did not contain any re-
quirement that the buyer's rejection should be reas-
onable. McKinney's Uniform Commercial Code §
2-508(2).
[2] Appeal and Error 30 216(1)
30 Appeal and Error
30V Presentation and Reservation in Lower
Court of Grounds of Review
30V(B) Objections and Motions, and Rulings
Thereon
30k214 Instructions
30k216 Requests and Failure to Give
Instructions
30k216(1) k. In General. Most
Cited Cases
Appeal and Error 30 263(3)
30 Appeal and Error
30V Presentation and Reservation in Lower
Court of Grounds of Review
30V(C) Exceptions
30k258 Review of Proceedings at Trial
30k263 Instructions, and Failure or
Refusal to Give Instructions
30k263(3) k. Failure or Refusal to
Give Instructions. Most Cited Cases
Defendant's contention that trial court erred in re-
fusing to charge on certain statutory provisions was
not preserved for review where defense counsel did
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
not join either in plaintiff's request that the statute
be read to jury or in the exception to the court's re-
fusal to do so.
[3] Sales 343 177
343 Sales
343IV Performance of Contract
343IV(C) Delivery and Acceptance of Goods
343k177 k. Obligation to Accept in Gen-
eral. Most Cited Cases
Statute, which permits seller to cure defective
tender, is intended to act as a meaningful limitation
on the absolutism of the perfect tender rule under
which no leeway was allowed for any imperfec-
tions. McKinney's Uniform Commercial Code §
2-508.
[4] Sales 343 153
343 Sales
343IV Performance of Contract
343IV(C) Delivery and Acceptance of Goods
343k153 k. Tender or Offer by Seller.
Most Cited Cases
Seller, who, acting in good faith and without know-
ledge of any defect, tenders nonconforming goods
to buyer who properly rejects them, may avail itself
of provisions of certain statute and offer to cure de-
fect within reasonable period beyond time when
contract was to be performed, on seasonable notice,
if seller has acted with reasonable expectation that
the original goods would be acceptable to buyer;
the statute does not limit availability of such right
to cure to cases in which seller knowingly makes a
nonconforming tender. McKinney's Uniform Com-
mercial Code § 2-508(2).
[5] Sales 343 1(1)
343 Sales
343I Requisites and Validity of Contract
343k1 Nature and Essentials of Contract for
Sale of Personal Property in General
343k1(1) k. In General. Most Cited Cases
Uniform Commercial Code applies to buyers as
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 2
well as sellers to extent that it displaces traditional
principles of law and equity by seeking to discour-
age unfair or hypertechnical business conduct be-
speaking a dog-eat-dog rather than a live-
and-let-live approach to the marketplace. McKin-
ney's Uniform Commercial Code §§ 1-103, 2-314,
2-315, 2-513, 2-601, 2-608.
[6] Sales 343 1(1)
343 Sales
343I Requisites and Validity of Contract
343k1 Nature and Essentials of Contract for
Sale of Personal Property in General
343k1(1) k. In General. Most Cited Cases
Overall aim of Uniform Commercial Code is to en-
courage parties to amicably resolve their own prob-
lems.
[7] Appeal and Error 30 206
30 Appeal and Error
30V Presentation and Reservation in Lower
Court of Grounds of Review
30V(B) Objections and Motions, and Rulings
Thereon
30k202 Evidence and Witnesses
30k206 k. Reception of Evidence.
Most Cited Cases
(Formerly 30k206(1))
Appeal and Error 30 221
30 Appeal and Error
30V Presentation and Reservation in Lower
Court of Grounds of Review
30V(B) Objections and Motions, and Rulings
Thereon
30k221 k. Amount of Recovery or Extent
of Relief. Most Cited Cases
In action in which seller had sought to recover dam-
ages incurred when buyer rejected seller's offer to
cure nonconforming oil cargo, trial court would not
be found to have erred in calculating damages on
basis of difference between contract price and re-
sale price of nonconforming cargo, rather than sale
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
price of cargo offered to replace it, where buyer did
not object to the method used in calculating dam-
ages or to seller's introduction of proof of the resale
price and where jointly framed advisory questions
which went to the jury indicated that both parties
were acting on assumption that the nonconforming
oil was the one with which the court was to be con-
cerned. McKinney's Uniform Commercial Code §
2-508(2).
