BLAW ch12

3. What options are available to the nonbreaching party when the other party to a sale 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; treat the repudiation as a final breach by pursuing a remedy or wait to see if the repudiating party will decide to honor the contract despite the avowed intention to renege.

4a. What remedies are available to a seller or lessor when the buyer or lessee breaches the contract?

1. Cancel the contract. 2. Resell the goods and sue to recover damages. 3. Sue to recover the purchase price or lease payments due. 4. Sue to recover damages for the buyer's nonacceptance.

4b.What remedies are available to a buyer or lessee if the seller or lessor breaches the contract?

1. Cancel the contract. 2. Obtain goods that have been paid for if the seller or lessor is insolvent. 3. Sue to obtain specific performance if the goods are unique or damages are an inadequate remedy. 4. Buy other goods and obtain damages from the seller. 5. Sue to obtain identified goods held by a third party. 6. Sue to obtain damages.

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

If the goods delivered or the tender of delivery fail in any respect to conform with the terms of the contract, the buyer has the right to accept the goods, reject the entire shipment, or accept part and reject part. By Agreement of the parties: Exceptions can be established by the sales contract itself. Right to cure: Seller can "cure" within the contract time performance. Seller has a right to repair, adjust, or replace nonconforming goods. Substitution of carriers: If agreed upon manner of delivery is impracticable, and reasonable substitute is available, the seller must use this substitute performance, which is sufficient tender to the buyer. Installment contract: A single contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately. Commercial impracticability: Occurrences unforeseen by either party when a contract was made may make performance commercially impracticable. When this occurs, the rule of perfect tender no longer holds. Partial Performance: If unforeseen event affects partial performance, seller is obligated to secure remaining performance via third parties. Destruction of identified goods: Parties are excused only if goods were identified at the time the contract was formed. The Right of Assurance: If one party to a contract has "reasonable grounds" to believe that the other party will not perform as contracted, he or she may in writing "demand adequate assurance of due performance" from the other party. The Duty of Cooperation: When such cooperation is not cooperative, the other party can suspend his or her performance without liability and hold uncooperative party in breach or proceed to perform the contract in any reasonable manner.

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

In the performance of a sales or lease contract, the basic obligation of the seller or lessor is to transfer and deliver conforming goods. The basic obligation of the buyer or lessee is to accept and pay for conforming goods in accordance with the contract.

Installment contract

Under the UCC, a contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately.

Cover

Under the UCC, a remedy that allows the buyer or lessee, on the seller's or lessor's breach, to purchase the goods, in good faith and within a reasonable time, from another seller or lessor and substitute them for the goods due under the contract. If the cost of cover exceeds the cost of the contract goods, the breaching seller or lessor will be liable to the buyer or lessee for the difference, plus incidental and consequential damages.

tender of delivery

Under the Uniform Commercial Code, a seller's or lessor's act of placing conforming goods at the disposal of the buyer or lessee and giving the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery.

Incidental damages

all costs resulting from a breach of contract, including all reasonable expenses incurred because of the breach.

replevin

an action to recover identified goods in the hands of a party who is wrongfully withholding them from other party. Under the UCC, this remedy is usually available only if the buyer or lessee is unable to cover.

Conforming Goods

goods that conform to contract specifications