CO Code § 4-2-607 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 2 - Sales|Part 6 - Breach, Repudiation, and Excuse|§ 4-2-607. Effect of Acceptance - Notice of Breach - Burden of Establishing Breach After Acceptance - Notice of Claim or Litigation to Person Answerable Over

  The buyer must pay at the contract rate for any goods accepted.    Acceptance of goods by the buyer precludes rejection of the goods accepted and, if made with knowledge of a nonconformity, cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured; but acceptance does not of itself impair any other remedy provided by this article for nonconformity.    Where a tender has been accepted:   The buyer must within a reasonable time after he discovers or should have discovered any breach, notify the seller of breach or be barred from any remedy; and    If the claim is one for infringement or the like (subsection (3) of section 4-2-312) and the buyer is sued as a result of such a breach, he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.       The burden is on the buyer to establish any breach with respect to the goods accepted.    Where the buyer is sued for breach of a warranty or other obligation for which his seller is answerable over:   He may give his seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so he will be bound in any action against him by his buyer by any determination of fact common to the two litigations, then unless the seller after seasonable receipt of the notice does come in and defend, he is so bound.    If the claim is one for infringement or the like (subsection (3) of section 4-2-312), the original seller may demand in writing that his buyer turn over to him control of the litigation including settlement or be barred from any remedy over and if he also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt of the demand does turn over control, the buyer is so barred.       The provisions of subsections (3), (4), and (5) of this section apply to any obligation of a buyer to hold the seller harmless against infringement or the like (subsection (3) of section 4-2-312).     History. Source: L. 65: P. 1329, § 1. C.R.S. 1963: § 155-2-607. History. Source: L. 65: P. 1329, § 1. C.R.S. 1963: § 155-2-607.    OFFICIAL COMMENT   Prior Uniform Statutory Provision: Subsection (1) — Section 41, Uniform Sales Act; Subsections (2) and (3) — Sections 49 and 69, Uniform Sales Act.   Changes: Rewritten.   Purposes of Changes: To continue the prior basic policies with respect to acceptance of goods while making a number of minor though material changes in the interest of simplicity and commercial convenience so that:   1. Under subsection (1), once the buyer accepts a tender the seller acquires a right to its price on the contract terms. In cases of partial acceptance, the price of any part accepted is, if possible, to be reasonably apportioned, using the type of apportionment familiar to the courts in quantum valebat cases, to be determined in terms of “the contract rate,” which is the rate determined from the bargain in fact (the agreement) after the rules and policies of this Article have been brought to bear.   2. Under subsection (2) acceptance of goods precludes their subsequent rejection. Any return of the goods thereafter must be by way of revocation of acceptance under the next section. Revocation is unavailable for a non-conformity known to the buyer at the time of acceptance, except where the buyer has accepted on the reasonable assumption that the non-conformity would be seasonably cured.   3. All other remedies of the buyer remain unimpaired under subsection (2). This is intended to include the buyer's full rights with respect to future installments despite his acceptance of any earlier non-conforming installment.   4. The time of notification is to be determined by applying commercial standards to a merchant buyer. “A reasonable time” for notification from a retail consumer is to be judged by different standards so that in his case it will be extended, for the rule of requiring notification is designed to defeat commercial bad faith, not to deprive a good faith consumer of his remedy.   The content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched. There is no reason to require that the notification which saves the buyer's rights under this section must include a clear statement of all the objections that will be relied on by the buyer, as under the section covering statements of defects upon rejection (Section 2-605). Nor is there reason for requiring the notification to be a claim for damages or of any threatened litigation or other resort to a remedy. The notification which saves the buyer's rights under this Article need only be such as informs the seller that the transaction is claimed to involve a breach, and thus opens the way for normal settlement through negotiation.   