Performance Issues in UCC Contracts

Question 1

Acceptance of goods occurs if either:

Answer 1

a) buyer, after reasonable opportunity to inspect the goods, indicates to a seller that goods conform or that he will keep them despite nonconformance
b) buyer fails to reject or notify seller within a reasonable time (no more than 1 month)

Question 2

If a buyer makes payment without an opportunity to inspect, it is

Answer 2

not acceptance

Question 3

If a buyer accepts the goods, he

Answer 3

cannot later reject them

Question 4

When can a buyer revoke acceptance of goods?

Answer 4

within a reasonable time after discovering a defect if the defect substantially impairs the good’s value and either:

a) buyer accepted goods on the reasonable belief that defect would be cured and it has not been, or
b) buyer was excusably ignorant of defect or reasonably relied on seller’s assurance that goods conformed

Question 5

If buyer has notified seller of imperfect tender, seller may have an opportunity to cure if….

Answer 5

1) seller gives buyer a notice of intent to cure and time for performance has not yet expired
2) seller had reasonable grounds to believe nonconforming goods sent would be acceptable (reasonableness based on seller’s prior dealings with buyer)(seller will have additional reasonable time period to tender conforming goods)

NOTE: buyer cannot compel seller to cure

Question 6

What is an installment K?

Answer 6

it authorizes or requires delivery of goods in separate lots

Question 7

Buyer can only reject a delivery/installment if:

Answer 7

1. nonconformity substantially impairs the installment
2. nonconformity cannot be cured
   - rejection is limited to nonconforming installment, not the entire K.

Question 8

When can a buyer cancel the entire installment K based on a nonconforming installment?

Answer 8

If that installment substantially impairs the value of the entire K.