Business Law Chapter 21

Consequential Damages

May be limited or excluded entirely where the loss is. Parties to a contract can limit or exclude consequential dam- ages, provided the limitation is not unconscionable.

Rejection

Notify the seller and identify the defect causing the rejection.

Commercially Impracticable

A delay in delivery or nondelivery in whole or in part is not a breach if performance has been made impracticable "by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made."

Installment Contract

A single contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately. Buyer or lessee can reject an installment only if the nonconformity substantially impairs the value of the installment and cannot be cured.

Acceptance

After inspection either indication of willingness to take goods or failure to reject.

Commercial Unit

Any unit treated by commercial usage as a single whole. A unit of goods that, by commercial usage, is viewed as a "single whole" for purposes of sale and that cannot be divided without materially impairing the character of the unit, its market value, or its use.

Exceptions to the Perfect Tender Rule

Exceptions to the per- fect tender rule may be established by agreement. Or, CURE - The UCC does not specifically define the term cure, but it refers to the right of the seller or lessor to repair, adjust, or replace defective or non- conforming goods

Conforming Goods

Goods that conform to the contract description in every way.

The Right of Assurance

If one of the parties to a contract has "reasonable grounds" to believe that the other party will not per- form as contracted, she or he may in writing "demand adequate assurance of due performance" from the other party.

Partial Acceptance

If some of the goods delivered do not conform to the contract and the seller or lessor has failed to cure, the buyer or lessee can make a partial acceptance.

Exclusive Remedies

If the parties state that a remedy is exclusive, then it is the sole remedy. When circumstances cause an exclusive remedy to fail in its essential purpose, however, it is no longer exclusive, and the buyer or lessee may pursue other remedies available under the UCC.

Tender of delivery

Occurs when the seller or lessor makes conforming goods available to the buyer or lessee and gives the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery .

Assurance

One party has reason to believe the other party will fail to perform.

Liquidated Damages

Parties agree on the amount of damages that will be paid to the injured party.

Compensatory Damages

Provide a plaintiff with the monetary amount necessary to replace what was lost, and nothing more.

Shipment contract

Requires or authorizes the seller to ship goods by a carrier. The contract does not require that the seller deliver the goods at a particular destination.

Destruction of Identified Goods

Sometimes, an unexpected event, such as a fire, totally destroys goods through no fault of either party and before risk passes to the buyer or lessee.

Right of Inspection

The buyer or lessee has an absolute right to inspect the goods before mak- ing payment. This right allows the buyer or lessee to verify that the goods tendered or delivered conform to the contract.

Destination contract

The seller agrees to deliver conforming goods to the buyer at a particular destination. The goods must be tendered at a reasonable hour and held at the buyer's disposal for a reasonable length of time.

The Perfect Tender Rule

Under the common law, the seller was obligated to deliver goods that conformed with the terms of the contract in every detail.

Revoke

Undo the acceptance.

The Duty of Cooperation

When cooperation is not forthcoming, the other party can suspend his or her own performance without liability and hold the uncooperative party in breach or proceed to perform the contract in any reasonable manner.