CO Code § 4-2-511 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 2 - Sales|Part 5 - Performance|§ 4-2-511. Tender of Payment by Buyer; Payment by Check; Certification of Payment in Livestock Transactions

  Unless otherwise agreed, tender of payment is a condition to the seller's duty to tender and complete any delivery.    Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business, unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it.    Subject to the provisions of this chapter on the effect of an instrument on an obligation (section 4-3-310), payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.      When livestock have been delivered under a transaction of purchase and on the accompanying brand inspection certificate or memorandum of brand inspection certificate the seller has conspicuously noted that payment of the consideration for the transaction has not been received, the seller shall send a certificate of payment stating that payment has been made either within ten days after receipt of a check drawn and payable within the United States or, in any other case, within three business days after payment has been made. (4) (a) When livestock have been delivered under a transaction of purchase and on the accompanying brand inspection certificate or memorandum of brand inspection certificate the seller has conspicuously noted that payment of the consideration for the transaction has not been received, the seller shall send a certificate of payment stating that payment has been made either within ten days after receipt of a check drawn and payable within the United States or, in any other case, within three business days after payment has been made.    Unless otherwise agreed, when payment has been made, the buyer shall have a specifically enforceable right to the unqualified certification of payment from the seller and, where the seller has failed to provide the certification of payment in accordance with the provisions of this subsection (4), the seller will be deemed to have failed to make delivery of the livestock.         History. Source: L. 65: P. 1326, § 1. C.R.S. 1963: § 155-2-511. L. 75: (4) added, p. 233, § 4, effective June 20. L. 94: (3) amended, p. 905, § 5, effective January 1, 1995. History. Source: L. 65: P. 1326, § 1. C.R.S. 1963: § 155-2-511. L. 75: (4) added, p. 233, § 4, effective June 20. L. 94: (3) amended, p. 905, § 5, effective January 1, 1995.    Editor's note - Colorado legislative change: Colorado added subsection (4). There is no counterpart to subsection (4) in the uniform act.   OFFICIAL COMMENT   Prior Uniform Statutory Provision: Section 42, Uniform Sales Act.   Changes: Rewritten by this section and Section 2-507.   Purposes of Changes:   1. The requirement of payment against delivery in subsection (1) is applicable to non-commercial sales generally and to ordinary sales at retail although it has no application to the great body of commercial contracts which carry credit terms. Subsection (1) applies also to documentary contracts in general and to contracts which look to shipment by the seller but contain no term on time and manner of payment, in which situations the payment may, in proper case, be demanded against delivery of appropriate documents.   In the case of specific transactions such as C.O.D. sales or agreements providing for payment against documents, the provisions of this subsection must be considered in conjunction with the special sections of the Article dealing with such terms. The provision that tender of payment is a condition to the seller's duty to tender and complete “any delivery” integrates this section with the language and policy of the section on delivery in several lots which call for separate payment. Finally, attention should be directed to the provision on right to adequate assurance of performance which recognizes, even before the time for tender, an obligation on the buyer not to impair the seller's expectation of receiving payment in due course.   2. Unless there is agreement otherwise the concurrence of the conditions as to tender of payment and tender of delivery requires their performance at a single place or time. This Article determines that place and time by determining in various other sections the place and time for tender of delivery under various circumstances and in particular types of transactions. The sections dealing with time and place of delivery together with the section on right to inspection of goods answer the subsidiary question as to when payment may be demanded before inspection by the buyer.   3. The essence of the principle involved in subsection (2) is avoidance of commercial surprise at the time of performance. The section on substituted performance covers the peculiar case in which legal tender is not available to the commercial community.   