Buyer's Remedies for Breach by the Seller

Question 1

2-301 says that…

Answer 1

the obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract.

a. Delivery means a physical turn-over of the goods.
b. Accept, in its simplest form, means the buyer takes the goods and keeps them without trying to return them.

Question 2

Transfer of title

Answer 2

Title to goods cannot pass under a contract for sale prior to their identification to the contract

Question 3

manner of identification of goods

Answer 3

Its when the seller knows which goods are part of the contract. Example: you order a computer from Apple, once they pull one off the rack fro you , that becomes the goods identified to the contract. Doesnt mean transfer of title has occurred.

Question 4

Unless otherwise explicitly agreed title passes to the buyer at the . . . .

Answer 4

time and place at which the seller completes his performance with reference to physical delivery of the goods. Title passes when you hand over the goods.

Question 5

Gap Filler on where you should receive title:

Answer 5

1. Unless otherwise agreed, the pickup place is the seller’s place of business.
2. Thus the seller’s requirement is more of a tender

Question 6

What does it take to tender?

Answer 6

Manner of seller’s tender of delivery:

Requires that seller put and hold conforming goods at the buyer’s disposition and give the buyer any notification reasonably necessary to enable him to take delivery. Manner, time and place for tender are determined by the agreement or default Article rules.

Question 7

Acceptance and Rejection

Answer 7

Buyer’s rights on improper delivery

Question 8

Whats usually causing a rejection?

Answer 8

Seller has either failed to properly tender delivery or there is something wrong with the goods themselves.

Common law places a great deal of emphasis on the materiality of the breach.

Question 9

Buyer’s rights on improper delivery

Answer 9

If goods or tender of delivery fail in any respect to conform to the contract (perfect tender rule), the buyer may…

Reject the whole
Accept the whole
Accept any commercial unit or units and reject the rest

Perfect tender rule may be contracted around.
in situations where it seems a buyer is using trifling or immaterial reasons to reject goods, courts usually look to duty of good faith to not allow such actions.

Question 10

Manner of Seller’s tender of delivery

Answer 10

Seller must put and hold conforming goods at the buyer’s disposition and give buyer any notification reasonably necessary to enable him to take delivery. Manner, time, place are determined by the agreement and by this article.

Tender must be at a reasonable hour.

Question 11

Cure by seller of improper tender or delivery

Answer 11

Where tender or delivery by seller is rejected because its non-conforming and time for performance has not yet expired, seller may seasonably notify buyer of his intentions to cure and may then within the contract time make a conforming delivery.

Where buyer rejects a non-conforming tender which seller had reasonable grounds to believe would be acceptable, the seller may, if he seasonably notifies the buyer, have a further reasonable time to substitute a conforming tender.

Question 12

What constitutes acceptance of goods?

Answer 12

After reasonable opportunity to inspect the goods signifies to seller that the goods are conforming.

Failure to make an effective rejection, but such acceptance does not occur until buyer has had a reasonable opportunity to inspect them.

Any act inconsistent with seller’s ownership

Question 13

Effect of Acceptance

Answer 13

Buyer must pay at the contract rate price for any goods accepted

Acceptance precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformance would be seasonably cured

Where tender has been accepted, buyer must, within a reasonable time after he discovers or should have discovered any breach, notify the seller of breach or be barred from any remedy

Burden is on the buyer to show breach with respect to goods accepted

Acceptance does not impair any other remedy in Article 2 for non-conformity

Question 14

Buyer’s damages for breach in regard to accepted goods

Answer 14

Where buyer has accepted goods and given notification, he may recover as damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner which is reasonable

Question 15

If buyer rejects the goods

Answer 15

manner and effect of rightful rejection

Must be within a reasonable time after delivery or tender. Its is ineffective unless buyer seasonably notifies the seller.

     a. must communicate that you are not going to keep the goods.
     b. if you do not timely notify, then you are deemed to have accepted.

After rejection a buyer cannot exercise ownership over the goods, Rejection whether rightful or wrongful, re-vests title back in the seller.
a. buyer then becomes a bailee of the goods

Question 16

Rightful Rejection

Answer 16

Buyer’s legal remedies in general

Where seller fails to make delivery/repudiates contract, or the buyer righfully rejects/justifiably revokes acceptances, then with respect to goods involved, and with respect to the whole if the breach goes to the whole contract, the BUYER MAY CANCEL and whether or not he has done so may in addition to recovering so much of the price as has been paid…

i. “cover” and have damages under the next section as to all the goods affected whether or not they have been identified to the contract, or
ii. Recover damages for non-delivery as provided in this Article.

On rightful rejection or justifiable revocation, a buyer has a security interest in goods in his possession and may hold such goods and resell them in like manner as an aggrieved seller.

Question 17

Cover

Answer 17

After breach within section 2-711, the buyer may cover by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller

Buyer may recover from seller as damages the difference b/w the cost of cover and the contract price together with any incidental or consequential damages, but less expenses saved in consequence of the seller’s breach.

Failure to cover does not bar buyer from any other remedy.