Repudiation/ Breach

rejection rules under perfect tender

- buyer must reject within a reasonable period of time, after they had reasonable time to inspect the goods - not effective rejection unless buyer gives reasonable notice either oral or written after a proper rejection the buyer cannot use goods and has to take reasonable care of them

how to accept goods under the perfect tender rule

- reasonable time for inspection and saying you accept - failure to reject creates default acceptance - exercising ownership over the goods - accepting part of a commercial unit is accepting whole unit - mere possession of goods does not automatically amount to acceptance of goods

CL vs UCC material breach vs perfect tender

Cl nonconformity has to rise to level of being material (if there is substantial performance the other party cannot walk away) UCC: non breaching party can walk away for nonconformity but subject to sellers right to cure

perfect tender rule

UCC version of material breach buyer can reject goods of seller if the quality, quantity, or delivery fo goods fails to conform precisely to the contract --> this trumps any claims to substantial performance which does not apply in UCC 2-601: - buyer can reject the whole or - accept the whole or - accept any commercial units and reject the rest buyer can reject nonconforming goods prior to acceptance but if there is still time left before performance is due the seller has the right to cure the defect

material breach

a breach can either be material or immaterial (substantial performance negates its materiality) material breach under CL has same effect as a condition, it relieves the non breaching party of their duty to perform and the non breaching party can walk away go to material breach when you cannot stand on a condition argument in absence of express or implied condition only if breach is material does it relieve a nonbreaching party of its duty to perform

retracting a repudiation

a party can retract this so long as other party has not canceled or materially changed positions or otherwise it is considered final

revocation of acceptance under the perfect tender rule

after acceptance you can no longer reject but you can revoke your acceptance if there is a substantial impairment (subjective and objective test) --> whether nonconformity will cause impairment of value to buyer and --> reasonable assumption of cure --> buyer has burden of showing substantial burden

repudiation/ breach

anticipatory repudiation (pre breach) - request for adequate assurance Material Breach vs Substantial performance perfect tender rule

anticipatory repudiation definition

definitive and unequivocal manifestation of intention on the part of the repudiator that he will not render the promised performance when time for it in K arises

test for material breach

facts and circumstances test: 1) extent to which injured party will be deprived of the benefit that he reasonably expected 2) extent to which injured party can be adequately compensated for the part of that benefit which he will be deprived 3) extent to which party failing to perform or to offer to perform will suffer forfeiture (did they substantially perform, will not compensating them unjustly enrich other party etc) 4) likelihood that party failing to perform or to offer to perform will cure his failure (can take account of all circumstances including reasonable assurances) dont need everyone of these factors, discuss the ones that apply to the fact pattern, then move to the counter of substantial performance, or include it under 3 if that makes more sense to you --> think about if what the party did goes to the heart of the contract and impairs the other party faith

(RFAA)

if non breacher sees that other party is going to anticipatory repudiate they must make sure it is a repudiation first through - need reasonable grounds to be sure UCC: request for adequate assurance must be in writing (CL does not require this) while waiting for response you have the right to suspend performance and it wont be considered a breach under the UCC there is a 30 day wait for a response under CL it is just a reasonable time --> if no response in set time, other party can consider the party to have repudiated

options for non breaching party under an ant. rep.

non breacher can: 1) wait until performance is due and then sue 2) resort to any remedy for breach immediately 3) suspend their own performance - renunciation of K by one party removes other parties duty to perform - does not make sense as policy to make party prepare to perform for k that is not going to happen (waste policy)

issue spotting for Ant. Rep.

one side making it known prior to time of performance that they are not going to perform their end of the deal (not an actual breach until performance

sellers right to cure

sellers right to cure after buyers rejection - can cure when: 1) if time performance has not yet expired 2) if time for performance has expired but seller believer she would have extra time to fix it

result of anticipatory repudation

the aggrieved party gets to walk away (like in a condition)

substantial performance

you still have a breach but it is not big enough to allow the other party to walk away, but non breaching party still required to fulfill their end of the deal and cannot walk away, but they can deduct damages