Avoiding the § 2-607(3)(A) Notice Trap: Reworking the Notice Requirement to the Third Party Manufacturer of Goods

When a buyer accepts non-conforming goods, UCC § 2-607(3)(a) requires the buyer to notify the seller of the non-conformity within a reasonable time after the buyer discovers, or should have discovered, the breach. Failure to give notice bars the buyer from recovering any remedy under the UCC. A special problem arises when a manufacturer supplies goods to a retailer, who in turns sells the goods to the end buyer. In a buyer action against the manufacturer, the issue often arises whether § 2-607(3)(a) requires the buyer to give notice of breach to the manufacturer, or whether notice to the retailer is all the UCC requires. Jurisdictions currently split regarding whether the notice requirement of § 2-607(3)(a) extends to third-party manufacturers. The majority of jurisdictions addressing the issue hold notification to the retailer sufficient against both the retailer and manufacturer. These courts emphasize the section‘s language, which states that only the seller need receive timely notification of breach. A minority of courts hold that the buyer must give the manufacturer direct notice of the breach claim. Even actual notice of defects from the retailer, in this context, could be held insufficient if the buyer does not directly give notice. This essay explores the two views, their policies, and exceptions that courts have used as escape devices to avoid harsh results. Although it remains unlikely that jurisdictions will significantly change their well-settled UCC interpretations, including in this context, advocates should be aware of the diverse array of decisions relating to the topic. Because the exceptions carved out of § 2-607(3)(a) unanimously favor the equitable result, presenting the court with a reasonable escape from unfair application of its broad rule could mean the difference between § 2-607(3)(a) barring an aggrieved buyer‘s claim and a full recovery for the seller‘s breach.