5. Under this Article various beneficiaries are given rights for injuries sustained by them because of the seller's breach of warranty. Such a beneficiary does not fall within the reason of the present section in regard to discovery of defects and the giving of notice within a reasonable time after acceptance, since he has nothing to do with acceptance. However, the reason of this section does extend to requiring the beneficiary to notify the seller that an injury has occurred. What is said above, with regard to the extended time for reasonable notification from the lay consumer after the injury is also applicable here; but even a beneficiary can be properly held to the use of good faith in notifying, once he has had time to become aware of the legal situation.   6. Subsection (4) unambiguously places the burden of proof to establish breach on the buyer after acceptance. However, this rule becomes one purely of procedure when the tender accepted was non-conforming and the buyer has given the seller notice of breach under subsection (3). For subsection (2) makes it clear that acceptance leaves unimpaired the buyer's right to be made whole, and that right can be exercised by the buyer not only by way of cross-claim for damages, but also by way of recoupment in diminution or extinction of the price.   7. Subsections (3)(b) and (5)(b) give a warrantor against infringement an opportunity to defend or compromise third-party claims or be relieved of his liability. Subsection (5)(a) codifies for all warranties the practice of voucher to defend. Compare Section 3-803. Subsection (6) makes these provisions applicable to the buyer's liability for infringement under Section 2-312.   8. All of the provisions of the present section are subject to any explicit reservation of rights.   Cross References:   Point 1: Section 4-1-201 .   Point 2: Section 4-2-608 .   Point 4: Sections 4-1-204 and 4-2-605 .   Point 5: Section 4-2-318 .   Point 6: Section 4-2-717 .   Point 7: Sections 4-2-312 and 3-803.   Point 8: Section 4-1-207 .   Definitional Cross References:   “Burden of establishing”. Section 4-1-201 .   “Buyer”. Section 4-2-103 .   “Conform”. Section 4-2-106 .   “Contract”. Section 4-1-201 .   “Goods”. Section 4-2-105 .   “Notifies”. Section 4-1-201 .   “Reasonable time”. Section 4-1-204 .   “Remedy”. Section 4-1-201 .   “Seasonably”. Section 4-1-204 .   ANNOTATION   Annotator's note. Since § 4-2-607 is similar to repealed § 121-1-49, CRS 53, and CSA, C. 143A, § 49 (uniform sales act), relevant cases construing this provision have been included in the annotations to this section. Annotator's note. Since § 4-2-607 is similar to repealed § 121-1-49, CRS 53, and CSA, C. 143A, § 49 (uniform sales act), relevant cases construing this provision have been included in the annotations to this section.   The giving of notice is a condition precedent to a buyer's right to recover for any claimed damage. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ); Hoffman's Double Bar Pine Nursery v. Fyke, 633 P.2d 516 (Colo. App. 1981); Palmer v. A.H. Robins Co., Inc., 684 P.2d 187 (Colo. 1984).   Notice of breach of warranty is in the nature of a condition precedent to recovery, and generally no remedy is available to the buyer unless notice is given. Rich's Restaurant, Inc. v. McFann Enters., Inc., 39 Colo. App. 545, 570 P.2d 1305 .   Failure to notify seller until after the goods are sold effectively prevents seller from investigating and attempting to cure the alleged defect in the goods. White v. Miss. Order Buyers, Inc., 648 P.2d 682 (Colo. App. 1982).   Failure to notify seller results in dismissal of breach of warranty claims as a matter of law. Schultz v. Linden-Alimak, Inc., 734 P.2d 146 (Colo. App. 1986).   Whether the notice was given within a reasonable time is a question of fact to be measured by all the circumstances of the case. White v. Miss. Order Buyers, Inc., 648 P.2d 682 (Colo. App. 1982).   Notice must be within a reasonable time after acceptance. This section provides that if, after acceptance of the goods, the buyer fails to give notice to the seller of the breach of any warranty within a reasonable time when the buyer knows of the breach, the seller shall not be liable therefor. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   The determination of what is a reasonable time for notice of breach depends on the circumstances of each case. Fiberglass Component Prod. v. Reichhold Chems., Inc., 983 F. Supp. 948 (D. Colo. 1997 ).   