Chapter 16

Cure

A breaching party's right to provide conforming goods when nonconforming goods were initially delivered, the subject to a reasonable time test

Warranty

An assurance (implied or expressed) by one party that the other can rely on its representations of fact; in sales a binding promise regarding a product in the event that the product does not meet the manufacturer's or seller's promises Implied means the warranty or guarantee is automatically part of the contract; the parties do not negotiate for it

Implied Warranty of Merchantibility

An assurance inferred in every sale unless clearly disclaimed, that merchantable goods will conform to a reasonable performance expectation The purchaser must have purchased or leased the good from a merchant

Express Warranty

Any description of a good's physical nature or its use in either general or specific circumstances that become part of a contract

Usage of trade

Any practice that members of an industry expect to be part of the dealings

Implied Warranty

Automatically included in the contract and is not negotiated

Conforming goods

Goods that conform to contract specifications

Good Faith

Honesty in Fact

Warranty of title

Inferred in every UCC sales transaction that the seller has good and valid title to the goods and has the right to transfer title free and clear of any liens, judgements, or infringements of intellectual property rights of which the buyer does not have knowledge

Course of dealing

Previous commercial transactions between the same parties

Commercial Reasonableness

Reasonable commercial standards of fair dealing, required of merchants in addition to honestly in fact

Perfect Tender Rule

Requirement that the seller deliver the goods in conformity with the contract down to the last detail UCC sections about perfect tender rule indicate that if goods or tender of delivery fails in any respect to conform to the contract the buyer/lessee has the right to accept the goods, reject the entire shipment, or accept part and reject part

Tender of Delivery

Requirement that the seller or lessor have and hold conforming goods at the disposal of the buyer or lessee and give the buyer or leesee reasonable notification to enable him or her to take delivery

Magnuson Moss Act

Requires that if sellers decide to issue a written warranty for a consumer good the seller must indicate if it is a full or limited warranty Applies to consumer goods >10 If written warranty is silent it is presumed to be full warranty (meaning if it is broken/ defective the good or its defective part will be replaced or refunded)

Third Party beneficiaries of warranties

Seller's warranties extend to the buyer's household members and guests Seller's warranties extend to any reasonable and foreseeable user (most common) Seller's warranties extend to anyone injured by the good

Right to Cure

Sellers have the right to cure or fix problems with nonconforming goods They can repair, adjust, or replace defects as long as they give prompt notice of their intent to cure within the contract time for performance

Implied Warranty of trade usage

Something that is generally assumed by a certain industry Ex. a certain good will come with bubble wrap on it

Course of performance

The history of dealings between the parties in the particular contract at issue

Substantial Impairment

Used to modify the perfect tender rule, where a buyer can revoke acceptance of goods and, with installment contracts, a buyer/lessee can reject an installment of a particular item only if the defects substantially impairs the value of the goods

Is a contract with the seller required for an injured party to recover under warranty? How do most states define who can recover under the implied warranties?

Yes under breach of warranty against the seller Three choices for third party beneficiaries of warranties: seller's warranties extend to the buyer's household members and guests, seller's warranties extend to any reasonable and foreseeable users (most common), and extend to anyone injured by the good

Obligations of sellers/lessors and buyers/lessees

terms the parties outline in agreements Custom Rules outlines by the UCC