[8] Appeal and Error 30 171(1)
30 Appeal and Error
30V Presentation and Reservation in Lower
Court of Grounds of Review
30V(A) Issues and Questions in Lower Court
30k171 Nature and Theory of Cause
30k171(1) k. In General; Adhering to
Theory Pursued Below. Most Cited Cases
An agreement on theory of damages at trial, even if
only implied, must control on appeal.
*575 ***460 **934 Barry S. Goldstein, Ernest J.
Williams, Sheila Solomon Rosenrauch, New York
City, and Patricia M. Fruehling, for appellant.
*576 David L. Maloof, Francis J. McCaffrey,
James J. Ruddy and Daniel G. McDermott, New
York City, for respondent.
*577 OPINION OF THE COURT
FUCHSBERG, Judge.
In the first case to wend its way through our appel-
late courts on this question, we are asked, in the
main, to decide whether a seller who, acting in
good faith and without knowledge of any defect,
tenders nonconforming goods to a buyer who prop-
erly rejects them, may avail itself of the cure provi-
sion of subdivision (2) of section 2-508 of the Uni-
form Commercial Code. We hold that, if seasonable
notice be given, such a seller may offer to cure the
defect within a reasonable period beyond the time
when the contract was to be performed so long as it
has acted in good faith and with a reasonable ex-
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 3
pectation that the original goods would be accept-
able to the buyer.
The factual background against which we decide
this appeal is based on either undisputed proof or
express findings at Trial Term. In January, 1974,
midst the fuel shortage produced by the oil em-
bargo, the plaintiff (then known as Joc Oil USA,
Inc.) purchased a cargo of fuel oil whose sulfur
content was represented to it as no greater than 1%.
While the oil was still at sea en route to the United
States in the tanker M T Khamsin, plaintiff received
a certificate from the foreign refinery at which it
had been processed informing it that the sulfur con-
tent in fact was .52%. Thereafter, on January 24,
the plaintiff entered into a written contract with the
defendant (Con Ed) for the sale of this oil. The
agreement was for delivery to take place between
January 24 and January 30, payment being subject
to a named independent testing agency's confirma-
tion of quality and quantity. The contract, following
a trade custom to round off specifications of sulfur
content at, for instance, 1%, .5% or .3%, described
FN1
that of the Khamsin oil as .5%. In the course of
the negotiations, the plaintiff learned that Con Ed
was then authorized to buy and burn oil with a sul-
fur content of up to 1% and would even mix oils
containing more and less to maintain that figure.
FN1. Confirmatorily, Con Ed's brief de-
scribes .92% oil as “nominally” 1% oil.
When the vessel arrived, on January 25, its cargo
was discharged into Con Ed storage tanks in Bay-
FN2
onne, New *578 Jersey. In due course, the in-
dependent testing people reported a sulfur content
of .92%. On this basis, acting within a time frame
whose reasonableness is not in question, on Febru-
ary 14 Con Ed rejected the shipment. Prompt nego-
tiations to adjust the price failed; by February 20,
plaintiff had offered a price reduction roughly re-
sponsive to the difference in sulfur reading, but
Con Ed, though it could use the oil, rejected this
proposition out of hand. It was insistent on paying
no more than the latest prevailing price, which, in
the volatile market that then existed, was some 25%
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
below the level which prevailed when it agreed to
buy the oil.
FN2. The tanks already contained some
other oil, but Con Ed appears to have had
no concern over the admixture of the dif-
fering sulfur contents. In any event, the ef-
ficacy of the independent testing required
by the contract was not impaired by the
commingling.
***461 **935 The very next day, February 21,
plaintiff offered to cure the defect with a substitute
shipment of conforming oil scheduled to arrive on
the S.S. Appollonian Victory on February 28. Nev-
ertheless, on February 22, the very day after the
cure was proffered, Con Ed, adamant in its inten-
tion to avail itself of the intervening drop in prices,
summarily rejected this proposal too. The two car-
gos were subsequently sold to third parties at the
best price obtainable, first that of the Appollonian
and, sometime later, after extraction from the tanks
FN3
had been accomplished, that of the Khamsin.
