Chapter 18 Questions

What options are available to the nonbreaching party when the other party to a sales or lease contract repudiates the contract prior to the time for performance?

When anticipatory repudiation occurs, the nonbreaching party has a choice of two responses: 1) treat the repudiation as a final breach by pursuing a remedy 2) wait to see if the repudiating party will decide to honor the contract despite the avowed intention to renege In either situation, the nonbreaching party may suspend performance.

What are the three types of title warranty?

1) Good Title 2) No Liens 3) No Infringements

What implied warranties arise under the UCC?

1) Implied Warranty of Merchantability 2) Implied Warranty of Fitness for a Particular Purpose

Under what circumstances do express warranties arise?

1) the goods conform to any affirmation or promise of fact that the seller or lessor makes to the buyer or lessee about the goods 2) the goods conform to any description of them 3) the goods conform to any sample or model of the goods shown to the buyer or lessee

What remedies are available to a seller or lesser when the buyer or lessee breaches the contract?

If the goods are still in possession of the seller or lessor, the seller can cancel or rescind the contract, withhold delivery of the goods, resell or dispose of the goods and sue to recover damages, sue to recover the purchase price or lease payments due, or sue to recover damages for the buyer's nonacceptance. If the goods are in transit, the seller or lesser can stop the goods from being delivered (depending on quantity). If the goods are in the possession of the buyer or lessee, the seller or lesser can sue for the price of the goods and incidental damages or reclaim the goods if the buyer/lessee is in default.

What remedies can the buyer or lessee obtain?

If the seller/lesser refuses to deliver the goods or the buyer/lessee has rightfully rejected the goods, the buyer/lessee can cancel (rescind) the contract, obtain goods that have been paid for if the seller or lesser is insolvent, sue to obtain specific performance if the goods are unique or damages are an inadequate remedy, buy other goods (obtain cover), and obtain damages from the seller, sue to obtain identified goods held by a third party (replevy goods), or sue to obtain damages. If the seller/lesser delivered nonconforming goods, the buyer/lessee can reject the goods, revoke acceptance of the goods, or recover damages for accepted goods.

What is the perfect tender rule? What are some important exceptions to this rule that apply to sales and lease contracts?

The goods that the seller provides must be what was promised in the contract; agreement of the parties, the right to cure, substitution of carriers, installment contracts, commercial impracticality, commercial impracticality and partial performance, destruction of identified goods, the rights of assurance, and duty of cooperation

What are the respective obligations of the parties under a contract for the sale or lease of goods?

The obligation of the seller or lessor is to transfer and deliver conforming goods. The obligation of the buyer or lessee is to accept and pay for conforming goods in accordance with the contract.

What is the statute of limitations on a breach of contract?

four years