Buyer's Remedies

Question 1

What is the effect of acceptance of goods on a buyer’s remedies? Section?

Answer 1

Under 2-607, when a buyer accepts goods, he must pay the contract price and is precluded from rejecting the goods

Question 2

What happens if a buyer accepts goods with knowledge of a non-conformity?

Answer 2

Still precluded from rejecting the goods unless the acceptance was made on a reasonable assumption that the non-conformity would be timely fixed

Question 3

What are the notice provisions regarding acceptance of goods?

Answer 3

The buyer must notify the seller os soon as reasonable after discovery of a breach OR if the buyer is sued, the buyer must notify the seller after he receives notice of the litigation

Question 4

What are the two categorires of buyer’s remedies?

Answer 4

1. When the buyer has accepted goods that are defective and the buyer either cannot rightfully revoke acceptance or does not wish to do so
2. when the seller fails to deliver goods or the buyer either properly rejects the goods or properly revokes acceptance

Question 5

What are buyer’s general damages for breach as to accepted goods?

Answer 5

General damages are money compensation for damages that are the natural and probable result of a breach of the type of contract that governs the transaction/relationship. They may be recovered without any concerns about foreseeability. They do not need to be specifically claimed.

Question 6

What are the buyer’s special damages (AKA consequential damages) for breach as to accepted goods?

Answer 6

Special damages (AKA consequential damages) are the damages that arise as the result of the special facts and circumstances of the specific transaction. Special damages may be recovered only where they were foreseeable to the breaching party at the time of contracting.

Question 7

With special damages, the parties make a . . .

Answer 7

decision at the moment of contract who is going to take on specific risks.

Question 8

For breach of warranty, the buyer may recover . . . (section?)

Answer 8

the loss resulting in the ordinary course of events from the seller’s breach as determine in any reasonable manner. 2-714(1).

Question 9

What is the usual measure of damages for breach of warranty? Section?

Answer 9

Damages = value goods would have been if they had been as warranted – the value of the goods accepted (2-714(2)) (plus, any incidental and consequential damages under 2-715)

Question 10

What is the effect of repairs on a damage calculation for accepted goods/ breach of warranty?

Answer 10

If it is possible for the recipient to repaid the goods to bring them up to the level they would have been, then the cost of repairs is the damages. If the repairs do not bring it up to the original value it should have been, damages are the cost of repairs PLUS the difference in value.

Question 11

What are generally the two calculations for buyer’s general damages where the seller fails to deliver or buyer rightfully rejects/revokes acceptance?

Answer 11

1. Difference between the market price of the goods at the time the buyer learned of the breach, minus the contract price (2-713)
2. If buyer covers in good faith and commercially reasonable manner, can recover the cost of covering goods, minus the contract price.

Question 12

What is cover?

Answer 12

Purchasing a substitute good from another source

Question 13

How is market price defined? Section?

Answer 13

The price that existed at the time of the breach at the place where tender was to occur under the contract. 2-713.

Question 14

When does buyer have a right to specific performance? Section?

Answer 14

Buyer has right to specific performance where the goods are unique and in other proper circumstances. 2-716.

Question 15

When does buyer have the right of replevin?

Answer 15

Buyer has right of replevin for goods identified in the contract if after reasonable effort he is unable to cover or the circumstances reasonably indicate that such effort will be unavailing, or other circumstances in 2-716(3).

Question 16

What is a buyer’s rights to goods when partial payment has been made? Section?

Answer 16

Under 2-502, When the buyer has made at least partial payment for identified goods, the buyer can obtain the undelivered goods from the seller if:
* the seller becomes insolvent within 10 days of receiving the first payment from the buyer; or
* the goods were for family, personal, or household purposes, and the seller has repudiated or failed to deliver the goods as required by the contract.

To obtain the goods, the buyer must tender any unpaid portion of the price to the seller.

Question 17

What are a buyer’s incidental damages? Section?

Answer 17

• Expenses reasonably incurred upon inspection, receipt, care and custody, and transportation of goods the buyer rightfully rejects
• Any commercially reasonable charges, expenses, or commissions connected to effecting cover;
• Any other reasonable expense incident to the delay or other breach.

2-715(1)

Question 18

What are a buyer’s consequential damages? Section?

Answer 18

• Any loss resutling from general or particular requirements and the needs of which the seller at the time of contracting had reason to know and which could not be reasonably prevented by cover (or otherwise)
• May also include bodily injury ot property damage to the buyer that proximately resutls from the breach

2-715(2)

Question 19

Can consequential damages be excluded or modified? Section?

Answer 19

Yes, but only to the extent that it is not unconscionable. A contract that limits or waives consequential damages for bodily injury in cases of consumer contracts is prima facie unconscionable. 2-719(3).

Question 20

For the buyer, what damages are avialable for late performance where the buyer was to resell the goods?

Answer 20

If seller breaches by late performance, the buyer was to resell the goods, and the seller knew or had reason to know the goods were to be resold, the buyer can recover damages for reduction in market value of the goods between the time performance was due adn the time performance was rendered.

Question 21

What is a liquidated damages provision? Section?

Answer 21

Where the parties may negotiate terms providing for specific damages to be paid in the event of a breach, provided the amount is reasonable. 2-718.

Question 22

When is the amount of a liquidated damages provision “reasonable”?

Answer 22

The liquidated damages should not constitude a penalty.