Actual Knowledge Through Third-Party Litigation Satisfies UCC §2-607 Notice Requirement

Introduction

This commentary examines the Illinois Supreme Court’s decision in Andrews v. Carbon on 26th, LLC (2025 IL 130862), which clarified when a buyer need not give direct notice of an implied warranty breach under section 2-607(3)(a) of the Uniform Commercial Code (UCC). The underlying dispute arose from an E. coli outbreak linked to contaminated cilantro served at two Chicago restaurants owned by Carbon on 26th, LLC and Carbon on Chicago, LLC (“Carbon”). Carbon purchased cilantro from distributor Martin Produce, Inc. (“Martin”), which in turn bought from wholesalers Jack Tuchten Wholesale Produce, Inc. (“Tuchten”) and La Galera Produce, Inc. (“La Galera”). After restaurant patrons filed personal injury suits, Martin sued the wholesalers for contribution and breach of implied warranty. The key issue: whether Martin satisfied its obligation to notify the wholesalers of the alleged breach.

Summary of the Judgment

The trial court entered summary judgment for the wholesalers, concluding that Martin had not given the “direct notice” required by UCC section 2-607(3)(a). The appellate court reversed, holding that wholesalers had “actual knowledge” of the defect by virtue of being named in the earlier personal injury suits. The Illinois Supreme Court affirmed the appellate court: the wholesalers were sufficiently apprised of the specific contaminated cilantro transactions, and thus Martin’s failure to give separate direct notice did not bar its warranty claim.

Analysis

Precedents Cited

UCC §2-607(3)(a) (810 ILCS 5/2-607): Requires a buyer to notify a seller “within a reasonable time” of any breach of implied warranty or lose remedies.
Connick v. Suzuki Motor Co., Ltd., 174 Ill. 2d 482 (1996): Held that a buyer normally must give direct notice unless the seller has actual knowledge of the defect, or a consumer personal‐injury plaintiff files suit.
Malawy v. Richards Mfg. Co., 150 Ill. App. 3d 549 (1986): Recognized actual knowledge from a seller’s firsthand observation of defects.
Crest Container Corp. v. R.H. Bishop Co., 111 Ill. App. 3d 1068 (1982) and Overland Bond & Investment Corp. v. Howard, 9 Ill. App. 3d 348 (1972): Further examples of actual knowledge through direct inspection or involvement.

Legal Reasoning

The court applied the two exceptions from Connick to the direct notice rule:

Actual knowledge exception: Seller need not receive formal notice if it already knows of the specific defect in the particular product transaction.
Consumer personal‐injury exception: A consumer plaintiff injured by a defective product may satisfy notice simply by filing suit.

Martin did not fit the second exception, but the appellate and supreme courts held that the wholesalers met the first exception. By being named as defendants in over fifty consolidated personal injury complaints alleging that their cilantro was contaminated, the wholesalers were “somehow apprised” of the precise shipments and alleged E. coli defect. Under UCC comment 4, notice need only alert the seller that the transaction “is still troublesome and must be watched.” The judicial filings themselves sufficed to confer actual knowledge.

Impact

Clarifies that third‐party litigation can create actual knowledge of a defect under UCC §2-607(3)(a).
Limits the scope of “direct notice” by buyers in chains of distribution when sellers have been fully informed through prior suits.
Reinforces early dispute resolution and inspection goals of the UCC by incentivizing thorough presuit investigation.
Provides guidance for distributors and wholesalers in foodborne‐illness and mass‐tort contexts regarding notice obligations.

Complex Concepts Simplified

“Tender accepted”: When the buyer has taken and kept the goods from the seller.
Implied warranty of merchantability: An unstated promise that goods are fit for ordinary use.
UCC §2-607(3)(a) notice requirement: Buyers must tell sellers of any warranty breach “within a reasonable time” after discovery, or lose remedies.
Actual knowledge: Seller’s awareness—by any means—of a defect in a particular product sale.
Direct notice vs. constructive notice: Direct notice is formal communication from buyer; constructive or actual knowledge can arise through other sources, including lawsuits.

Conclusion

The Supreme Court of Illinois’ decision in Andrews v. Carbon on 26th, LLC affirms that a buyer’s notice requirement under UCC §2-607(3)(a) is excused when the seller already possesses actual knowledge of the specific defect. By recognizing that personal injury complaints naming all participants in the chain of distribution can serve as adequate notice, the court balanced the UCC’s aims of encouraging presuit resolution and ensuring sellers can investigate and remedy defects. This ruling will shape how distributors and wholesalers approach warranty claims and presuit communications in future chain‐of‐distribution and mass‐tort litigation.