The giving of notice may not be after repeated written promises to pay over period of time. Where a purchaser of goods accepts delivery and, after full knowledge of the quality thereof, repeatedly makes written unqualified promises to pay the contract price, which promises continue over a period of time, such a purchaser cannot thereafter be heard to claim damage for late delivery or for breach of warranty as to quality. E. J. Scarry & Co. v. Paper Prods. Co., 122 Colo. 589 , 224 P.2d 940 (1950) (period of 90 days); Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ); Cooley v. Big Horn Harvestore Sys., 813 P.2d 736 (Colo. 1991).   There is danger of fraud and false claims even where there is an express warranty, when notice is not early given of the defect; it leads the buyer into temptation. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   Notice requirement of subsection (3)(a) serves three purposes: It provides the seller with an opportunity to correct any defect, to prepare for negotiation and litigation, and to protect itself against stale claims asserted after it is too late for the seller to investigate them. White v. Miss. Order Buyers, Inc., 648 P.2d 682 (Colo. App. 1982); Palmer v. A.H. Robins Co., Inc., 684 P.2d 187 (Colo. 1984); Fiberglass Component Prod. v. Reichhold Chems., Inc., 983 F. Supp. 948 (D. Colo. 1997 ).   The entire purpose of giving notice is to protect the seller; to give him an opportunity to check the complaints. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   The basis for the requirement of notice is to provide an opportunity for the seller to determine whether there is a shortage, to correct the defect, or to effect settlement through negotiation. Rich's Restaurant, Inc. v. McFann Enters., Inc., 39 Colo. App. 545, 570 P.2d 1305 (1977).   In the law governing breach of warranty, the notice requirement serves three useful purposes: First, notice provides the seller a chance to correct any defect; second, notice affords the seller an opportunity to prepare for negotiation and litigation; and third, notice provides the seller a safeguard against stale claims being asserted after it is too late for the manufacturer or seller to investigate them. Prutch v. Ford Motor Co., 618 P.2d 657 (Colo. 1980).   Fairness requires that a buyer should inform the seller if he considers the contract breached and wishes to preserve any remedies; such notice informs the seller the transaction is troublesome and provides him the opportunity to settle the dispute through negotiations. MacGregor v. McReki, Inc., 30 Colo. App. 196, 494 P.2d 1297 (1971).   The buyer has the burden of proof of establishing the fact that notice of a breach of warranty was given to the seller within a reasonable time after he knew, or should have known, that performance of the seller was objectionable. E. J. Scarry & Co. v. Paper Prods. Co., 122 Colo. 589 , 224 P.2d 940 (1950); Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   The buyer has the burden of proof that the notice was given within a reasonable time. White v. Miss. Order Buyers, Inc., 648 P.2d 682 (Colo. App. 1982).   There is adequate and timely notice of the breach where the seller is contacted immediately after an item is installed and told that it is not working. Irrigation Motor & Pump Co. v. Belcher, 29 Colo. App. 343, 483 P.2d 980 (1971).   Where there is no suggestion that the seller suffered any prejudice as a result of not being notified of a breach of warranty at an earlier date, the harsh rule of forfeiture should not be applied. Schlottman v. Pressey, 195 F.2d 343 (10th Cir. 1952).   Notice of breach due to late delivery given prior to delivery is sufficient to preserve the buyer's remedies, and a second notice after acceptance of delivery is not required under the uniform commercial code. This construction best effectuates the purpose of § 4-2-607 and the general obligation of good faith which the uniform commercial code imposes upon the performance and enforcement of contracts in § 4-1-203 . MacGregor v. McReki, Inc., 30 Colo. App. 196, 494 P.2d 1297 (1971).   This section does not prescribe the kind or the form of the notice. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   There is no requirement that the notice be formal. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   Communication of defects and of recourse to attorney suffices. Although a formal notice was not given, where the buyer communicated with the seller and notified him of the defects in the goods and the seller acquired firsthand knowledge, the seller could scarcely have concluded that these were mere protests in view of the fact that the buyer had told him that the matter was in the hands of his attorney. Comet Indus., Inc. v. Best Plastic Container Corp., 222 F. Supp. 723 (D. Colo. 1963 ).   