B.Law CHAPTER 22

anticipatory repudiation

before the time for contract performance, one party clearly communicates to the other the intention not to perform

exceptions to perfect tender rule

agreement, cure, substitution of carriers, installment contracts, commercial impracticability, destruction of goods, and assurance and cooperation

substitution of carriers

if a commercially reasonable substitute is available, this substitute performance is sufficient tender to the buyer and must be used [UCC 2-614(1)]. The seller or lessor is required to arrange for a substitute carrier and normally is responsible for any additional shipping costs

If the contract does not indicate where the goods will be delivered

one of the following... 1) The seller's place of business. 2) The seller's residence, if the seller has no business location [UCC 2-308(a)]. 3) The location of the goods, if both parties know at the time of contracting that the goods are located somewhere other than the seller's business

right of inspection

the buyer or lessee has an absolute right to inspect the goods before making payment

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 seller must also give the buyer appropriate notice and any necessary documents to enable the buyer to obtain delivery from the carrier

tender of delivery

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

if buyer/lessee breaches K before delivery

1) Cancel (rescind) the contract. 2) Withhold delivery of the goods. 3) Resell the goods and sue to recover damages. 4) Sue to recover the purchase price or lease payments due. 5) Sue to recover damages for the buyer's nonacceptance of goods.

shipment contract

1) Place the goods into the hands of the carrier. 2) Make a contract for their transportation that is reasonable according to the nature of the goods and their value. (For instance, certain types of goods need refrigeration in transit.) 3) Obtain and promptly deliver or tender to the buyer any documents necessary to enable the buyer to obtain possession of the goods from the carrier. 4) Promptly notify the buyer that shipment has been made

acceptance

1) The buyer or lessee indicates (by words or conduct) to the seller or lessor that the goods are conforming or that he or she will retain them in spite of their nonconformity [UCC 2-606(1)(a), 2A-515(1)(a)]. 2) The buyer or lessee fails to reject the goods within a reasonable period of time [UCC 2-602(1), 2-606(1)(b), 2A-515(1)(b)]. 3) In sales contracts, the buyer will be deemed to have accepted the goods if he or she performs any act inconsistent with the seller's ownership. For instance, any use or resale of the goods—except for the limited purpose of testing or inspecting the goods—generally constitutes an acceptance

2 choices of nonbreaching party

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

perfect tender rule

A common law rule under which a seller was required to deliver to 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 Uniform Commercial Code, the rule has been greatly modified

reasonable grounds

Even if the contract time for performance has expired, the seller or lessor can still cure if he or she had reasonable grounds to believe that the nonconforming tender would be acceptable to the buyer or lessee

commercial impracticability

Occurrences unforeseen by either party when a contract was made may make performance commercially impracticable. When this occurs, the perfect tender rule no longer applies. The seller or lessor must, however, notify the buyer or lessee as soon as practicable that there will be a delay or nondelivery

conforming goods

The basic duty of the seller or lessor is to deliver the goods called for under the contract to the buyer or lessee. Goods that conform to the contract description in every way

obligations of buyer or lessee

The main obligation of the buyer or lessee under a sales or lease contract is to pay for the goods tendered. Once the seller or lessor has adequately tendered delivery, the buyer or lessee is obligated to accept the goods and pay for them according to the terms of the contract

agreement of parties

The parties may agree, for instance, that defective goods or parts will not be rejected if the seller or lessor is able to repair or replace them within a reasonable period of time

cure

The seller or lessor has a right to attempt to "cure" a defect when the following are true: 1) A delivery is rejected because the goods were nonconforming. 2) The time for performance has not yet expired. 3) The seller or lessor provides timely notice to the buyer or lessee of the intention to cure. 4) The cure can be made within the contract time for performance.

installment contract

a buyer or lessee can reject an installment only if the nonconformity substantially impairs the value of the installment and cannot be cured