Breach (Module 7)

Question 1

When Breach of K Occurs

Answer 1

1) promisor is under an absolute duty to perform (has no defenses), and
2) the duty has not been discharged

Nonbreaching party must show they are willing and able to perform but for the breaching party’s failure

Question 2

Determining Materiality of Breach

Answer 2

In determining whether breach was major or minor courts will consider:
1. Benefit received by nonbreaching party
2. Adequacy of compensation to injured party
3. Extent of part performance by breaching party
4. Hardship to breaching party
5. Negligent or willful behavior of breaching party
6. Likelihood breaching party will perform remainder of the K

Question 3

Effect of Material and Minor Breach

Answer 3

Minor - nonbreaching party compensated but still has to perform

Material - nonbreaching party no longer has to perform + will be compensated

Question 4

Timeliness of Performance

Answer 4

• If time is of the essence (either expressly or by hte nature of the contract) then late performance is material breach
• Just saying “due on the 30th” does not make time of the essence and in that case still have rxble time to perform (but will be minor breach for late and prob have to compensate)

Question 5

Perfect Tender Rule (UCC)

Answer 5

If goods or their delivery fail to conform to the contract in any way, buyer can:
1) Reject all
2) Accept all
3) Accept any commercial units and rejects the rest

Question 6

Buyer Implied Acceptance (Perfect Tender Rule)

Answer 6

A buyer will have been deemed to accept (and can no longer reject any part) the goods after a reasonable opportunity to inspect, they:
- indicate to the seller the goods conform/will accept them even though they don’t conform
- fail to reject in a rxble time
- act inconsistently with the seller’s ownership (ex. painting a car)

Question 7

Buyer Responsibility for Goods Ater Rejection (Perfect Tender)

Answer 7

Buyer rejects but is still in possession, they must either comply with any rxble instructions sellever gave them in case of rejection, or if no instructions given:
- ship them back to seller
- hold onto them until seller can retreieve
- if seller will not respond with what they should do, buyer can resell teh goods and take from teh profit any expense occurred + rxble commission

Question 8

Buyer Right to Revoke Acceptance (Perfect Tender)

Answer 8

Can only revoke acceptance if:
1) there is a defect that substantially impairs value AND
2a) only accepted bc of rxble belief seller would cure OR
2b) defect difficult to discover/seller’s assurance good conformed

Must revoke:
- w/in rxble time once buyer discovers/should have discovered defect AND
- before any substantial change in the good occurs (that wasn’t a result of the defect)

Question 9

Seller’s Right to Cure in Single Delivery K’s (Perfect Tender)

Answer 9

• Cure by notice and new tender w/in time for performance, which the buyer MUST then accept
• if seller reasonably believed that the good conformed, but buyer rejected, then seller has furhter rxble time to cure byeond original contract time

Question 10

Seller’s Right to Cure in Installment K’s (Perfect Tender)

Answer 10

• one installment can only be rejected if the nonconformity substantially impairs the value of that installment and cannot be cured
• Whole K is breached only if hte nonconformity substantially impairs the value of the ENTIRE contract