This is an unofficial draft of Article 2B from April 15, 1998. For the current official version, see the University of Pennsylvania Law School (Official NCCUSL) site at http://www.law.upenn.edu/library/ulc/ulc.htm

SECTION 2B-612. DUTIES FOLLOWING RIGHTFUL REFUSAL OF A COPY. After a rightful refusal of a copy, if the entire contract is rightfully cancelled, Section 2B-702 applies concerning with respect to the refused copy and other obligations. However, if the contract has not been canceled, the parties remain bound by all contractual obligations, and the following rules apply:

(1) Any use of the information or copies by the party refusing tender, or any wrongful disclosure of a trade secret or confidential information that violates the agreement, constitutes a breach of contract and is wrongful against the other party. However, use for a limited time solely to avoid or mitigate loss after the other party is notified of refusal is not inconsistent with the aggrieved party's refusal of the tender if such use is not contrary to instructions received from the party in breach.

(2) An aggrieved party in possession of refused copies or any copies made from them, shall return or deliver all copies and documentation to the tendering party or hold them with reasonable care for disposal at that party's instructions for a reasonable time. In addition , the following rules apply:

(3A) The aggrieved party shall follow any reasonable instructions for delivery received from the tendering party. However, instructions are not reasonable if the tendering party does not arrange for payment of or reimbursement for the reasonable expenses of complying with the instructions.

(4B) If the tendering party does not give instructions within a reasonable time after being notified of refusal, the aggrieved party may, in a reasonable manner to avoid or mitigate loss, store the copies and documentation for the tendering party's account or ship them to that party with a right of reimbursement for reasonable costs of storage and shipment.

(53) An aggrieved party in possession of a refused copy has no further obligations with respect to the information or copy and documentation that were refused. However, both parties remain bound by any obligations of nondisclosure or confidentiality or other contractual use restrictions that would have been enforceable had the performance not been refused.

(64) In complying with this section, an aggrieved party in possession of a refused copy licensee is held to good faith and a standard of care that is reasonable in the circumstances. Conduct in good faith under this section does not constitute acceptance or conversion and is not the basis for an action for damages.

1. Cancellation and Refusal. Subsection (a) reflects that a refusal of a delivery of a copy may or may not lead to a cancellation of the entire contract. When it does result in cancellation, the rules of Section 2B-702 apply to the entire contract and all related materials. If the contract is not cancelled, this section applies and the parties remain bound by all contractual obligations, except of course, as altered by the breach itself.

3. Handling Copies. Subsection (2) is adapted from current law in article 2. This section does not give the refusing party a right to sell goods, documentation or copies related to the intangibles under any circumstance. The materials may be confidential and may be subject to the overriding influence of the proprietary rights held and retained by the other party. As Comment 2 to current ? 2-603 states: "The buyer's duty to resell under [that] section arises from commercial necessity...." That necessity is not present in respect of information. The tendering party's interests are focused on protection of confidentiality or control, not on optimal disposition of the goods that may contain a copy of the information.