Tennessee Code Annotated
Tenn. Code Ann. § 47-2-702 (2026)
Seller's remedies on discovery of buyer's insolvency
✓ current as of May 2026
- (1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this chapter (§ 47-2-705).
- (2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten (10) days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three (3) months before delivery the ten (10) day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer's fraudulent or innocent misrepresentation of solvency or of intent to pay.
- (3) The seller's right to reclaim under subsection (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser or lien creditor under this chapter (§ 47-2-403). Successful reclamation of goods excludes all other remedies with respect to them.
Acts 1963, ch. 81, § 1 (2-702).
Notes of Decisions
Cited in 8
cases, 1982–1995 · leading case: Liles Bros. & Son v. Wright, 638 S.W.2d 383 (Tenn. 1982).
Liles Bros. & Son v. Wright, 638 S.W.2d 383 (Tenn. 1982). “He contends that he made proper demand for the return of the equipment and pursuant to T.C.A., § 47-2-702, he was entitled to have the equipment returned.”
North Georgia Toyota v. Jahn (In Re Tom Woods Used Cars, Inc.), 24 B.R. 529 (Bankr. E.D. Tenn. 1982). “See Tenn.Code Ann. § 47-2-702(2); Liles Bros.”
Ford Motor Credit Co. v. Ken Gardner Ford Sales, Inc. (In Re Ken Gardner Ford Sales, Inc.), 23 B.R. 743 (E.D. Tenn. 1982). “…on credit while insolvent he may reclaim the goods upon demand made within ten (10) days after the receipt, ...” TCA § 47-2-702(2)”
Cowles Tool Co. v. Prod. Steel, Inc. (In Re Prod. Steel, Inc.), 21 B.R. 951 (Bankr. M.D. Tenn. 1982). “Plaintiff’s complaint states that the bankruptcy court should grant relief from the stay to proceed with reclamation under Tenn.Code Ann. § 47-2-702 (1979). Plaintiff alleges that it delivered tooling to the defendant *953 and that the defendant was insolvent upon receipt of the…”
In Re Microwave Prods. of Am., Inc., 94 B.R. 967 (Bankr. W.D. Tenn. 1989). “3 In Tennessee, § 2-702 of the Uniform Commercial Code was adopted and codified as T.C.A. § 47-2-702(2) which states in pertinent part: (2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten…”
Marlow v. Oakland Gin Co. (In Re Julien Co.), 128 B.R. 987 (Bankr. W.D. Tenn. 1991). “Consequently, although the evidence reflects that Oakland made a timely oral reclamation demand upon the warehouse for return of the cotton in accordance with § 47-2-702 and that some extent of the debtor’s financial trouble was known to Oakland at that time, such satisfaction…”
In Re the Julien Co., Debtor. Oakland Gin Co., Inc. v. Jack Marlow, Tr. for the Julien Co., 44 F.3d 426 (6th Cir. 1995). “In Oakland’s view, as the inter-pleader suit was filed prior to the debtor’s bankruptcy, Tenn.Code Ann. § 47-2-702(2), rather than federal bankruptcy law, governs the reclamation claim.”
Beds & More, Inc. v. Deutscher (In Re S. Indus. Banking Corp.), 36 B.R. 1008 (Bankr. E.D. Tenn. 1984). “Plaintiff approaches the issue as one of reclamation rights, contending it timely demanded return of the chattel paper, pursuant to Tenn. Code Ann. § 47-2-702 (1979), and perfected its interest vis-a-vis the trustee.”
— Tenn. Code Ann. § 47-2-702(2) — 7 cases
Ford Motor Credit Co. v. Ken Gardner Ford Sales, Inc. (In Re Ken Gardner Ford Sales, Inc.), 23 B.R. 743 (E.D. Tenn. 1982). “…on credit while insolvent he may reclaim the goods upon demand made within ten (10) days after the receipt, ...” TCA § 47-2-702(2)”
In Re Microwave Prods. of Am., Inc., 94 B.R. 967 (Bankr. W.D. Tenn. 1989). “3 In Tennessee, § 2-702 of the Uniform Commercial Code was adopted and codified as T.C.A. § 47-2-702(2) which states in pertinent part: (2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten…”
In Re the Julien Co., Debtor. Oakland Gin Co., Inc. v. Jack Marlow, Tr. for the Julien Co., 44 F.3d 426 (6th Cir. 1995). “In Oakland’s view, as the inter-pleader suit was filed prior to the debtor’s bankruptcy, Tenn.Code Ann. § 47-2-702(2), rather than federal bankruptcy law, governs the reclamation claim.”
North Georgia Toyota v. Jahn (In Re Tom Woods Used Cars, Inc.), 24 B.R. 529 (Bankr. E.D. Tenn. 1982). “See Tenn.Code Ann. § 47-2-702(2); Liles Bros.”
Marlow v. Oakland Gin Co. (In Re Julien Co.), 128 B.R. 987 (Bankr. W.D. Tenn. 1991). “Consequently, although the evidence reflects that Oakland made a timely oral reclamation demand upon the warehouse for return of the cotton in accordance with § 47-2-702 and that some extent of the debtor’s financial trouble was known to Oakland at that time, such satisfaction…”
— Tenn. Code Ann. § 47-2-702(2)(3) — 1 case
Liles Bros. & Son v. Wright, 638 S.W.2d 383 (Tenn. 1982). “He contends that he made proper demand for the return of the equipment and pursuant to T.C.A., § 47-2-702, he was entitled to have the equipment returned.”
— Tenn. Code Ann. § 47-2-702(3) — 1 case
North Georgia Toyota v. Jahn (In Re Tom Woods Used Cars, Inc.), 24 B.R. 529 (Bankr. E.D. Tenn. 1982). “See Tenn.Code Ann. § 47-2-702(2); Liles Bros.”
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