ch.23 Flashcards
What are the performance obligations of Buyers and Sellers in UCC Contracts?
Sellers are obligated to transfer and deliver conforming goods
Buyers are obligated to accept and pay for conforming goods in accordance with terms of contract
What other requirements are there?
Good faith required in performance and enforcement of every contract
What are Conforming Goods?
Goods that match the agreed upon goods in all material aspects.
What does Good Faith mean under UCC?
Honesty in fact
In transaction between merchants, the UCC also imposes obligation of reasonable commercial standards of fair dealing (commercial reasonableness)
What is the effect of not delivering Conforming Goods?
Perfect Tender rules say this is effectively a breach by Seller.
If goods or tender of delivery fail in any respect to conform to contract, buyer has right to:
- Accept the goods,
- Reject entire shipment, or
- accept part and reject part
Are there exceptions to the Perfect Tender Rule?
- Industry norms
- Past dealings between parties
- Agreement between parties
- Seller’s right to cure
- Excuse from performance when identified goods destroyed through no fault of parties
- Substantial impairment (as it relates to revocation of acceptance and installment
contracts) - Commercial impracticability
Are there situations where failure to delivery is not a breach?
Delay in delivery or nondelivery, in whole or in part, does not constitute breach if performance made impracticable because contingency has occurred that was not contemplated when parties reached agreement
Does the Buyer have obligations under UCC contracts other than payment?
- Buyers obligated to accept and pay for conforming goods in accordance with contract
- Buyers typically inspect goods to ensure agreement conformity
- The concept of reasonableness governs inspection process
- After inspection, buyer has option to accept, partially accept, reject, or revoke acceptance
The right to exercise particular options after inspection is governed by
UCC guidelines