FN3. Most of the Khamsin oil was drained
from the tanks and sold at $10.75 per bar-
rel. The balance was retained by Con Ed in
its mixed form at $10.45 per barrel. The
original price in January had been $17.875
per barrel.
FN4
There ensued this action for breach of contract,
which, after a somewhat unconventional trial
course, resulted in a nonjury decision for the
plaintiff in the sum of $1,385,512.83, essentially
the difference between the original contract price of
$3,360,667.14 and the amount received by the
plaintiff by way of resale of the Khamsin oil at
what the court found as a matter of fact was a nego-
tiated *579 price which, under all the circum-
FN5
stances, was reasonably procured in the open
market. To arrive at this result, the Trial Judge,
while ruling against other liability theories ad-
vanced by the plaintiff, which, in particular, in-
cluded one charging the defendant with having
failed to act in good faith in the negotiations for a
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 4
price adjustment on the Khamsin oil (Uniform
Commercial Code, § 1-203), decided as a matter of
law that subdivision (2) of section 2-508 of the
Uniform Commercial Code was available to the
plaintiff even if it had no prior knowledge of the
nonconformity. Finding that in fact plaintiff had no
such belief at the time of the delivery, that what
turned out to be a .92% sulfur content was “within
the range of contemplation of reasonable acceptab-
ility” to Con. Ed., and that seasonable notice of an
intention to cure was given, the court went on to
hold that plaintiff's “reasonable and timely offer to
cure” was improperly rejected ( sub nom. Joc Oil
USA v. Consolidated Edison Co. of N.Y., 107
Misc.2d 376, 390, 434 N.Y.S.2d 623 [Shanley N.
Egeth, J.] ). The Appellate Division, 84 A.D.2d
970, 447 N.Y.S.2d 572, having unanimously af-
firmed the judgment entered on this decision, the
case is now here by our leave (CPLR 5602, subd.
[a], par. 1, cl. [i] ).
FN4. The plaintiff originally also sought
an affirmative injunction to compel Con
Ed to accept the Khamsin shipment or, al-
ternatively, the Appollonian substitute.
However, when a preliminary injunction
was denied on the ground that the plaintiff
had an adequate remedy at law, it amended
its complaint to pursue the latter remedy
alone.
FN5. These circumstances included the
fact that the preliminary injunction was not
denied until April so that, by the time the
Khamsin oil was sold in May, almost three
months had gone by since its rejection.
In support of its quest for reversal, the defendant
now asserts that the trial court erred (a) in ruling
that the verdict on a special question submitted for
determination by a jury was irrelevant to the de-
cision of this case, (b) in failing to interpret subdi-
vision (2) of section 2-508 of the Uniform Com-
mercial Code to limit the availability of the right to
cure after date of performance to cases in which the
seller knowingly made a nonconforming tender and
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
(c) in calculating damages on the basis of the resale
of the nonconforming cargo rather than of the sub-
stitute offered to replace it. For the reasons which
follow, we find all three unacceptable.
I [1] That the court so understood its responsibility is
Initially, we deal with the threshold contention over
the special verdict, which, though not complex, if
erroneously decided below, would require reversal.
A product of an ad hoc pretrial arrangement peculi-
ar to this case, on analysis, *580 however, it
presents but another example of a decision by op-
posing parties in a civil case to chart their own lit-
igation course, to which, unless public policy is af-
fronted, the law ordinarily raises no obstacle ( Mar-
tin v. City of Cohoes, 37 N.Y.2d 162, 165-166, 371
N.Y.S.2d 687, 332 N.E.2d 867). Here, by stipula-
tion, the ***462 **936 parties, who, of course,
were free to waive a jury entirely, in effect releg-
ated the special verdict, which otherwise could not
be set aside merely because the court disagreed
with it ( Vaughn-Rees v. Connolly, 30 A.D.2d 785,
291 N.Y.S.2d 705, affd. 27 N.Y.2d 901, 317
N.Y.S.2d 371, 265 N.E.2d 779), to a position tan-
tamount to that of an advisory verdict (e.g., McK-
enna v. Meehan, 248 N.Y. 206, 214, 161 N.E. 472).
