Chapter 14 - Performance and Breach of Sales and Lease Contracts
Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should
demand assurances of performance from the seller.
Steel Buildings, Inc., agrees to sell four portable garages to Truck Service Center. Five days later, the buyer refuses delivery and cancels the contract. The seller is entitled to
force the buyer to accept the garages
Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor
is excused from the performance of its contracts.
ABC Toy Store orders one hundred board games from Big Board Games Inc. When the games are delivered, they are all missing pieces. ABC rejects the shipment. To cure, Big Board Games must
promptly notify ABC of the intent to cure.
Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit
regardless of the quantity.
Owen and Pablo enter into a contract for a sale of irrigation equipment. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between
the contract price and the market price.
Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between
the contract price and the market price.
TackMaker, Inc., and Silver Stallion Stables enter into a contract for a sale of bridles, saddlery, and other equine equipment. TackMaker delivers, but Silver Stallion does not pay. TackMaker can normally recover as damages
the purchase price plus incidental damages.
A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact, but may not seek damages.
FALSE
An installment contract is a single contract that requires or authorizes delivery in two or more separate lots to be paid for in one payment.
FALSE
Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal, but not that the goods be conforming.
FALSE
The seller's right to cure does not affect the right of the buyer or lessee to reject goods.
FALSE
Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again
FALSE
With an installment contract, a buyer or lessee can reject a single installment on any pretext.
FALSE
Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.
TRUE
If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.
TRUE
Revocation of acceptance is effective on notice to the seller or lessor.
TRUE
Tender must occur at a reasonable hour and in a reasonable manner
TRUE
Under the UCC, if a contract does not designate the place of delivery for the goods, the place of delivery is a location halfway between the seller's place of business and the buyer's place of business.
TRUE
Unless otherwise agreed, inspection of goods can take place at any reasonable place and time and in any reasonable manner
TRUE
Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.
TRUE
Until the time for performance under a contract expires, the seller has a right to cure.
TRUE
Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
a repudiation of the contract
Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Flat Bread's refusaul is
a repudiation of the contract.
Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships goods that do not comply. Quality Auto
can reject the entire shipment
Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that
conform to the contract description in every way.
Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are delivered in a damaged condition. Speedy's
may accept the shipment with a reduction in price.
Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits
may ship the strawberries to the buyer using a different carrier
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to
place the goods into the hands of a carrier.
Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time
Eventide learned of the breach.
Game Source Stores are open to consumers. The UCC requirement of good faith imposes
a higher duty on Game Source than on consumers
Soft Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
await performance, sue Soft, or suspend its own performance.
Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. This contract requires Pine Mills, the seller, to
deliver the goods to a particular destination
