C241 Study Plan - Part XI (Chapter 18)

10. Describe remedies for breach of international sales contracts.

- sue for money damages, including foreseeable consequential damages - avoid obligations under the contract if the seller breaches - avoid obligations under the contract if the buyer breaches the contract, fails to accept delivery, or fails to pay - sue for specific performance

5. Describe the buyer's obligations, as it pertains to payment, inspection, and acceptance.

- unless otherwise stated in contract, the buyer or lessee must make payment at the time and place the goods are received. - unless otherwise stated in contract, the buyer or lessee has an absolute right to inspect the goods before making payment to verify the goods tendered conform to the contract. If the goods are not as ordered, the buyer or lessee has no duty to pay. - acceptance of the goods in full - partial acceptance of the goods if some of the goods are nonconforming

9. Describe letter of credit transactions, as they pertain to international sales contracts.

A letter of credit is a written instrument, usually issued by a bank on behalf of a customer or other person, in which the issuer promises to honor drafts or other demands for payment by third persons in accordance with the terms of the instrument and are frequently used to facilitate international business transactions.

7. Describe the remedies a seller has when the buyer breaches.

If the buyer breaches contract before the goods have been delivered, the seller may: - cancel or rescind the contract - resell the goods and sue to cover damages - sue to recover the purchase price or lease payments due - sue to recover damages for the buyer's nonacceptance of goods

8. Describe the remedies a buyer has when the seller breaches.

If the seller refuses to deliver the goods, the buyer may: - cancel or rescind the contract - obtain goods that have been paid for if the seller is insolvent - sue to obtain specific performance if the goods are unique or if damages are an inadequate remedy - buy other goods (obtain cover) and recover damages from the seller - sue to obtain identified goods held by a third party (replevy goods) - sue to obtain damages

2. What are the seller's and buyer's obligations under the good faith provision?

In performing 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.

3. Define and describe the different types of delivery.

Shipment contract: requires or authorizes the seller to ship goods by a carrier, rather than deliver them at a particular destination. Destination contract: seller agrees to deliver conforming goods to the buyer at a particular destination.

1. Describe the UCC's "Good Faith" provision.

The UCC's good faith provision, which can never be disclaimed, reads as follows: "every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement." Good faith means honesty in fact. For a merchant, it means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. In other words, merchants are held to a higher standard of performance or duty than are nonmerchants.

4. Describe the "perfect tender" rule, including possible exceptions to the rule.

The perfect tender rule is a common law rule under which a seller was required to deliver the buyer goods that conformed perfectly to the requirements stipulated in the sales contract. A tender of nonconforming goods would automatically constitute a breach of contract. Under the UCC, the rule has been greatly modified. Exceptions to the perfect tender rule: - a contrary contractual agreement of the parties - cure ( a seller's right to repair, adjust, or replace defective or nonconforming goods under certain circumstances)

6. Explain the concept of "anticipatory repudiation."

an assertion or action by a party indicating that he will not perform an obligation that the party is contractually obligated to perform at a time in the future.