This came about when the parties, finding them-
selves in accord on most of the facts, mutually
agreed that the jury only be called upon to answer
four stipulated questions, and then, by the close of
the testimony, went on to further limit the jury's
scope by an understanding, as they read it into the
record, “that in applying the law to the facts for an
ultimate determination that the Court will consider
the stipulated set of facts which have been presen-
ted in writing by counsel, the resolution of the spe-
cific questions by the jury as submitted to the jury,
and counsel further stipulate that, if any other ne-
cessary fact is required to enable the proper applic-
ation of the law to the facts of this case and such
fact is not covered by either the stipulation of facts
of the parties or the finding of the jury, and if fur-
ther there is testimony in the record from which a
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 5
finding could be made or in testimony or evidence
of any kind from which a finding of such necessary
fact can be made, the parties do hereby authorize
the Court nonjury to make such determination as a
prerequisite to the application of the law”.
clear from the language it employed in disregarding
the verdict. For the only one of the four questions
FN6
of which the appellant complains, reads as fol-
lows: “Q. Did Con Edison act reasonably in reject-
ing the substitute shipment which was offered by
Joc Oil USA on February 21, 1974, for a scheduled
February 28, 1974 arrival?” “Jury-‘Yes' ”. And the
*581 court's words, in ruling, were: “The parties
formed this and the other submission to the jury
pursuant to their understanding that the factual ver-
dicts would be afforded any appropriate signific-
ance when thereafter the court applied the applic-
able law. It was clearly understood and agreed that
their mutually framed narrow factual questions
would be submitted to the jury without any refer-
ence to applicable provisions or requirements of the
Uniform Commercial Code, and that the court
would thereafter apply the law as mandated by the
code to all of the facts of the case. In accordance
with this agreed procedure no instruction or inform-
ation was given to the jury as to the rights or duties
of the parties under the statute * * * The jury find-
ing of reasonable rejection can have no meaning
without the necessary absent statutory frame of ref-
erence” ( 107 Misc.2d, at p. 385, 434 N.Y.S.2d 623
[emphasis added] ). The code reference in this
statement, as made clear in the extensive writing in
which the Trial Judge handed down his decision,
was to subdivision (2) of section 2-508. As ex-
plained in part II of this opinion, while a buyer's re-
jection of a nonconforming tender provides the oc-
casion for a seller's invocation of the statute, the
buyer's rejection is not conditioned by any require-
ment that it have been a reasonable or unreasonable
one. Rather, the word “reasonable” is employed
only to qualify a seller's conduct once the seller in-
vokes the statute. A finding by the jury, therefore,
that the buyer's conduct was reasonable was irrelev-
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
ant to the application of section 2-508. Con-
sequently, it was not error to ignore the jury's an-
swer to the question.
FN6. Of the four questions submitted to
the jury, two bear no relationship to the
theory on which the plaintiff succeeded,
and the third, likewise disregarded by the
trial court, supported the court's damages
disposition.
[2] As a final word on this issue, we also add that,
to the extent that Con Ed now belabors the trial
court for refusing to charge the provisions of subdi-
vision (2) of section 2-508, suffice it to say that,
since defense counsel did not join either in
plaintiff's request that the statute be read to the jury
or in the consequent exception to the court's refusal
to do so, the matter was not ***463 **937 pre-
served for our review ( Hunt v. Bankers & Shippers
Ins. Co. of N.Y., 50 N.Y.2d 938, 940, 431 N.Y.S.2d
454, 409 N.E.2d 928; CPLR 4017, 5501, subd. [a],
par. 3).
II
[3] We turn then to the central issue on this appeal:
Fairly interpreted, did subdivision *582(2) of sec-
tion 2-508 of the Uniform Commercial Code re-
quire Con Ed to accept the substitute shipment
plaintiff tendered? In approaching this question,
we, of course, must remember that a seller's right to
cure a defective tender, as allowed by both subdivi-
sions of section 2-508, was intended to act as a
meaningful limitation on the absolutism of the old
perfect tender rule, under which, no leeway being
allowed for any imperfections, there was, as one
court put it, just “no room * * * for the doctrine of
substantial performance” of commercial obligations
( Mitsubishi Goshi Kaisha v. Aron & Co., 16 F.2d
185, 186 [Learned Hand, J.]; see Note, Uniform
Commercial Code, § 2-508; Seller's Right to Cure
Non-Conforming Goods, 6 Rutgers-Camden L.J.
