Opinion ID: 1259915
Heading Depth: 1
Heading Rank: 4

Heading: ucc section 1-207

Text: Finally, AVL urges this court to apply UCC § 1-207, AS 45.01.207, to this transaction. It is argued that under section 1-207, tender of part payment in satisfaction of a debt does not bind the acceptor who expressly reserves his rights. The cases and commentators disagree as to whether section 1-207 changes the common law of accord and satisfaction. The authorities are collected in Kelly v. Kowalsky, 186 Conn. 618, 442 A.2d 1355, 1357 n. 3 (1982). We hold that AS 45.01.207 does not preclude summary judgment in Keystone's favor for two reasons. [4] First, we are persuaded by those cases representing the majority of jurisdictions that have considered the issue, which hold that section 1-207 does not alter the common law rules regarding accord and satisfaction by tender of a full payment check, and which limit section 1-207 to continuing disputes on executory contracts. See, e.g., Milgram Food Stores, Inc. v. Gelco Corp., 550 F. Supp. 992, 996-97 (W.D.Mo. 1982); Chancellor Inc. v. Hamilton Appliance Co., Inc., 175 N.J. Super. 345, 418 A.2d 1326, 1330 (1980); Brown v. Coastal Truckways, Inc., 44 N.C. App. 454, 261 S.E.2d 266, 269 (1980); State Department of Fisheries v. J-Z Sales Corp., 25 Wash. App. 671, 610 P.2d 390, 395-96 (1980); Jahn v. Burns, 593 P.2d 828, 830 (Wyo. 1979). See also Corbin on Contracts § 1279(C) at 395-98 (Kaufmann Supp. 1982); Rosenthal, Discord and Dissatisfaction: Section 1-207 of the Uniform Commercial Code, 78 Colum.L. Rev. 48, 70 (1978). Alternatively, we hold that if section 1-207 does apply to an accord and satisfaction, AVL's attempted reservation of rights failed to comply with that section which requires an explicit reservation of rights. To be explicit the reservation must be express. Here no reservation was attached to the check at the time it was cashed. AVL merely sent a letter subsequent to cashing the check purporting to reserve rights. More significantly, the letter did not reach Keystone until after the check had been cashed. Keystone never had the opportunity to consider whether to accept AVL's decision or stop payment on the check once AVL declined to accept the check in full satisfaction of the debt. See Kelly v. Kowalsky, 186 Conn. 618, 442 A.2d 1355 (1982). Under these circumstances we find that AVL failed to comply with UCC section 1-207. See Caraballo, The Tender Trap: U.C.C. § 1-207 and Its Applicability to An Attempted Accord and Satisfaction by Tendering a Check in a Dispute Arising from a Sale of Goods, 11 Seton Hall L.Rev. 445, 455-58 (1980). [5] For the above stated reasons the decision of the superior court is AFFIRMED. MOORE, J., not participating.