Chapter 16: UCC Remedies Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

anticipatory repudiation

A

one party or the other indicating an intention to not perform with regard to performance not yet due

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2
Q

if the forth coming breach would result in substantial impairment in value of the contract… (anticipatory repudiation)

A

-do nothing and wait (to see if breach actually occurs)
OR
-sue the other co. immediately for breach of contract
*co. that is getting screwed also has right to stop their own performance of the contract

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3
Q

can a breaching party of an earlier anticipatory repudiation retract?

A

generally yes (breaching party can change their mind)

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4
Q

when can a breaching party not take back their anticipatory repudiation?

A
  • the other party gave notice that the repudiation sent was final
  • the other party changed position in reliance on repudiation (they’ve purchased the goods elsewhere)
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5
Q

when can the seller withhold delivery and demand cash?

A
  • only when the buyer is insolvent
  • this can be done even if credit was extended to the buyer in the og contract
  • determining the buyer is insolvent (fact v. fiction) can be quite tricky though
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6
Q

when can the seller stop delivery of the goods?

A
  • if the buyer is insolvent (w/ respect to any size shipment)
  • as to other breaches by the buyer (failing to make prepayment, etc) (only available w/ respect to large shipments
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7
Q

improper stoppage by a seller is…

A

a breach of contract if delayed delivery results

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8
Q

if the delivery of goods has been stopped can the seller also sue the buyer?

A

yes! seller can still sue buyer for breach regardless of whether shipment could be stopped

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9
Q

when does seller have right to re-sell the goods?

A
  • upon any breach by the buyer, but must be accomplished in good faith and in a commercially reasonable manner
  • can be sold at public sale (auction) or private (negotiated) sale
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10
Q

what can the seller recover if they resell the goods?

A

the contract price less the resale price plus incidental damages

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11
Q

what does the seller have to do before reselling the goods?

A
  • give notice to the go buyer
  • general notice for negotiated sale
  • specific notice (time and place) for auction sale
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12
Q

when can the buyer reject the goods?

A
  • if the goods or tender of delivery fail to conform in any respect to the contract
  • title transfers back to seller whether or not rejection was rightful
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13
Q

what clause might eliminate the buyer’s right to reject the goods because of defects?

A

“as is” clause or other effective disclaimer

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14
Q

who does the risk of loss go to when goods are rejected?

A

remains on seller until the breach is cured or the goods are accepted by the buyer notwithstanding the breach

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15
Q

how does a buyer have to reject goods?

A
  • must occur w/in reasonable time
  • buyer must give seasonable notice to seller
  • buyer must thereafter hold the rejected goods with reasonable care
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16
Q

how are things different for merchant buyers when they reject goods?

A
  • a greater burden is imposed on merchant buyers who reject goods
  • merchant buyer must follow reasonable instructions from seller
  • if goods are perishable or threaten to decline in value speedily-a merchant buyer must attempt to sell goods for breaching seller if reasonable instructions are not received from seller regarding their disposition
17
Q

what can the buyer do if the seller does nothing with respect to the rejected goods?

A
  • buyer can store the goods, ship the goods back to the breaching seller, or resell the goods (all at seller’s expense)
  • if resold the buyer cannot keep profit (belongs to seller)
18
Q

when can the buyer revoke their acceptance of goods (previously accepted, now rejected)

A

-nonconformity must be substantial
AND one of the following:
-buyer accepted goods believing seller would cure and seller has not
-buyer accepted goods not knowing of the nonconformity because of difficulty of discovery
-buyer was assured by seller that nothing was wrong (And buyer let his guard down and accepted the goods)

19
Q

when can a buyer not revoke acceptance?

A

if acceptance was made with knowledge of nonconformity (unless buyer reasonable assumed nonconformity would be cured)

20
Q

what are some general rules about revocation?

A
  • it must occur within a reasonable time after buyer discovers (or ought to) of nonconformity
  • revocation is not effective until notice is given to seller
  • upon rightful (but not wrongful) revocation, title transfers back to seller
21
Q

who bears the risk of loss when revocation occurs?

A

the breaching seller (when revocation is rightful) to extent buyer lacks insurance to cover the loss that occurs

22
Q

how can the buyer recover from nonconforming goods?

A
  • purchasing sub. goods
  • damages - cover price less the contract price plus incidental and consequential damages
  • cover must occur in good faith and be reasonable
23
Q

what can the seller recover as litigation remedies?

A

full purchase price plus incidental damages

24
Q

when can the seller recover purchase price/damages?

A
  • if the buyer has accepted goods and fails to pay
  • the goods destroyed after risk of loss has passed to buyer (and seller hasn’t been paid)
  • of identified goods still int he sellers possession, if seller cannot resell
25
Q

what are the sellers litigation remedies for buyer’s non acceptance of conforming goods or other breach?

A
  • if goods are resold, seller recovers contract price less the resale price differential plus incidentals
  • if not resold, seller recovers contract price less mkt price plus incidentals
  • lost profits- the subsequent sale of the goods in the ordinary course by a merchant results in a lost sale when the goods are off the shelf
  • seller’s incidental damages
26
Q

replevin

A

court orders seller to deliver goods - this is technically different than specific performance but probs gets buyer to the same place

27
Q

buyer’s litigation remedies for seller’s non-delivery of goods:

A
  • if sub. goods have been purchased, buyer recovers cover price less contract price plus incidentals plus consequential damages
  • if sub. goods have not been purchased, buyer recovers mkt. price less contract price plus incidentals plus consequential damages
28
Q

If buyer has accepted the goods despite sellers breach:

A
  • buyer must give timely notice to seller to preserve remedies
  • buyer may recover loss determined in any manner reasonable
29
Q

buyer’s remedy for breach of an express or implied warranty:

A

entitled to measure of damages for breach of warranty - the difference at the time/place of acceptance btw the value of the goods accepted and the value they would’ve had if the had been warranted

30
Q

two types of consequential damages:

A
  • foreseeable losses

- breach of warranty losses

31
Q

foreseeable losses

A

those losses suffered by the buyer that the seller ought to have realized would result from the seller’s breach

32
Q

warranty losses

A

personal injury or property damage resulting from breach of warranty

33
Q

importance of buyer attempting to cover

A

buyer will not be able to recover consequential damages if they could have been prevented by cover and buyer failed to cover

34
Q

contractual limitation of remedies or right to recover consequential damages

A
  • language in the contract limits remedies available to the buyer- not valid if the limited remedy fails its essential purpose
  • language in the contract that limits the buyer’s right to recover consequential damages