387-388).
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 6
[4] In contrast, to meet the realities of the more im-
personal business world of our day, the code, to
avoid sharp dealing, expressly provides for the lib-
eral construction of its remedial provisions (§
1-102) so that “good faith” and the “observance of
reasonable commercial standards of fair dealing” be
the rule rather than the exception in trade (see §
2-103, subd. [1], par. [b] ), “good faith” being
defined as “honesty in fact in the conduct or trans-
action concerned” (Uniform Commercial Code, §
1-201, subd. [19] ). As to section 2-508 in particu-
lar, the code's Official Comment advises that its
mission is to safeguard the seller “against surprise
as a result of sudden technicality on the buyer's
part” (Uniform Commercial Code, § 2-106, Com-
ment 2; see, also, Peters, Remedies for Breach of
Contracts Relating to the Sale of Goods under the
Uniform Commercial Code: A Roadmap for Article
Two, 73 Yale L.J. 199, 210; 51 N.Y.Jur., Sales, §
101, p. 41).
Section 2-508 may be conveniently divided
between provisions for cure offered when “the time
for performance has not yet expired” (subd. [1] ), a
precode concept in this State ( Lowinson v. New-
man, 201 App.Div. 266, 194 N.Y.S. 253), and ones
which, by newly introducing the possibility of a
seller obtaining “a further reasonable time to substi-
tute a conforming tender” (subd. [2] ), also permit
cure beyond the date set for performance. In its en-
tirety the section reads as follows:
“(1) Where any tender or delivery by the seller is
rejected because non-conforming and the time for
performance has not yet expired, the seller may sea-
sonably notify the buyer *583 of his intention to
cure and may then within the contract time make a
conforming delivery.
“(2) Where the buyer rejects a non-conforming
tender which the seller had reasonable grounds to
believe would be acceptable with or without money
allowance the seller may if he seasonably notifies
the buyer have a further reasonable time to substi-
tute a conforming tender.”
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
Since we here confront circumstances in which the
conforming tender came after the time of perform-
ance, we focus on subdivision (2). On its face, tak-
ing its conditions in the order in which they appear,
for the statute to apply (1) a buyer must have rejec-
ted a nonconforming tender, (2) the seller must
have had reasonable grounds to believe this tender
would be acceptable (with or without money allow-
ance), and (3) the seller must have “seasonably” no-
tified the buyer of the intention to substitute a con-
FN7
forming tender within a reasonable time.
FN7. Essentially a factual matter,
“seasonable” is defined in subdivision (3)
of section 1-204 of the Uniform Commer-
cial Code as “at or within the time agreed
or if no time is agreed at or within a reas-
onable time”. At least equally factual in
character, a “reasonable time” is left to de-
pend on the “nature, purpose and circum-
stances” of any action which is to be taken
(Uniform Commercial Code, § 1-204,
subd. [2] ).
In the present case, none of these presented a prob-
lem. The first one was ***464 **938 easily met for
it is unquestioned that, at .92%, the sulfur content
of theKhamsin oil did not conform to the .5% spe-
cified in the contract and that it was rejected by
Con Ed. The second, the reasonableness of the
seller's belief that the original tender would be ac-
ceptable, was supported not only by unimpeached
proof that the contract's .5% and the refinery certi-
ficate's .52% were trade equivalents, but by testi-
mony that, by the time the contract was made, the
plaintiff knew Con Ed burned fuel with a content of
up to 1%, so that, with appropriate price adjust-
ment, the Khamsin oil would have suited its needs
even if, at delivery, it was, to the plaintiff's sur-
prise, to test out at .92%. Further, the matter seems
to have been put beyond dispute by the defendant's
readiness to take the oil at the reduced market price
on February 20. Surely, on such a record, the trial
court cannot be faulted for having found as a fact
that the second condition too had been established.
