Under UCC, how must shipments be treated in an installment contract?

In the context of an installment contract governed by the Uniform Commercial Code (UCC), each shipment is treated as a separate and distinct delivery. This means that separate shipments must be accepted independently, allowing the buyer to assess the conformity or non-conformity of each individual delivery.

If a shipment does not conform to the terms of the contract, the buyer typically has the right to reject that specific installment without affecting their obligation to accept or pay for other shipments. This flexibility is crucial in installment contracts as it helps to manage performance issues on a shipment-by-shipment basis, rather than binding the parties to an all-or-nothing acceptance of a larger batch of goods.

In contrast, the other possibilities suggest that shipments either can be collectively refused, must be accepted together, or cannot be divided, which does not align with the UCC's principles regarding installment contracts. The UCC is designed to facilitate commerce and provide mechanisms for addressing disputes over performance, making the independent acceptance of separate shipments an essential aspect of managing an installment contract.