Contract 39-45 Flashcards
Under the UCC Perfect Tender Rule, the seller must deliver conforming goods and the smallest non-conformity is a breach.
What are two exceptions to this rule?
Exceptions:
The seller has the right to cure in 2 situations: (1) If the time for performance has not yet expired, the seller can cure within the remaining time; (2) The seller had reasonable grounds that the non-conforming goods would be accepted.
Installment contracts: These contracts may only be cancelled if the installment is so defective that it substantially impairs the value of the entire contract.
Priority: HIGH
After the acceptance of goods, when may a buyer later revoke that acceptance?
IF:
The non-conformity substantially impairs the value of the goods; AND
Either the defect was difficult to discover (latent) OR the buyer accepted the goods on the reasonable assumption that the defect would be cured.
*If a buyer successfully revokes acceptance, he is entitled to return of the purchase price.
Priority: N/A
When does an Anticipatory Repudiation occur?
When a party unequivocallycommunicates that he is unable or unwilling to perform.
*A party that breaches may retract its repudiation and restore the contract UNLESS the aggrieved party has: cancelled, materially changed his position, or indicated that he considers the repudiation final.
Priority: HIGH
When an Anticipatory Repudiation occurs, what may a non-breaching party do?
Treat the contract as repudiated and sue for damages;
Treat the contract as discharged;
Wait until performance is due and sue when performance doesn’t occur; OR
Urge the party to perform.
Priority: HIGH
What is an Accord and Satisfaction?
An accord is an executory contract between the parties promising to relieve a party of his contractual obligations in return for a specific act.
Upon Satisfaction of that act, a person is excused from further performance under the contract.
Priority: Low
When is an Express Warranty created?
When:
A seller makes an affirmation of fact, promise, or description or provides a sample;
Which relates to the goods; AND
Becomes part of the basis of the bargain.
*Intent or direct words of “warranty” or “guarantee” are not required.
Priority: N/A
What is the Implied Warranty of Merchantability?
Requires that all goods sold by a merchant MUST be fit for their ordinary purpose. To disclaim the implied warranty, a merchant must do so expressly in a conspicuous writing.
*Merchant = person dealing in goods of the kind.
Priority: Medium