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 7
*584 As to the third, the conforming state of the
Appollonian oil is undisputed, the offer to tender it
took place on February 21, only a day after Con Ed
finally had rejected the Khamsin delivery and the
Appollonian substitute then already was en route to
the United States, where it was expected in a week
and did arrive on March 4, only four days later than
expected. Especially since Con Ed pleaded no pre-
judice (unless the drop in prices could be so re-
garded), it is almost impossible, given the flexibil-
ity of the Uniform Commercial Code definitions of
“seasonable” and “reasonable” (n. 7, supra ), to
quarrel with the finding that the remaining require-
ments of the statute also had been met.
Thus lacking the support of the statute's literal lan-
guage, the defendant nonetheless would have us
limit its application to cases in which a seller know-
ingly makes a nonconforming tender which it has
reason to believe the buyer will accept. For this
proposition, it relies almost entirely on a critique in
Nordstrom, Law of Sales (§ 105), which rational-
izes that, since a seller who believes its tender is
conforming would have no reason to think in terms
of a reduction in the price of the goods, to allow
such a seller to cure after the time for performance
had passed would make the statutory reference to a
FN8
money allowance redundant. Nordstrom, inter-
estingly enough, finds it useful to buttress this posi-
tion by the somewhat dire prediction, though
backed by no empirical or other confirmation, that,
unless the right to cure is confined to those whose
nonconforming tenders are knowing ones, the in-
centive of sellers to timely deliver will be under-
mined. To this it also adds the somewhat moralistic
note that a seller who is mistaken as to the quality
of its goods does not merit *585 additional time
(Nordstrom, loc. cit.). Curiously, recognizing that
the few decisions extant on this subject have adop-
ted a position opposed to the one for which it con-
tends, Con Ed seeks to treat these as exceptions
rather than exemplars of the rule (e.g., Wilson v.
Scampoli, 228 A.2d 848 (D.C.App.) [goods ob-
tained by seller from their manufacturer in original
carton resold unopened to purchaser; seller held
443 N.E.2d 932
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)
within statute though it had no reason to believe the
goods defective]; Appleton State Bank v. Lee, 33
Wis.2d 690, 148 N.W.2d 1 [seller mistakenly de-
livered sewing machine of wrong brand but other-
wise identical to one sold; held that seller, though it
did not know of its mistake, had a right to cure by
FN9
substitution] ).
FN8. The premise for such an argument,
which ignores the policy of the code to
prevent buyers from using insubstantial re-
mediable or price adjustable defects to free
themselves from unprofitable bargains
(Hawkland, Sales and Bulk Sales Under
the Uniform Commercial Code, pp.
120-122), is that the words “with or
without money allowance” apply only to
sellers who believe their goods will be ac-
ceptable with such an allowance and not to
sellers who believe their goods will be ac-
ceptable without such an allowance. But,
since the words are part of a phrase which
speaks of an otherwise unqualified belief
that the goods will be acceptable, unless
one strains for an opposite interpretation,
we find insufficient reason to doubt that it
intends to include both those who find a
need to offer an allowance and those who
do not.
FN9. The only New York case to deal with
this section involved a seller who know-
ingly tendered a “newer and improved ver-
sion of the model that was actually
ordered” on the contract delivery date. The
court held he had reasonable grounds to
believe the buyer would accept the newer
model ( Bartus v. Riccardi, 55 Misc.2d 3,
284 N.Y.S.2d 222 [Utica City Ct., Hymes,
J.] ).
***465 **939 That the principle for which these
cases stand goes far beyond their particular facts
cannot be gainsaid. These holdings demonstrate
that, in dealing with the application of subdivision
(2) of section 2-508, courts have been concerned
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 8
with the reasonableness of the seller's belief that the
goods would be acceptable rather than with the
seller's pretender knowledge or lack of knowledge
of the defect (Wilson v. Scampoli, supra; compare
Zabriskie Chevrolet v. Smith, 99 N.J.Super. 441,
240 A.2d 195).
It also is no surprise then that the afore-mentioned
decisional history is a reflection of the mainstream
of scholarly commentary on the subject (e.g., 1955
Report of N.Y.Law Rev.Comm., p. 484; White &
Summers, Uniform Commercial Code [2d ed.], §
8-4, p. 322; 2 Anderson, Uniform Commercial
Code [2d ed.], § 2-508:7; Hogan, The Highways
and Some of the Byways in the Sales and Bulk
Sales Articles of the Uniform Commercial Code, 48
Cornell L.Q. 1, 12-13; Note, Uniform Commercial
Code, § 2-508: Seller's Right to Cure Non-
Conforming Goods, 6 Rutgers-Camden L.J. 387,
399; Note, Commercial Law-The Effect of the
Seller's Right to Cure on the Buyer's Remedy of
Rescission, 28 Ark.L.Rev. 297, 302-303).
