Case Problem with Sample Answer—Nonconforming Goods. Padma Paper Mills, Ltd., converts waste paper into usable paper. In 2007, Padma entered into a contract with Universal Exports, Inc., under which Universal Exports certified that it would ship white envelope cuttings, and Padma paid $131,000 for the paper. When the shipment arrived, however, Padma discovered that Universal Exports had sent multicolored paper plates and other brightly colored paper products. Padma accepted the goods but notified Universal Exports that they did not conform to the contract.

Can Padma recover even though it accepted the goods knowing that they were nonconforming? If so, how? [Padma Paper Mills, Ltd. v. Universal Exports, Inc., 34 Misc.3d 1236(A)

(N.Y.Sup. 2012)] (See pages 428–429.)

—For a sample answer to Problem 16–7, go to Appendix H at the end of this text.