Printable Format84-2-511. Tender of payment by buyer; payment by check. (1) Unless otherwise agreed tender of payment is a condition to the seller's duty to tender and complete any delivery.
(2) 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.
(3) Subject to the provisions of this act on the effect of an instrument on an obligation (K.S.A. 84-3-310), payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.
History: L. 1965, ch. 564, § 76; L. 1991, ch. 296, § 70; February 1, 1992.
KANSAS COMMENT, 1996
Subsection (1) complements 84-2-507(1) by stating that tender of payment by the buyer is a condition to the seller's duty to tender the goods. The buyer's duty to pay and the seller's duty to deliver generally are concurrent conditions. See 84-2-301. Subsection (2) defines what constitutes sufficient tender of payment by reference to ordinary business practices. Tender of payment by check generally is sufficient. A seller has the right to demand payment in cash, but must grant any extension of time reasonably necessary for the buyer to obtain cash. Under subsection (3), payment by check is conditional, and payment is defeated if the check is not honored upon due presentment. For discussion of the seller's implied right to reclaim the goods when the buyer's check is dishonored, see 1996 Kansas Comments 2 & 3 to 84-2-507. This section was amended in 1992 to reflect the revision of Article 3.
Law Review and Bar Journal References:
Duty of party hereunder contingent upon performance or tender of performance by other party in absence of contrary agreement, Keith Hey, 7 W.L.J. 35 (1967).
"Commercial Transactions Under the New Bankruptcy Act," Paul B. Rasor, 48 J.B.A.K. 199, 202, 203 (1979).
"Bank's Right of Setoff—Iola State Bank v. Bolan," SueAnn S. Bradford, 33 K.L.R. 569, 570 (1985).
CASE ANNOTATIONS
1. Buyer's right to retain and dispose of goods conditioned on seller's right of reclamation; right to reclaim exists where checks dishonored; right to reclaim not indefinite. Holiday Rambler Corp. v. First Nat. Bank and Trust, 723 F.2d 1449, 1451, 1452 (1983).
2. Payment by check, although completing delivery and transfer of conditional title, does not defeat title of subsequent good faith purchaser when check later dishonored. Iola State Bank v. Bolan, 235 Kan. 175, 180, 679 P.2d 720 (1984).
3. Statute has no effect on rights of third parties taking from defaulting buyer. Dick Hatfield Chevrolet, Inc. v. Bob Watson Motors, Inc., 10 Kan. App. 2d 350, 355, 699 P.2d 566 (1985).
4. Cited; bank not good faith purchaser when enriched by refusing to complete agreement with defaulting bank customer and plaintiff. Dick Hatfield Chevrolet, Inc. v. Bob Watson Motors, Inc., 238 Kan. 41, 45, 46, 708 P.2d 494 (1985).