Where buyer relied on filing of lawsuit for notice to seller under subsection (3)(a), it was error for court to grant seller's motion for summary judgment where federal food and drug administration had sought to ban sale of product and press releases on problems with the product had been issued. Wallman v. Kelley, 976 P.2d 330 (Colo. App. 1998).   There is a distinction between notice of breach under § 4-2-607 (3) and notice of revocation of acceptance under § 4-2-608 (2) . Irrigation Motor & Pump Co. v. Belcher, 29 Colo. App. 343, 483 P.2d 980 (1971).   Burden on buyer to prove defects existed at time of sale. The burden is on the buyer seeking to recover damages for defects in quality, or setting up such defects as an affirmative defense in an action for the price, to prove that the defects existed at the time of sale and did not result from deterioration after shipment or from the buyer's negligence after he came into possession of the property, since there is no presumption that the defects discovered after delivery existed at the time of sale. Vanadium Corp. of Am. v. Wesco Stores Co., 135 Colo. 77 , 308 P.2d 1011 (1957).   Where seller may have indirect notice of claim, trial court erred in finding, as a matter of law, that delay in giving notice of breach of warranty was unreasonable. Cheyenne Mtn. Bank v. Whetstone, 787 P.2d 210 (Colo. App. 1990).   There is no statutorily prescribed format for notice of breach. Hoffman's Double Bar Pine Nursery v. Fyke, 633 P.2d 516 (Colo. App. 1981); Palmer v. A.H. Robins Co., Inc., 684 P.2d 187 (Colo. 1984); Hawkinson v. A.H. Robins Co., Inc., 595 F. Supp. 1290 (D. Colo. 1984 ).   Subsection (3)(a) requires notice adequate to permit cure. Hoffman's Double Bar Pine Nursery v. Fyke, 633 P.2d 516 (Colo. App. 1981).   Adequacy of notice is question of fact. Hoffman's Double Bar Pine Nursery v. Fyke, 633 P.2d 516 (Colo. App. 1981); Int'l Tech. Instruments v. Eng'g Measurements, Inc., 678 P.2d 558 (Colo. App. 1983).   Where seller may have indirect notice of claim, trial court erred in finding, as a matter of law, that delay in giving notice of breach of warranty was unreasonable. Cheyenne Mtn. Bank v. Whetstone, 787 P.2d 210 (Colo. App. 1990).   Notice of breach of warranty to remote manufacturer not a condition precedent to purchaser's initiation of litigation against such manufacturer. Cooley v. Big Horn Harvestore Sys., 813 P.2d 736 (Colo. 1991).   Word “seller”, as used in subsection (3)(a), construed to refer only to the immediate seller who tendered the goods to the buyer. So long as buyer has given notice of the defect to his immediate seller, no further notification to those distributors beyond the immediate seller is required. Palmer v. A.H. Robins Co., Inc., 684 P.2d 187 (Colo. 1984).   Timely notice of the breach to the immediate seller is all that is required. Separate notice to the seller's supplier or the manufacturer is not necessary. Hawkinson v. A.H. Robins Co., Inc., 595 F. Supp. 1290 (D. Colo. 1984 ).   Notice of breach given by buyer complied with time parameters of contract notice provision . Myers v. Koop, 757 P.2d 162 (Colo. App. 1988).   Patient gave sufficient notice to physician of defective character of product and such notice “came to the attention” of the physician within the meaning of § 4-1-201 (26) , when the patient presented herself to the physician in a life-threatening condition. Palmer v. A.H. Robins Co. Inc., 684 P.2d 187 (Colo. 1984); Hawkinson v. A.H. Robins Co., Inc., 595 F. Supp. 1290 (D. Colo. 1984 ).   Notice provision not technical procedural barrier to litigation. When the purposes of the notice requirement have been fully served by actual notice, the notice provision should not operate as a technical procedural barrier to deny claimants the opportunity to litigate the case on the merits. Prutch v. Ford Motor Co., 618 P.2d 657 (Colo. 1980).   Notice of breach is legally sufficient when it provides the seller with an opportunity to investigate the buyer's complaint, to correct the alleged defect, or to effect a settlement through negotiation. Int'l Tech. Instruments v. Eng'g Measurements, Inc., 678 P.2d 558 (Colo. App. 1983).   Failure to provide adequate security agreement constitutes breach. Where the failure of the seller to provide a proper and adequate security agreement directly caused the unconscionable delay in buyer's acquiring titles for vehicles sold, this constituted a breach of the sales contract. Eccher v. Small Bus. Admin., 643 F.2d 1388 (10th Cir. 1981).   Statute as basis for jurisdiction. See Stroh v. Am. Recreation & Mobile Home Corp., 35 Colo. App. 129, 574 P.2d 102 (1977).   Applied in Four Sons Bakery v. Dulman, 542 F.2d 829 (10th Cir. 1976); Surplus Elecs. Corp. v. Gallin, 653 P.2d 752 (Colo. App. 1982).