Breach Flashcards
What is Breach?
When the party has an absolute duty to perform, and does not perform or discharge the duty.
What are the two types of Breach?
Material (total) and Minor (partial)
What is a Material Breach?
A party has not received the substantial benefit of the contract.
What is a Minor Breach?
A party has received the substantial benefit of the contract.
What is the result of a Material Breach?
Non-breaching party may suspend performance and sue immediately.
What is the result of a Minor Breach?
Non-breaching party must perform his part of the obligations but may offset payment by the amount the Minor Breach caused.
What is Timeliness of Performance?
Failure to perform by the time stated
Is Timeliness of Performance a Material Breach?
No, as long as performance is rendered within a reasonable time.
What are the two conditions under which Timeliness of Performance is a Material Breach?
1) When both parties are aware that the nature of the contract makes timely performance essential 2) if the contract expressly states that “time is of the essence”.
What is the Perfect Tender Rule under the UCC?
Goods received must conform in every respect to what was ordered.
What three things may the buyer do under the Perfect Tender rule when the goods are non-conforming?
1) Reject the whole 2) Accept the whole 3) Accept any commercial units and reject the rest
What is a Seller’s Right to Cure?
Where the buyer has rejected non-conforming goods but the time for performance has not yet expired, the seller may notify the buyer of an intention to cure and the seller will then be allowed to cure within the contract time.
Under Seller’s Right to Cure, what if the buyer has rejected non-conforming goods that the seller reasonably believed would be acceptable?
The seller will have a further reasonable time to cure.
Under Acceptance and Rejection, what are the three conditions under which an Acceptance occurs?
The buyer 1) after a reasonable time to inspect, communicates to the seller that the goods are conforming or will take them in spite of nonconformity 2) fails to make an effective rejection 3) does any act inconsistent with seller’s ownership.
Under Acceptance and Rejection, what is a Rejection?
When the buyer notifies the seller that the goods are rejected.
What two elements are necessary under Rejection?
1) The buyer must reject the goods within a reasonable time after delivery or tender, and 2) the rejection must state with particularity the defect to justify the rejection.
When does a Rejection become effective?
When the buyer seasonably notifies the seller
What is a Buyer’s Right to Inspect?
Unless otherwise agreed, the buyer has a right before payment or acceptance to inspect all goods.
What is the one exception to a right of inspection before payment under a Buyer’s Right to Inspect?
If goods are delivered C.O.D
What is Payment By Buyer Before Inspection?
Whether by C.O.D or by the contract terms, payment before inspection does not constitute acceptance or impair the buyer’s right to inspect.
Under what two conditions is a Revocation of Acceptance effective?
A buyer may revoke acceptance of goods that substantially impair the value if 1) the buyer reasonably assumed the seller would cure non-conforming goods but the seller has not cured them, or 2) acceptance was because of the difficulty of discovery of nonconformity (or) by the seller’s assurances.
Under Revocation of Acceptance, how long does a buyer have to revoke acceptance?
A reasonable time after the buyer either 1) discovers the defect, or 2) should have discovered the defect.
When is Revocation of Acceptance effective?
When the buyer notifies the seller of the revocation
Does a revocation have the same legal effect as a rejection?
Yes