Performance - Conditions Flashcards
What is the performance required at CL?
Substantial performance is the standard at CL.
What is the performance required in Art. 2 contracts?
Perfect Tender
Perfect Tender Rule
- only applies to sale of goods
- goods and delivery must conform to the K
- less than perfect tender by seller generally gives buyer the option of rejection
When does the seller have a right to cure?
A seller has the right to cure if:
- seller had REASONABLE grounds to believe goods would be acceptable OR
- time for performance has not yet expired
Can the buyer reject entire installment K if there is a breach in one installment?
ONLY where the breach, with the respect to the installment, substantially impairs the value of the entire contract
Is a failure of a condition a breach of contract?
NO. A failure of a condition just discharges the duty to perform.
What can excuse performance?
- Anticipatory repudiation
- Insecurity as to other party’s performance
- Improper performance
- Material breach
- Divisibility of contract
- Nonoccurence of an express condition
- Later contract rescinds
- Accord and Satisfaction
- Modification
- Novation
- Impossibility/Impracticability
- Subsequent Law or regulation
Can you retract anticipatory repudiation?
Yes, as long as the other party has NOT materially changed their position (or otherwise indicated that they consider the repudiation to be final).
The non-repudiating party may also demand assurances of performance before the duty to perform is reimposed.
Can seller cure after time for performance has expired?
- Very limited
- Statutory test is whether the seller had reasonable grounds for believing that the improper tender would be acceptable
- Look for information in question that deals with prior dealings between the parties such as an allowance
Notice Requirement for Rejection of Goods
- If buyer fails to state reasons for rejection they cannot rely on any unstated defect to justify it or to establish breach
1. If the seller could have cured the defect if he had been told about it, OR
3. Between merchants, when the seller has, after rejection, made a request in writing for a full and final written statement of all defects upon which the buyer proposes to rely
When has buyer accepted goods?
When, after a reasonable opportunity to inspect, indicates to the seller that
- The goods conform to requirements or
- That he will keep them even though they fail to conform, or
- When buyer fails to make effective rejection, or
- When buyer does any inconsistent act w/ seller’s ownership
**Once buyer accepts goods, he cannot later reject them
Revocation of Acceptance of Goods
In limited circumstances buyer can effect a cancellation of the K by revoking his acceptance of the goods
Requirements for Revocation of Goods
- Nonconformity substantially impairs the value of the goods to Buyer (substantial judged by reasonable person standard)
- Excusable ignorance of ground for revocation or reasonable reliance on seller’s assurance of satisfaction, and
- Revocation within a reasonable time after discovery of nonconformity and before any substantial change in condition of the goods not caused by their own defects. (Normal wear and tear ok)
ex. B buys sleeping bag warranted for temps as low as 10 deg. and uses it throughout summer. 3 months later goes camping in winter and learns bag is not insulated properly.
- Too late for rejection
- But could revoke acceptance
Buyer’s Payment Obligation
- Unless agreement for credit, buyer must cash or credit
- Seller can refuse the check, but if demands cash must give B reasonable time to get it before there would be a breach
If Buyer rightfully revokes acceptance, who bears risk of loss?
Seller to the extent of any deficiency in the buyer’s insurance coverage
ex. B purchases mobile home and 8 months later discovers latent cracks and notifies S that revoking acceptance. S says he will come out an inspect and see what can be done, but before inspection property is destroyed by fire.
- Because buyer rightfully revoked the risk of loss is on the seller to extent of any deficiency in insurance
