Contracts 5: Performance of the Contract

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  1. What is the PERFECT TENDER RULE? To what does it apply?
    If tender is not perfect, buyer may REJECT the goods.

    It applies to Article 2 Sale of Goods.
  2. What is the OPTION TO CURE? To what does it apply?
    A seller who fails to make perfect tender MAY have an OPTION to cure.

    It applies to Article 2 Sale of Goods.
  3. (Article 2 SOG)

    When does a seller has an OPTION TO CURE?
    When time for performance has NOT expired.


    When time for performance HAS EXPIRED, but the parties' PRIOR DEALINGS indicate that buyer had been flexible about accepting non-conforming goods.
    It requires or authorizes delivery in separate installments.
  5. In an Article 2 SOG contract, may buyer reject an INSTALLMENT CONTRACT under the PERFECT TENDER RULE?
    NO. Buyer may reject only for SUBSTANTIAL IMPAIRMENT.
  6. What is IMPLIED ACCEPTANCE? When does it apply?
    When buyer keeps goods after having an OPPORTUNITY to inspect them.

    It applies in Article 2 SOG contracts.
  7. What are the consequences of a buyer's acceptance of goods (article 2 SOG)?
    Buyer may not REJECT the goods but can still get DAMAGES.
  8. Can a buyer REVOKE acceptance of goods?
    Generally, NO.

    EXCEPTION: if the non-conformity SUBSTANTIALLY IMPAIRS the value of the goods AND was DIFFICULT TO DISCOVER (i.e., a latent defect).
  9. What are buyer's remedies upon a rightful rejection/revocation of acceptance of goods (article 2 SOG)?
    • Return: buyer can return the goods to seller at seller's expense
    • Refund: buyer can get back any money buyer has paid for the goods
    • Damages: buyer can get damages from seller for breach of contract
  10. May a seller REFUSE a check (as a payment made by the buyer) in an Article 2 SOG transaction?
    YES--however, buyer has a REASONABLE time to meet seller's demands even if contract deadline has passed.
  11. Is there an analogy to the PERFECT TENDER RULE in COMMON LAW contracts?
    NO. Performance does not have to be PERFECT.

    SUBSTANTIAL PERFORMANCE is all that is required (i.e., a party cannot commit a MATERIAL breach).
  12. Do TIMING ISSUES constitute a material breach of performance under COMMON LAW?
    NO, unless the contract or the circumstances indicate that "time is of the essence."
Card Set
Contracts 5: Performance of the Contract
MBE Contracts Part 5 Performance of the Contract
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