Legal Definitions - functional rejection

Functional rejection occurs when a buyer refuses to accept goods because they fail to perform their intended purpose or function as promised in the sales agreement. This type of rejection focuses on the operational capabilities of the goods, meaning they do not work as they should or do not fulfill their practical requirements, rather than merely having cosmetic flaws or being the wrong item.

• Example 1: Industrial Machinery

  A manufacturing company purchases a specialized robotic arm designed to precisely assemble small electronic components at a rate of 500 units per hour. Upon installation and testing, the arm consistently misaligns components, causing defects, and can only manage an assembly rate of 150 units per hour before experiencing software errors. The company notifies the supplier that they are rejecting the robotic arm.

  This is a functional rejection because the robotic arm, despite being the correct model, fails to perform its core functions of precise assembly and high-volume output as specified in the purchase agreement, making it unsuitable for the company's production needs.

• Example 2: Custom Software

  A marketing agency commissions a custom software application intended to automate their client billing and project tracking processes. After several weeks of attempting to use the delivered software, it frequently crashes when generating invoices, incorrectly calculates project hours, and cannot export data to their accounting system as promised. The agency informs the software developer that they will not accept the final product.

  The agency's refusal constitutes a functional rejection because the software fails to perform its critical, promised functions of accurate billing, project tracking, and data integration, which are essential to its intended use within the business.

• Example 3: Commercial Vehicle

  A delivery service buys a new cargo van with a specific requirement for a refrigeration unit capable of maintaining temperatures between 0-5 degrees Celsius for perishable goods. Within the first week of operation, the refrigeration unit repeatedly malfunctions, allowing temperatures to rise above 10 degrees Celsius, and the van's engine frequently stalls during deliveries. The delivery service contacts the dealership to return the vehicle.

  This situation represents a functional rejection because both the primary function of the refrigeration unit (maintaining temperature) and the basic operational function of the vehicle (reliable engine performance) are failing, rendering the van unfit for its intended commercial purpose.