Contracts: Article 2 Remedies

Question 1

UCC Article 2:
Seller’s Remedies:
Still have Goods

Answer 1

Sellers who still have the Goods:

• Identify goods to contract (can complete in-process)
• Withhold delivery & demand cash
• Cancel and/or rescind the contract. Notify. Proceed with remedies below
• Resell goods
  
  • reasonably commercial manner
  • give buyer notice private/public sale
  • sale conducted @ reasonable time & place
• Sue for Breach of Contract
  
  • (market @ tender - unpaid contract $)+ costs
• Retain Buyer’s Deposit

Question 2

UCC Article 2:
Seller’s Remedies:
Goods In-Transit

Answer 2

Goods are in-transit
Buyer is Insolvent:
- stop shipment and recover 10 days after delivery
- if misrepresented 90 days prior, no time limit
Buyer is not Insolvent:
- stop large shipments (cars, trucks, planes)
Stop shipment at any time
- don’t give document of title

Question 3

UCC Article 2:
Seller’s Remedies:
Buyer has Posession

Answer 3

• if buyer got goods on credit while insolvent, 10 days

- compensatory damages: purchase price + incidentals

Question 4

UCC Article 2:
Buyer’s Remedies:
Seller Fails to Deliver

Answer 4

Cancel & Rescind:
- restore both to original position
Cover:
- buy similar and recover difference in cost from seller plus incidental damages
Sue for Breach of Contract:
- lawsuit
- damages: (market $ @ Breach - contract $)+Incidental
Specific Performance
- only if goods are unique (cover not available)
- rarely used for land under UCC, often under CL
- rarely damages
Replevin
- seller refuses to tender delivery after goods identified
- file a suit requiring seller to give goods to buyer
- rare (no cover)

Question 5

UCC Article 2:
Buyer’s Remedies:
Non-confirming goods

Answer 5

Similar Options:

• cancellation
• cover
• breach of Contract
• replevin
• keep goods and recover difference in value

Question 6

UCC Article 2:
Buyer’s Remedies:
Buyer Accepts Non-confirming goods

Answer 6

• ** must give notice that goods are nonconforming***
• Recover ordinary damages
• Recover for breach of warranty (difference in cost plus incidentals)
• Deduction of damages from purchase price still due. Note “Payment in Full”

Question 7

UCC Article 2:
Buyer’s Remedies:
Liquidated Damages
Recovery of Payment

Answer 7

Liquidated Damages
- Parties agreed to predetermined amount of damages. amount must be reasonable
- if amount is a penalty it is void
Recovery of Payment
- buyer makes payment & becomes insolvent in 10 days, and goods are identified. Tender balance owed.

Question 8

UCC Article 2:

Limitations on Remedies

Answer 8

Contract Limitation
- limit or add other remedies to the contract
Installment Contract
- breach of an installment is not a breach of whole contract
- buyer’s remedies limited to that contract
Statute of Limitations
- file within 4 years of cause of action
- Parties can agree to lessen to period not less than one year
- breach of warranty, cause of action begins at tender of delivery