The plaintiff ordered goods from the defendant for immediate delivery, terms, $1,500 down, balance in three and six months, notes being given for the unpaid balance. The defendant accepted the order. When the check which the plaintiff gave for the down payment was dishonored, the defendant investigated his financial condition and discovered that there were a number of unsatisfied judgments against him. On learning this, the defendant notified the plaintiff that he could not make the sale on credit but would do so on a cash basis. Upon the plaintiff's refusal to accede, the defendant notified him that the order had been cancelled and returned the check, whereupon plaintiff brought suit for breach of contract. Held, a seller of goods on credit, upon learning of his buyer's insolvency, may refuse to deliver except for cash; the fact that the buyer has given a note for the price, payable at the expiration of the credit, does not vary the rule; neither need tender of the goods be made with the seller's demand for cash. Rock-Ola Mfg. Corp. v. Leopold, (C. C. A. 5th, 1938) 98 F. (2d) 196.
John H. Uhl,
SALES - EFFECT OF BUYER'S INSOLVENCY ON SELLER'S DUTY TO DELIVER OR TENDER GOODS,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol37/iss6/25