Actual vs. Direct Notice Under the UCC: Key Takeaways from the Illinois Supreme Court’s Decision in Andrews v. Carbon on 26th

Photo courtesy of Illinois Supreme Court

On May 22, 2025, the Illinois Supreme Court issued a significant decision in Andrews v. Carbon on 26th, LLC that clarifies the distinction between “actual notice” and “direct notice” under § 2-607(3)(a) of the Uniform Commercial Code (UCC). The case arose from a food-borne illness outbreak linked to contaminated cilantro and raised critical questions about how and when a buyer must notify a seller of a breach of warranty.

At the center of the dispute was whether a distributor, Martin Produce, could maintain a breach of implied warranty claim against two cilantro wholesalers—Jack Tuchten Wholesale Produce and La Galera Produce—despite not having sent them formal, direct notice of the alleged defect. The wholesalers argued that Martin was barred from recovery because it did not comply with the UCC’s requirement that a buyer notify the seller of a breach “within a reasonable time.” The court held that the wholesalers had actual knowledge of the alleged product defect, excusing the distributor from providing direct notice under UCC § 2-607(3)(a).

Key Facts

Restaurant patrons became ill from E. coli after eating contaminated cilantro at two Chicago restaurants in June 2016. The restaurants purchased the cilantro from distributor Martin, who had purchased it from wholesalers Tuchten and La Galera. Personal injury plaintiffs filed lawsuits in June 2018 against the restaurants, distributor (Martin), and wholesalers (Tuchten and La Galera). On April 16, 2019, Martin filed a counterclaim against Tuchten and La Galera, for contribution and breach of implied warranty of merchantability.

The circuit court granted summary judgment in favor of the wholesalers on the warranty claims, finding that the distributor had failed to give “direct notice” of the potential warranty claims to the wholesalers. On appeal, the First District Appellate Court reversed, finding that by naming everyone in the supply chain, the personal injury suits necessarily gave each of those entities actual knowledge that the cilantro they sold was alleged to be defective.

The Supreme Court Decision

The Supreme Court affirmed the Appellate Court’s reversal of summary judgment, finding that the wholesalers received sufficient notice of the warranty claims. The Court’s opinion distinguishes “actual notice” from “direct notice.” Direct notice typically involves a communication—written or oral—made by the buyer to the seller regarding a product defect. Actual notice, by contrast, can arise from other circumstances where the seller becomes fully aware of the issue, even absent a formal notice. While direct notice is the general rule, it is not the exclusive method for satisfying the UCC’s notice requirement. The Court emphasized that under existing precedent—most notably Connick v. Suzuki Motor Co., 174 Ill. 2d 482 (1996)—notice may be excused if the seller has “actual knowledge” of the defect in the specific product sold to the buyer. In Andrews, the wholesalers had such knowledge because they were named as defendants in earlier personal injury lawsuits and had participated in years of discovery related to the allegedly contaminated cilantro.

Takeaways

This clarification has significant implications for businesses operating within product supply chains. Companies should not assume that the absence of a formal notice from a buyer insulates them from breach of warranty claims. If the seller has been made aware—through pleadings, litigation, or discovery—that a specific transaction involving its product is at issue, courts may find that the seller had actual knowledge sufficient to satisfy section 2-607(3)(a). Although Andrews was a case where the wholesalers were direct defendants in the underlying personal injury litigation, it is conceivable that a court would find receipt of third-party discovery, like a subpoena for records, sufficient notice that the company’s product is being questioned.

Companies should closely monitor litigation involving their products, even if they are not direct defendants, in order to accurately assess their potential exposure to future warranty claims.