4. UCC Performance Issues

Question 1

Perfect Tender & Rejection of Goods

Answer 1

Under UCC, seller’s performance must be perfect with respect to goods delivered and manner of delivery.

o Seller of imperfect goods may be able to cure

Buyer’s options upon seller’s imperfect tender, buyer can either:
♣ 1. Keep retain goods delivered and sue for damages, or
♣ 2. Reject reject some or all goods and sue for damages
• Requirements: buyer who rejects goods must:
o 1. Notify seller of rejection in reasonable time
o 2. Hold rejected goods using reasonable care; and
o 3. Give seller reasonable time to arrange for removal of goods

If seller gives no info regarding removal, buyer can return goods to seller, store goods for seller or resell goods on behalf of seller (for sellers profit)

o Installment Contract:
♣ Rejection: buyer can only reject a delivery/installment if:
• 1. Defect substantially impairs the installment; and
• 2. Defect cannot be cured
♣ Rejection is limited to the defective installment, not the entire contract.
• Buyer can only cancel entire contract due to a defective installment if the installment substantially impairs the entire contract’s value.

Question 2

Perfect tender & Acceptance of Goods:

Answer 2

Under UCC, buyer does not officially accept until goods are delivered and she has opportunity to inspect and/or notify seller

Question 3

Perfect tender & Acceptance of Goods:

Acceptance of goods occurs if either:

Answer 3

♣ 1. Buyer confirms acceptance: buyer, after a reasonable opportunity to inspect goods, indicates to seller that goods conform or that she will keep them despite nonconformance
• Payment without an opportunity to inspect is not acceptance
• If buyer accepts goods, she cannot later reject them

♣ 2. Buyer is silent: buyer fails to reject or notify seller of rejection within a reasonable time (no more than one month)

Question 4

Perfect tender & Acceptance of Goods:

Revoking Acceptance

Answer 4

Buyer cannot reject after acceptance UNLESS unless she discovers a defect.

REQUIREMENTS:
Defect substantially impairs the goods’ value and either:
♣ Buyer accepted goods on the reasonable belief that defect would be cured and it has not been or
♣ Buyer was excusably ignorant of defect or reasonably relied on seller’s assurance that goods conformed.

Question 5

Perfect Tender & Seller’s Ability to Cure

Answer 5

♣ 1. Seller gives buyer notice of intent to cure and time for performance has not yet expired

♣ 2. Seller has reasonable grounds to believe nonconforming goods sent would be acceptable