## Facts

- Metro-North determined that federal and state law required prompt installation of a fall-protection system for elevated areas in Grand Central Terminal to permit maintenance and renovation work.
- Metro-North contracted with Sinco to supply and install a “Sayfglida” fall-protection system for $197,325, with performance due by June 26, 1999; the contract stressed reliability and worker safety.
- During a June 29, 1999 training demonstration, a key safety sleeve (“Sayflink”) fell apart in an employee’s hands; additional sleeves also proved defective.
- Sinco acknowledged a quality-control failure and attributed the defect to improper manual assembly.
- The contract required Metro-North to provide notice of default and a seven-day opportunity to cure.
- After notice, Sinco delivered replacement sleeves of two types and provided a videotape of a single stress test; Metro-North rejected the submission as inadequate.
- Sinco then proposed additional steps (independent evaluation, further testing, alternative sleeves from another manufacturer), which Metro-North also rejected.
- Metro-North terminated the contract and hired another contractor to complete the system at a higher cost, then sought cover damages on its counterclaim.

## Issues

1. Whether, under New York law, a buyer’s loss of confidence after a serious defect in safety equipment (“shaken faith”) excuses the buyer from accepting any cure attempt.
2. Whether Sinco made an effective cure by tendering replacement sleeves and limited testing evidence within the cure period.
3. Whether Sinco’s post-rejection proposals for future testing or alternative components constituted a cure (conforming tender) under the UCC and the contract.
4. Whether Metro-North was entitled to terminate and recover cover damages after Sinco’s nonconforming tender and failed cure.

## Decision

- The court granted Metro-North’s motion for summary judgment and denied Sinco’s cross-motion, holding Metro-North properly terminated and could recover cover damages.
- The court rejected “shaken faith” as an automatic rule excusing the buyer from considering cure, but held Sinco failed to carry its burden to provide a conforming, reliable cure.
- The matter was referred for an inquest on damages.
- On the damages inquest, the magistrate judge recommended awarding Metro-North $112,294.79 in damages plus $1,157.72 in costs (total $113,452.51).

## Legal Principles

- Under New York’s UCC, a seller who tenders nonconforming goods may retain a right to cure, but the cure must be a conforming tender within the applicable time limits.
- A buyer’s loss of confidence after a defective tender does not, by itself, eliminate the buyer’s obligation to accept an effective cure where the contract and UCC provide a cure opportunity.
- The party attempting to cure bears the burden to show the cure conforms to the contract’s requirements; proposals or assurances without a conforming tender are insufficient.
- For safety-critical performance, conformity includes objective assurance of required reliability; limited or incomplete testing may be inadequate to establish conforming cure.
- After a failed cure, the buyer may terminate and recover cover damages measured by the reasonable cost of substitute performance minus the contract price, plus allowable related costs.

## Conclusion

The court held that Metro-North could not refuse cure solely based on “shaken faith,” but Sinco’s replacement sleeves and limited testing did not constitute a conforming cure for a life-safety system; Metro-North therefore properly terminated the contract and recovered cover damages and costs.


Sinco, Inc. v. Metro-North Commuter R.R. Co., 133 F. Supp. 2d 308 (S.D.N.Y. 2001)