Worksheet 14.3: Performance, Breach, and Remedies for Breach of Sales & Lease Contracts, Warranties, CISG

implied warranty

A warranty that the law derives by interfence from the nature of the transaction or the relative situations or circumstances of the parties

Sales contracts between parties residing in the United States and foreign countries typically are governed by the:

United Nations Convention on Contracts for the International Sale of Goods (CISG).

In the absence of any specific agreements, the buyer must make payment at the time and place the contract is signed.

false

The UCC generally does not prevent warranties to be disclaimed or limited.

false

When one party has a reasonable belief that the other party will not perform, the first party may request immediate performance, even if the deadline has not yet come for performance.

false

Statements that create express warranties may include statements that the goods conform to any (declaration that something is true) of fact or that the seller or lessor makes to the buyer or lessee about the goods, that the goods conform to any of them, or that the goods conform to any or model of the goods shown to the buyer or lessee.

affirmation promise description sample

The general rule regarding the warranty of good title in most sales contracts is that the warranty:

arises automatically in most sales contracts

Tender of delivery must occur_________ and in a __________ .

at a reasonable hour reasonable manner

Acceptance may be demonstrated after a reasonable opportunity to inspect the goods when the buyer or lessee indicates, by words or conduct, to the seller or lessor that the goods are or that he or she will them in spite of their nonconformity, OR the buyer or lessee to reject the goods within a period of time, OR in sales contracts, the buyer will be to have accepted the goods if he or she performs any act with the seller's ownership.

conforming retain fails reasonable deemed inconsistent

When a buyer obtains substitute goods, or covers, the buyer can recover from the seller the difference between the of cover and the contract price or payments, incidental damages that from the breach, and consequential damages to for indirect losses such as lost resulting from the breach that were reasonably at the time of the contract formation.

cost lease resulted compensate profits foreseeable

Unlike remedies under the common law, remedies under the UCC are

cumulative

The Convention on Contracts for the International Sale of Goods (CISG) provides remedies that are:

similar to those in the UCC

Goods can be merchantable, but at the same time unfit for a particular purpose.

true

When anticipatory repudiation occurs, the nonbreaching party may (select 2):

treat the repudiation as a final breach by pursuing a remedy. wait to see if the repudiating party will decide to honor the contract.

In sales law, a warranty is an assurance or guarantee by the seller about the quality and features of the goods being sold.

true

The buyer must reject the goods within a reasonable amount of time after delivery of nonconforming goods and must notify the seller in a timely manner.

true

Unlike the UCC, the CISG does not apply to consumer sales.

true

implied warranty of merchantability

a warranty that goods being sold or leased are reasonably fit for the ordinary purposes for which they are sold or leased, are properly packaged and labeled, and are of fair quality. The warranty automatically arises in every sales or lease of goods made by a merchant who deals in goods of the kind sold or leased.

implied warranty of fitness for a particular purpose

a warranty that goods sold or leased are fit for a particular purpose. The warranty arises when any seller or lessor knows the particular purpose for which a buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods.

The basic obligation of a buyer in performing a sales or lease contract is to:

accept and pay for conforming goods in accordance with the contract.

For an express warranty to exist, a reasonable buyer would need to consider the promise or representation as a part of the:

design of the products (incorrect) basis of the bargain

The CISG provides that a contract may be formed even though an acceptance contains additional terms, unless the additional terms . The CISG provides that any additional terms related to payment, quality, quantity, price, or time/place of delivery be included in the contract.

materially alter the contract will not

Under the perfect tender rule, when a seller delivers nonconforming goods, a buyer:

may accept all, part, or none of the goods.

If the contract does not indicate where the goods will be delivered, then the place of delivery will be the seller's ____ of business, OR the seller's _____ , if the seller has no business location, OR the ______ of the goods, if both parties know at the time of _____ that the goods are located _________ other than the seller's business.

place residence location contracting somewhere

An opportunity for inspection is a condition to the right of the seller to enforce payment.

precedent

The seller or lessor has a right to attempt to cure a defect when delivery is rejected because the goods were nonconforming, AND the time for performance has not yet expired , AND the seller or lessor provides timely notice to the buyer or lessee of the intention to cure, AND the cure can be made within the contract time for performance.

rejected expired notice intention within

When the seller refuses to deliver, the basic remedies available to the buyer include the right to cancel, or , the contract; obtain goods that have been paid for if the seller or lessor is ; sue to obtain specific if the goods are unique or if damages are an remedy; buy other goods, or obtain , and recover damages from the seller; sue to obtain goods held by a third party, or replevy goods; or sue to obtain damages.

rescind a merchant,identified, (incorrect) performance inadequate cover adequate,cure (incorrect)

When the buyer breaches, and the seller has possession of the goods, the seller has the right to cancel, or , the contract, the goods and sue to recover damages, sue to recover the price or lease payments due, or sue to damages for the buyer's of goods.

rescind purchase,reject (incorrect) resell (incorrect) recover nonacceptance