Breach & Remedies Flashcards

1
Q

What are RELIANCE damages?

A
  • Repay a party for expenses reasonably incurred in reliance on a contract or promise; and
  • Put the party in the same economic position that party would have been in had the contract or promise never been made.
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2
Q

Define BREACH (CL)

A
  • is non-performance of a contract after performance has come due.
    If performance has not yet become due, there cannot be a breach of contract.
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3
Q

What rules determine WHEN A BREACH BY ONE PARTY EXCUSES PERFORMANCE BY THE OTHER party?

A

CL follows - Substantial Performance test; and
UCC follows - Perfect Tender Rule

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4
Q

What is the PERFECT TENDER RULE?

A

For a seller’s obligation to be fulfilled, there must be delivery of perfect tender, that is delivery of goods that conform in all respects to the requirements of the contract.

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5
Q

What are the BUYER’S 3 Options if the tender is less than perfect?

A
  1. Reject all goods and sue for damages. On a rightful rejection of goods, a buyer is entitled to a return of any payments made for the goods. A buyer who accepts a tender of goods, whether conforming or non-conforming, becomes obligated to pay the seller the contract price of the goods, but if the goods are NON-CONFORMING, the contract price will be reduced by any damages for losses, resulting from the nonconforming shipment; OR
  2. Accept all goods and sue for damages; or
  3. Accept some goods and reject some goods.
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6
Q

When is a seller permitted to CURE a less than perfect tender?

A

The seller has the option to cure if:
- The time for performance has not yet expired. A seller may cure if the contract has a STATED DEADLINE which has not yet expired; OR

  • The seller had reasonable grounds to believe that less than perfect tender WOULD be acceptable. (reasonable grounds may arise from prior dealings between the parties.
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7
Q

Define INSTALLMENT sales contract

A

A contract that requires or authorizes multiple shipments in installments with
multiple payments.

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8
Q

When is a buyer permitted to REJECT AN ENTIRE INSTALLMENT CONTRACT?

A

A buyer can REJECT an entire installment contract only when:
- the non-conformity with respect to one or more installments SUBSTANTIALLY IMPAIRS THE VALUE OF THE WHOLE CONTRACT.

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9
Q
  • When may a buyer REVOKE ACCEPTANCE of GOODS?
A

May revoke even after accepting goods, if:
* A non-conformity SUBSTANTAILLY IMPAIRS THE VALUE OF THE GOODS.

*  The buyer's IGNORANCE of the non-conformity was EXCUSABLE (i.e. the defect could not be detected through ordinary inspection or the buyer reasonably relied on the seller's assurances of conformity); AND

* The buyer REVOKES WITHIN A REASONABLE TIME AFTER DISCOVERYING THE NON-CONFORMITY.
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10
Q

If a party FAILS TO PROVIDE NEEDED SPECIFICATIONS for a term left open under a contract for sale of goods, what are the other party’s options?

A

In the absence of receiving the required specification,
* The opposing party can begin to PERFORM IN ANY REEASONABLE MANNER, and ANY DELAY RESULTING FROM THE OTHER PARTY’S FAILURE TO SPECIFY WILL BE EXCUSED; OR

* If the time for performance has passed, the opposing party can treat the FAILURE TO SPECIFY as a breach in itself.

Example: Buyer fails to specify quantity needed for an installment under a requirements contract.

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11
Q
A
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