4. Subsection (3) is concerned with the rights and obligations as between the parties to a sales transaction when payment is made by check. This Article recognizes that the taking of a seemingly solvent party's check is commercially normal and proper and, if due diligence is exercised in collection, is not to be penalized in any way. The conditional character of the payment under this section refers only to the effect of the transaction “as between the parties” thereto and does not purport to cut into the law of “absolute” and “conditional” payment as applied to such other problems as the discharge of sureties or the responsibilities of a drawee bank which is at the same time an agent for collection.   The phrase “by check” includes not only the buyer's own but any check which does not effect a discharge under Article 3 (Section 3-802). Similarly the reason of this subsection should apply and the same result should be reached where the buyer “pays” by sight draft on a commercial firm which is financing him.   5. Under subsection (3) payment by check is defeated if it is not honored upon due presentment. This corresponds to the provisions of article on Commercial Paper. (Section 3-802). But if the seller procures certification of the check instead of cashing it, the buyer is discharged. (Section 3-411).   6. Where the instrument offered by the buyer is not a payment but a credit instrument such as a note or a check post-dated by even one day, the seller's acceptance of the instrument insofar as third parties are concerned, amounts to a delivery on credit and his remedies are set forth in the section on buyer's insolvency. As between the buyer and the seller, however, the matter turns on the present subsection and the section on conditional delivery and subsequent dishonor of the instrument gives the seller rights on it as well as for breach of the contract for sale.   Cross References:   Point 1: Sections 4-2-307 , 4-2-310 , 4-2-320 , 4-2-325 , 4-2-503 , 4-2-513 and 4-2-609 .   Point 2: Sections 4-2-307 , 4-2-310 , 4-2-319 , 4-2-322 , 4-2-503 , 4-2-504 and 4-2-513 .   Point 3: Section 4-2-614 .   Point 5: Article 3, esp. Sections 3-802 and 4-3-411 .   Point 6: Sections 4-2-507 , 4-2-702 , and Article 3.   Definitional Cross References:   “Buyer”. Section 4-2-103 .   “Check”. Section 4-3-104 .   “Dishonor”. Section 4-3-502 .   “Party”. Section 4-1-201 .   “Reasonable time”. Section 4-1-204 .   “Seller”. Section 4-2-103 .   ANNOTATION   Purchaser receives voidable title when he pays by check. Under the UCC, the purchaser of goods in a cash sale transaction normally acquires full title to the goods which he purchases after payment is made, but the purchaser is limited to receiving a voidable title when the purchase price is conveyed in the form of a check. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166 , 519 P.2d 354.   Payment by check is conditional upon the check being honored at presentment. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 32 Colo. App. 235, 511 P.2d 912 (1973), aff'd, 184 Colo. 166 , 519 P.2d 354 (1974).   Payment by check is only conditional and is defeated by dishonor of the check on due presentment. Ranchers & Farmers Livestock Auction Co. v. Honey, 38 Colo. App. 69, 552 P.2d 313, cert. dismissed, 191 Colo. 503 , 553 P.2d 799 (1976).   Payment by check is conditional only and does not discharge the liability for which payment is given, unless there is an express or implied agreement that the check be accepted as absolute payment. Bolz v. Sec. Mut. Life Ins. Co., 721 P.2d 1216 (Colo. App. 1986).   Such title dependent upon seller's power to transfer an interest in goods. The voidable title which a purchaser receives when payment is made by check is dependent upon the seller's power to transfer an interest in the goods conveyed. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166 , 519 P.2d 354 (1974).   Purchaser took voidable title on proper transfer of title certificates. Where before the seller presented the purchaser's check for collection, the certificates of title to automobiles were delivered to a bank as security for the bank's loan to the purchaser, in accordance with a security agreement between the purchaser and bank, it could be implied that the bank took possession of the certificates of title as the purchaser's agent. At the moment the seller delivered the certificates of title to the purchaser, through the bank as its agent, the requirements of § 42-6-108 were satisfied. Moreover, once the certificates of title were properly transferred, the purchaser was clothed with voidable title and could legally encumber the automobiles. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166 , 519 P.2d 354 (1974).