[5][6] *586 White and Summers, for instance, put it
well, and bluntly. Stressing that the code intended
cure to be “a remedy which should be carefully cul-
tivated and developed by the courts” because it
“offers the possibility of conforming the law to
reasonable expectations and of thwarting the chisel-
er who seeks to escape from a bad bargain” (op.
cit., at pp. 322-324), the authors conclude, as do
we, that a seller should have recourse to the relief
afforded by subdivision (2) of section 2-508 of the
Uniform Commercial Code as long as it can estab-
lish that it had reasonable grounds, tested object-
ively, for its belief that the goods would be accep-
ted (ibid., at p 321). It goes without saying that the
test of reasonableness, in this context, must encom-
pass the concepts of “good faith” and “commercial
standards of fair dealing” which permeate the code
(Uniform Commercial Code, § 1-201, subd. [19];
FN10
§§ 1-203, 2-103, subd. [1], par. [b] ).
FN10. Except indirectly, on this appeal we
do not deal with the equally important pro-
tections the code affords buyers. It is as to
443 N.E.2d 932 Page 9
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458, 36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
(Cite as: 57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458)

buyers as well as sellers that the code, to
the extent that it displaces traditional prin-
ciples of law and equity (§ 1-103), seeks to
discourage unfair or hypertechnical busi-
ness conduct bespeaking a dog-eat-dog
rather than a live-and-let-live approach to
the marketplace (e.g., §§ 2-314, 2-315,
2-513, 2-601, 2-608). Overall, the aim is to
encourage parties to amicably resolve their
own problems ( Ramirez v. Autosport, 88
N.J. 277, 285, 440 A.2d 1345; compare
Restatement, Contracts 2d, Introductory
Note to chapter 10, p 194 [“the wisest
course is ordinarily for the parties to at-
tempt to resolve their differences by nego-
tiations, including clarification of expecta-
tions [and] cure of past defaults”] ).
Chaddock, 135 N.Y. 116, 123, 31 N.E. 997; 10 Car-
mody-Wait 2d, N.Y.Prac., § 70:419, p. 690).
For all these reasons, the order of the Appellate Di-
vision should be affirmed, with costs.
COOKE, C.J., and JASEN, GABRIELLI, JONES,
WACHTLER and MEYER, JJ., concur.
Order affirmed.
N.Y.,1982.
T.W. Oil, Inc. v. Consolidated Edison Co. of New
York, Inc.
57 N.Y.2d 574, 443 N.E.2d 932, 457 N.Y.S.2d 458,
36 A.L.R.4th 533, 35 UCC Rep.Serv. 12
END OF DOCUMENT

[7] As to the damages issue raised by the defendant,

we affirm without reaching the merits. At no stage
of the proceedings before the trial court did the de-
fendant object to the plaintiff's proposed method for
their calculation, and this though the plaintiff gave
ample notice of that proposal by means of a prelim-
inary statement and pretrial memorandum filed with
the court. So complete was defendant's acquies-
cence in the theory thus advanced that the plaintiff
was permitted to introduce its proof of the Khamsin
resale alone, and without opposition. Furthermore,
in consensually submitting the four jointly framed
advisory questions that went to the jury, the lan-
guage of one of them, which was damages-related,
indicates that both parties were *587 acting on the
assumption that the Khamsin oil was the one with
which the court was to be concerned. And, even
after the decision at nisi prius revealed that the
Judge had acted on such an assumption, so far as
the record shows, no motion was ever made to cor-
rect it.

[8] It has long been the law that agreement on a

theory of damages at trial, even if only implied,
must control on appeal (see ***466**940Martin v.
City of Cohoes, 37 N.Y.2d 162, 165-166, 371
N.Y.S.2d 687, 332 N.E.2d 867, supra; Hartshorn v.

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.