Breach

Question 1

what must be shown about the breaching party for a breach to occur? (2 things)

Answer 1

breach occurs if
1) the promisor is under an absolute duty to perform and does not perform, and
2) this duty has not been discharged (no excuse)

Question 2

what must be shown about the nonbreaching party for the breach to occur?

Answer 2

nonbreaching party must be willing and able to perform but for the breaching party’s failure to perform

Question 3

generally, when does a material breach occur at common law? (2 options)

Answer 3

when there is
1) no substantial performance (or no performance at all), or
2) nonbreaching party does not get the substantial benefit of the bargain

Question 4

what is a minor breach at common law?

Answer 4

when the obligee gains the substantial benefit of their bargain despite the obligor’s defective performance/breach

Question 5

what is the effect of a minor breach?

Answer 5

does NOT relieve nonbreaching party of their duty to perform BUT DOES give them damages for the minor breach

Question 6

what is the effect of a material breach?

Answer 6

nonbreaching party does NOT have to perform AND has an IMMEDIATE right to all remedies for the breach of the entire K (including total damages)

Question 7

true or false: failure to perform by the time stated in the K is generally NOT a material breach.

Answer 7

TRUE (so long as it’s within a reasonable time)

Question 8

when will failure to perform by the time stated in the K be considered a material breach?

Answer 8

ONLY when the K makes timely performance essential OR if the K expressly provides that “time is of the essence”
**NOTE = merely saying “time is of the essence” is NOT enough; need some evidence of reliance/negotiating on this point

Question 9

when will a buyer’s right to reject for imperfect tender of goods be cut off?

Answer 9

when they accept

Question 10

under article 2, a buyer accepts goods when… (3 options)

Answer 10

when
1) after a reasonable opportunity to inspect the goods, they indicate to the seller that the goods conform to requirements or that they will keep them even if they don’t,
2) they fail to reject within a reasonable time after tender or fail to notify the seller of their rejection, or
3) they do any act inconsistent with the seller’s ownership

Question 11

what is the buyer’s responsibility for goods after rejection?

Answer 11

must NOT treat them as if they own them and must instead hold them in reasonable care for a time sufficient to allow the seller to remove them

Question 12

if the seller gives no instruction on how to return rejected goods, what are a buyer’s options? (3)

Answer 12

buyer can
1) reship the goods to the seller,
2) store them for the seller’s account, or
3) resell them for the seller’s account in a public or private sale after giving the seller reasonable notice of the intent to resell

Question 13

if a buyer validly resells rejected goods, what are they entitled to from the seller?

Answer 13

entitled to recover expenses and reasonable commission

Question 14

under article 2, when may a buyer revoke their acceptance (acts as a rejection)? (2 rqmts)

Answer 14

buyer may revoke acceptance if…
1) the goods have a defect that substantially impairs their value to the buyer, and
2) either they…
- accepted the goods on reasonable belief that the defect would be cured and it has not been, or
- accepted the goods because of the difficulty of discovering the defects or because of the seller’s assurances that they conformed to the K

Question 15

at what time must revocation of acceptance occur to be effective? (2 rqmts)

Answer 15

must occur
1) within a reasonable time after the buyer discovers or should have discovered the defects, and
2) before any substantial change in the goods occurs that is NOT caused by the defect

Question 16

what are the 2 general exceptions to the perfect tender rule?

Answer 16

1) seller’s right to cure for single delivery Ks
2) installment contracts

Question 17

how does a seller exercise their right to cure within time for performance?

Answer 17

if the buyer has rejected goods because of defects, the seller may within the time originally provided for performance, “cure” by
1) giving reasonable notice of their intention to do so, and
2) making a new tender of conforming goods that they buyer MUST accept

Question 18

how does a seller exercise their right to cure beyond the original K time?

Answer 18

if the buyer rejects a tender of nonconforming goods that the seller reasonably believed would be acceptable, the seller – upon reasonable notice to buyer – has a further reasonable time beyond the OG K time within which to make a conforming tender
**NOTE = absent reasonable belief by seller, they CANNOT cure beyond K time

Question 19

when will a seller be found to have a reasonable belief that the tender would be acceptable? (2 options)

Answer 19

when the seller can show that either
1) trade practices or prior dealings with the buyer led the seller to believe that the goods would be acceptable, or
2) the seller could not have known of the defect despite proper business conduct (ie – packaged goods purchased from a supplier and then sold to buyer)

Question 20

when can an installment be rejected? (exception to perfect tender rule)

Answer 20

ONLY when the nonconformity
1) substantially impairs the value of that entire installment, and
2) cannot be cured
**NOTE = more similar to common law rule of substantial performance

Question 21

when will a WHOLE installment K be considered breached due to nonconforming goods?

Answer 21

ONLY when the nonconformity substantially impairs the value of the ENTIRE contract