## Facts

- Shantytown Pier, Inc. operated a fishing/recreational charter business and contracted with a boatyard to build a party-fishing vessel, the *Ocean City Princess*.
- Shantytown separately purchased three MAN diesel engines (and related start-up/commissioning services) from Washington Freightliner, Inc., an authorized dealer.
- The engines were delivered to the boatyard for installation no later than September 30, 1990.
- The vessel was completed and placed into service (“commissioned”) on April 20, 1991.
- During the first four years of operation, the vessel experienced repeated engine failures attributed largely to defective pistons; repair efforts did not resolve the problems.
- Shantytown sued the dealer, manufacturer, and a marine service company; by trial it proceeded only on implied-warranty claims under UCC Article 2.
- Defendants asserted the four-year statute of limitations under Maryland’s enactment of UCC § 2-725, arguing accrual occurred at tender of delivery (September 1990), making the suit untimely.

## Issues

1. Under Maryland UCC § 2-725, did the implied-warranty cause of action accrue at physical delivery of the engines to the boatyard (tender of delivery), or at later commissioning when the engines were started and placed into service?
2. Was the timing of “tender of delivery” a question of law or a fact question for the jury, and did defendants bear a burden to prove tender occurred before commissioning?

## Decision

- The Court of Appeals of Maryland reversed the judgment for Shantytown and held the action time-barred.
- The court held the cause of action accrued no later than the engines’ physical delivery to the boatyard in September 1990, because that constituted “tender of delivery” under the UCC.
- The court rejected commissioning as the accrual point and treated the tender-of-delivery determination, on these facts, as controlled by the UCC’s legal definition rather than jury fact-finding.
- A dissent would have treated tender as contract-dependent and potentially tied to start-up/commissioning, which could have supported the verdict.

## Legal Principles

- Under UCC § 2-725(2), a breach-of-warranty claim accrues when the breach occurs, and the breach occurs when tender of delivery is made, regardless of the buyer’s lack of knowledge.
- “Tender of delivery” under UCC § 2-503(1) occurs when the seller puts and holds goods at the buyer’s disposition and provides any reasonably necessary notice to enable taking delivery.
- For limitations purposes, tender can occur upon physical delivery even if the goods are nonconforming; later discovery of defects does not delay accrual.
- Accrual is not postponed by later installation, start-up, or commissioning absent an explicit contractual provision (such as an explicit future-performance warranty) that delays accrual.

## Conclusion

Maryland’s highest court applied UCC § 2-725 strictly, holding that the four-year limitations period on an implied-warranty claim began when the engines were physically delivered and made available to the buyer through the shipbuilder, not when the vessel was later commissioned, rendering the suit untimely.


Wash. Freightliner, Inc. v. Shantytown Pier, Inc., 719 A.2d 541 (Md. 1998)