Contracts/Sales Flashcards
The UCC applies to:
The sale of goods, which are all things movable at the time of identification to the contract for sale
July 2017
What may be used to interpret arguably ambiguous contract terms in a UCC contract?
In descending order:
1. Course of performance
2. Course of dealing
3. Trade usage
When may trade usage be used as a method of interpretation in a UCC contract?
Where those terms are generally accepted in trade usage and such terms should be reasonably understood by the parties
What is an installment contract?
A contract that authorizes the delivery of goods in separate shipments
When may a party reject non-conforming (e.g., late-delivered) goods in a shipment?
Only if the late delivery (or non-conformity) substantially impairs the value of the goods
When may a party cancel an entire installment contract based on a non-conforming shipment?
When the value of the entire contract is substantially impaired
What is required for a buyer to reject a shipment in an installment contract?
They must: (1) reject within a reasonable time after delivery; and (2) give seasonable notice to the breaching party
What damages is a buyer entitled to for rejection of non-conforming goods?
The difference between market value of the goods and K price PLUS lost profits
What is required to recover lost profits?
The seller must have reason to know of the lost profits that will be occurred by the buyer
What is a buyer’s duty when recognizing goods will be late or are non-conforming?
The buyer has a duty to mitigate by obtaining goods elsewhere and selling them (i.e., “cover”)
* Where seller continues to make assurance of delivery/fulfillment of K, cover not required
What is the warranty of title?
Any seller of goods warrants that the title transferred is good (arises automatically)
* If breached, put nonbreaching party in position they would have been in had breaching party not committed breach (i.e., value of sales K)
July 2015
What are a seller’s rights if they deliver goods to an insolvent buyer on credit?
Seller may reclaim the goods upon demand made within 10 days after the receipt
Virginia (does/does not) require written authorization of an agent, even when the underlying contracts falls within the statute of frauds
Does NOT (different from UCC)
Feb 2015
How are contracts to be construed when there is an ambiguity?
Against the party who drafted the contract
July 2016
What is the SOL for property damage for sales Covered by UCC?
4 years from accrual
July 2016
When does an action “accrue” for SOL purposes?
The date of injury or breach (not from time P discovered harm or reasonable person would have discovered)
* In breach of warranty, breach normally occurs upon tender of delivery; however, when it extends to future performance discovery of breach must await at time of performance
July 2016
What must a buyer do to notify seller of objections in sales contract?
Notify them that the transaction was “troublesome”
Feb 2017
When does a buyer accept goods?
When:
(1) After reasonable opportunity to inspect signifies that the goods are conforming or buyer will accept despite nonconformity
(2) Fails to make effective rejection, but acceptance does not occur until buyer has had reasonable opportunity to inspect
(3) Does any act inconsistent with seller’s ownership (but seller may ratify)
Feb 2017
May a buyer seek relief of revocation of acceptance and money damages in the same suit under the UCC?
Yes–no longer required to elect between remedies of money damages and revocation of acceptance
July 2018
When may a buyer revoke acceptance under the UCC for non-conforming goods that he has taken possession of?
If nonconfrmoity substantially impairs the value of the goods, acceptance was reasonably induced by difficulty of discovering nonconformity before acceptance (or by seller’s assurances to cure), and buyer gives notice within reasonable time after discovering nonconformity and before any substantial change not caused by existing defects
July 2018, Feb 2021
When is the right to revoke cut off by acceptance?
When:
1. After reasonable opportunity to inspect goods, buyer indicates to seller that goods conform or that they will keep goods even though they fail to conform
2. Fail to reject within reasonable time after tender/delivery or fail to seasonably notify seller of rejection OR
3. Do any act inconsistent with the seller’s ownership
July 2018
What MUST the buyer do when he discovers a breach?
Notify seller within reasonable time after he discovers/should have discovered breach, or else barred from any remedy
July 2018
To whom does a warranty extend to in VA?
No need for privity; instead, warranty extends to one whom manufacturer/seller might reasonably have expected to use, consume, or be affected by the goods
July 2018
What damages is one entitled to for breach of implied warranty of merchantibility?
Expectation damages (difference b/w goods as warranted and accepted) plus incidental and consequential damages
* Can get cover if they haven’t accepted the goods
July 2018
