Okla. Stat. tit. 12A § 2-502

Current through Laws 2024, c. 135.

Section 2-502 - Buyer's Right to Goods on Seller's Insolvency

(1) Subject to paragraphs (2) and (3) of this section and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which the buyer has a special property under the provisions of Section 2-501 of this title may on making and keeping good a tender of any unpaid portion of their price recover them from the seller if:

(a) in the case of goods bought for personal, family, or household purposes, the seller repudiates or fails to deliver as required by the contract; or

(b) in all cases, the seller becomes insolvent within ten (10) days after receipt of the first installment on their price.

(2) The buyer's right to recover the goods under subparagraph (a) of paragraph (1) vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

(3) If the identification creating his special property has been made by the buyer he acquires the right to recover the goods only if they conform to the contract for sale.

Okla. Stat. tit. 12A, § 2-502

Laws 1961, SB 36, p. 88, § 2-502; Amended by Laws 2000, SB 1519, c. 371, §151, eff. 7/1/2001.

Oklahoma Code Comment

This is a new concept, and there are no comparable previous Oklahoma decisions.

Under this section, the buyer obtains the rights to the goods, even though "title" has not passed, if there has been a sufficient identification under Section 2-501 to pass to the buyer a "special interest," provided, that the buyer tenders the unpaid portion of their price, and provided also that insolvency occurs within 10 days. The provision which undoubtedly will be most frequently involved in Section 2-501 is (1)(b) ". . . when goods are shipped, marked or otherwise designated by the seller as goods to which the contract refers."

Although this section grants remedies not presently available in some situations, it may limit the buyer's remedies in others. Suppose, for example, that the seller had "appropriated" the goods under circumstances sufficient to pass title under existing law, and the seller becomes insolvent thirty days after such appropriation and payment of the purchase price, but the goods were still undelivered. Under existing case law, subject, however, to the seller in possession rule which may make the sale void as to creditors, the buyer is entitled to possession. Under the Commercial Code, he would not be so entitled because of the ten day time limit.

Note the importance of the Commercial Code's seller in possession rule which, as to creditors, permits retention by the seller for a commercially reasonable time. If it were not for this rule, the buyer's rights under Section 2-502 would be ineffective, because the retention by the seller would otherwise be considered, under the previous Oklahoma rule, as a fraud upon the creditors of the seller.