Television Corp. v. Neuman, 48 A.D.2d 148 (N.Y. App. Div. 1975)

Under UCC § 2-610, a buyer’s anticipatory repudiation of a contract for the sale of goods excuses the seller from the obligation to tender delivery of the goods.

Summary

Television Corporation sued Carl Neuman for breach of contract after Neuman refused to accept delivery of television sets that he had agreed to lease. Neuman argued that Television Corporation had failed to tender delivery as required by the Uniform Commercial Code. The New York Appellate Division held that Television Corporation was not required to tender delivery because Neuman had anticipatorily repudiated the contract by informing Television Corporation that the sets were no longer needed. The Court of Appeals reversed the Appellate Division’s dismissal of the complaint and reinstated the trial court’s judgment for Television Corporation.

Facts

Television Corporation agreed to lease television sets to James Square Nursing Home, a trade name for Carl Neuman. The agreements included an option for Neuman to purchase the sets for one dollar each at the end of the lease term. The agreements stipulated that Television Corporation would not file UCC-1 forms related to the transaction. Television Corporation requested Neuman to execute UCC-1 forms, which he refused. Television Corporation then attempted to deliver the televisions, but Neuman’s representatives informed them that the sets were not needed and delivery would not be accepted. Television Corporation never physically tendered the sets.

Procedural History

Television Corporation sued Neuman for breach of contract. The trial court found that Television Corporation had tendered delivery and allowed recovery for a portion of the sets. Neuman’s counterclaim was dismissed. The Appellate Division reversed, finding that Television Corporation failed to prove it could supply the goods without secondary financing and charged Television Corporation with breach, remanding for a hearing on Neuman’s damages. Television Corporation appealed to the New York Court of Appeals.

Issue(s)

Whether a buyer’s communication that goods are no longer needed and that delivery will not be accepted constitutes an anticipatory repudiation of the contract, excusing the seller from the obligation to tender delivery under the Uniform Commercial Code.

Holding

Yes, because the buyer, Neuman, communicated a clear and unequivocal intention not to perform the contract, relieving the seller, Television Corporation, of its obligation to tender delivery.

Court’s Reasoning

The court reasoned that under UCC § 2-610(c), repudiation of a contract by the buyer eliminates the need for further performance by the seller. An anticipatory repudiation occurs when there is an “overt communication of intention” not to perform. The court found that Neuman’s communication, through his agents, that the sets were no longer needed and would not be accepted, constituted a clear and unequivocal repudiation of the contract. The court emphasized that the trial court had expressly credited the testimony regarding these communications. The court stated that “the repudiation was more than amply demonstrated by the communication to plaintiff by an administrator and a purchasing agent of defendant nursing home that the sets were no longer needed and that delivery would not be accepted.” Because of this repudiation, Television Corporation was not obligated to make a formal tender of the goods. The court cited pre-UCC cases like Windmuller v. Pope, 107 N.Y. 674 and Nichols v. Scranton Steel Co., 137 N.Y. 471 to reinforce the principle that a seller is relieved of the obligation to tender when the buyer states they will not receive or pay for the goods. The court noted it could not grant greater relief to the plaintiff than the trial court had because the plaintiff had not appealed the limitation on damages to the Appellate Division.