Contracts 4.txt

  1. Under the COMMON LAW, is a promisee entitled to PEFECT performance?
    NO—only SUBSTANTIAL PERFORMANCE (i.e., no material breach)

    Finishing a job late is NOT a material breach unless K or circumstances indicate that time is of the essence.
  2. Under UCC Art 2, is a buyer entitled to PERFECT performance?
    YES—If tender is not perfect, buyer may REJECT the goods.

    This means that the buyer can return the goods at the seller's expense, get a refund of money paid, and collect damages from seller for breach of contract.
  3. UCC ART 2: If a seller's tender of goods is not perfect, can the seller CURE?
    • Time NOT expired: Seller may cure by delivering conforming goods.
    • Time EXPIRED: Seller cannot cure, unless seller has a good faith belief from prior dealings that buyer would accept the nonconforming goods (flexible in the past).
  4. What is an INSTALLMENT CONTRACT? And does the perfect tender rule apply?
    • Installment Contract: requires or authorizes delivery of goods in separate installments.
    • Reject for Substantial Impairment: buy can reject only for substantial impairment—perfect tender rule does NOT apply.
  5. Buyer's ACCEPTANCE of Goods
    Implied acceptance when buyer keeps goods

    • 1) without objection, after having had a
    • 2) reasonable opportunity to inspect.
  6. Can a buyer REJECT goods after they've been accepted?
    • Cannot reject: after buyer accepts (might be able to revoke acceptance)
    • Damages: But, a buyer who accepts can still get damages (e.g., cover, market damages, loss in value)
  7. Can a buyer REVOKE acceptance of goods?
    • Generally NO: a buyer cannot revoke acceptance of goods
    • Exceptions: can revoke if buyer can prove both (i) SUBSTANTIAL impairment, and (ii) DIFFICULT TO DISCOVER (i.e., latent defect). Must revoke within a reasonable time of discovering defect.
  8. What CONSEQUENCES if buyer effectively rejects or revokes acceptance of goods?
    • RETURN: goods at seller's expense
    • REFUND: any money paid for goods
    • DAMAGES: for breach of contract (e.g., cover, market damages, loss in value)
  9. If a buyer accepts goods, what are his payment obligations?
    • CHECK: may pay by check, but seller doesn't have to take it
    • REASONABLE TIME FOR REFUSAL: if seller doesn't accept buyer's check, buyer has a reasonable time from refusal to get cash, EVEN IF payment is made and refused at the end of the last day for payment
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Contracts 4.txt