## Facts

- Masterpiece Apparel, Ltd. (Masterpiece), a wholesale clothing distributor, placed approximately 45 purchase orders for garments to be manufactured by Knic Knac Agencies (Knic Knac).
- Knic Knac missed the contractual deadlines for filling some, but not all, of the initial purchase orders.
- Masterpiece resold the first shipments it received to Logo 7, a clothing retailer.
- Logo 7 complained about workmanship issues, including loose tags and poor stitching.
- After receiving those complaints, Masterpiece canceled the remaining (undelivered) orders and told Knic Knac only that Logo 7 found the garments to be of poor quality.
- Knic Knac sued Masterpiece in federal district court seeking to recover the contract price of the canceled orders under New York’s Uniform Commercial Code (UCC) § 2-709.
- Masterpiece moved for summary judgment.

## Issues

1. Whether a seller may recover the contract price under N.Y. UCC § 2-709 for garment orders the buyer canceled before delivery, where the buyer did not accept the goods.
2. Whether, on the summary-judgment record, Knic Knac showed the statutory prerequisites for a § 2-709 “action for the price” (including that the goods were accepted or, if identified to the contract, could not be resold at a reasonable price after reasonable effort).

## Decision

- The court treated N.Y. UCC § 2-709 as a limited remedy that does not automatically allow a seller to recover the full price merely because a buyer canceled outstanding orders.
- The court concluded that Knic Knac’s claim for the price of the canceled, undelivered orders did not satisfy § 2-709’s requirements on the record presented.
- The court granted Masterpiece’s motion for summary judgment on Knic Knac’s § 2-709 action for the price.

## Legal Principles

- Under N.Y. UCC § 2-709, a seller’s “action for the price” is generally available only for (a) goods accepted by the buyer, or (b) conforming goods lost or damaged after the risk of loss passes to the buyer, or (c) identified goods that the seller is unable to resell at a reasonable price after reasonable effort (or where circumstances indicate such effort would be unavailing).
- When goods have not been accepted and can be resold in the ordinary course, the seller’s recovery is ordinarily limited to damages remedies under Article 2 rather than the full contract price.
- A buyer’s cancellation of future orders, standing alone, does not convert the seller’s remedy into a § 2-709 price claim; the seller must meet the statute’s specific conditions.
- On summary judgment, the party seeking to proceed under § 2-709 must come forward with evidence supporting the statutory elements for a price action; otherwise, the claim may be disposed of as a matter of law.

## Conclusion

In *Knic Knac Agencies v. Masterpiece Apparel, Ltd.*, the court addressed a seller’s attempt to recover the contract price of canceled, undelivered garment orders under N.Y. UCC § 2-709 and held that § 2-709 provides a narrow price remedy requiring acceptance (or other statutory conditions), granting summary judgment to the buyer where the seller did not establish entitlement to the contract price for the canceled orders.


Knic Knac Agencies v. Masterpiece Apparel, Ltd., 1999 WL 156379 (1999)