Performance

Question 1

For Article 2 sale of goods, how must performance be tendered?

Answer 1

Perfect Tender Rule: If tender is not perfect, buyer may reject the goods.

Question 2

For sale of goods, is there an option to cure?

Answer 2

A seller who fails to make perfect tender may have an option to cure. It usually depends on whether the time for performance has expired.

1. Time has not expired: seller has an option to cure before the time expires.
2. Time has expired: seller has no option to cure unless, based on prior dealings, fact show that the buyer had been flexible in the past in accepting non-conforming goods.

Question 3

What does the perfect tender rule not apply to?

Answer 3

Installment contracts: requires or authorizes delivery in separate installments. The PTR does not apply to installment contracts, so they are harder to reject. Buyer may reject only for substantial impairment.

Question 4

How can a buyer accept the goods?

Answer 4

1. Express Acceptance
2. Implied Acceptance: when buyer keeps goods after having an opportunity to inspect them. Tip: if there’s a long delay between receipt/complaint, look for implied acceptance.

Question 5

Can a buyer revoke their acceptance of goods? If so, how?

Answer 5

General rule: a buyer cannot revoke acceptance of goods.

Exception: if the non-conformity substantially impairs the value of the goods and was difficult to discover (i.e. it was a latent defect).

Question 6

What are the consequences of buyer’s rejection or revocation of acceptance?

Answer 6

1. Return: buyer can return the goods to seller at seller’s expense.
2. Refund: buyer can get back any money buyer has paid for the goods.
3. Damages: buyer can get damages from seller for breach of contract.

Question 7

What form can a buyer’s obligation to pay take?

Answer 7

A buyer can pay with a check, but the seller can refuse it. If the seller refuses it on the deadline of the contract, the buyer still has a reasonable time to get cash, even though the contract time has passed.

Question 8

What is the rule for performance with common law contracts?

Answer 8

Performance does *not *have to be perfect. Substantial performance is all that is required (i.e. a party cannot commit a material breach).