Performance, Breach, and Discharge

Question 1

Non-conforming goods

Answer 1

The UCC allows a buyer to accept or reject non-conforming goods in whole or in party. In either event, buyer can recover damages for breach - even if there was an accommodation

Question 2

Risk of Loss - hand delivery

Answer 2

If seller is a merchant, ROL is on seller until buyer takes possession

If seller is NOT a merchant, ROL is on seller until made available to buyer

Question 3

Risk of Loss - carrier delivery

Answer 3

“shipment and destination contracts”

Shipment contract (FOB seller) - default; ROL is on seller until goods taken to carrier

Destination contract (FOB _) - ROL is on seller until goods get to buyer

Question 4

Requirements Contract

Answer 4

If something interrupts deal but supplier acted in good faith, the supplier is excused

Question 5

Modification

Answer 5

CL modification requires consideration for valid modification

UCC only requires good faith

Modification can be oral or written (unless UCC clause prohibits oral modification)

Mutual modification - valid so long as its fair and reasonable in light of unforeseen circumstances

Question 6

Conditions - 3 Types

Answer 6

Condition Precedent - something must occur before contract to trigger obligation

Condition Concurrent - something must happen at same time as contract to trigger obligation

Condition Subsequent - something must happen after contract to trigger obligation

Question 7

Exceptions to Conditions

Answer 7

Waiver

Bad faith

Avoiding forfeiture

Question 8

Time (NOT) of Essence

Answer 8

Time is not of the essence unless a contract says such – if it does time is a condition

Question 9

Non-Conforming Goods

Answer 9

If buyer receives non-conforming goods, they may:

• completely reject (in reasonable time)
• completely accept (requires payment)
• partially accept/reject

If seller had reasonable grounds to believe recipient would accept non-conforming goods OR delivers non-conforming good before due date: seller can fix delivery if he gives notice to cure and delivers conforming goods in reasonable time

Question 10

Installment Contracts

Answer 10

If one shipment is non-conforming it does NOT constitute a total breach

Buyer can reject it but must give seller chance to cure if seller is capable

UNLESS it impairs the value of entire contract

Question 11

Impracticability

Answer 11

If unforeseen circumstances makes contract SO expensive or difficult to perform, a party can argue its impracticable – must be MAJOR unforeseen changes

Question 12

Impossibility

Answer 12

If contract is impossible for nayone to perform, obligation is discharged

EXCEPTIONS:
1) temporary impossibility
2) pre-preparation for setbacks (ex: bad weather)

Question 13

Frustration of Purpose

Answer 13

If purpose of contracts no longer exists, party can be discharged from performance

Question 14

Anticipatory Repudiation

Answer 14

Occurs when a party unequivocally refuses to perform before due date – other party can sue for breach immediately OR wait and see

Uncertainty is NOT unequivocal – party can demand assurances. If theres a response in reasonable time, the party must wait and see. If there is no response, the party can treat it as breach.

UCC requires assurances to be in writing and reasonable time for response is 30 days

Anticipatory repudiation can be retracted UNLESS: 1) party already sued, 2) party already accepted repudiation, or 3) party relied on repudiation