4. Performance of Article 2 Contracts

Question 1

Perfect Tender, explanation/elements:

Answer 1

1) Perfect Tender only applies to sales of goods.
2) Perfect Tender does not mean that the seller’s performance must be perfect, rather the goods and delivery must conform to the contract terms.
3) A less than perfect tender by the seller generally gives the buyer the option of rejection of the delivered goods, so long as in good faith.

Question 2

Rejection of Goods, important elements:

Answer 2

1) Distinguish rejection of an offer from rejection of the goods.
2) If the seller does not meet the perfect tender standard, the buyer has the option to retain and sue for damages or reject and sue
3) The buyer must take reasonable care of the rejected goods and should not continue to use rejected goods.
4) This rejection alternative is limited by cure installment contracts and acceptance.

Question 3

Cure, situations when available:

Answer 3

1) Seller’s reasonable ground to believe cure is available, usually based on previous contractual dealings, generally gives right to cure.
2) The time for performance has not yet expired.

Question 4

Installment Contracts, require or authorize

Answer 4

1) Delivery of the goods in separate lots 2) to be separately accepted.

Question 5

The buyer has the right to reject an installment ONLY where there is

Answer 5

a substantial impairment in that installment that can’e be cured.

Question 6

If a buyer accepts the goods,

Answer 6

it CANNOT later reject them

Question 7

A buyer’s payment without opportunity for inspection is

Answer 7

NOT acceptance.

Question 8

Rejection of goods must be timely. Failure to reject after the buyer has had

Answer 8

reasonable time to reject is acceptance.

Question 9

Implied Acceptance, via Retention

Answer 9

Look in fact pattern for indication of when the buyer receives the goods and an indication of when the buyer first complains to the seller.

Question 10

Revocation vs. Rejection

Answer 10

Revocation is essentially delayed rejection.

Question 11

Requirements for revocation of acceptance:

Answer 11

1) Nonconformity substantially impairs the value of the goods, and
2) Excusable ignorance of grounds for revocation OR reasonable reliance on seller’s assurance of satisfaction, and
3) Revocation within a reasonable time after discovery of nonconformity.