Performance of Art 2 ks Flashcards
Performance of Art 2 ks vs common law
No issues of performance under CL—just have to do what required under the k. but if it’s for a sale of goods, need to follow UCC.
6 concepts of Performance of Art 2 ks
Perfect tender,
rejection limited by cure, installment ks, and acceptance
revocation of acceptance,
Performance of Art 2 ks: Perfect tender
3 things need to be known
a. Perfect tender rule applies only to sales of goods
b. Perfect tender means that the goods and delivery must COMPLETELY comply with k terms
Performance of Art 2 ks: Rejection
3 things you need to know
a. less than perfect tender generally gives the buyer the option to reject the goods so long as the buyer acts in good faith
i. huge price drop = sign maybe buyer not in good faith rejecting
b. buyer must take reasonable care of the goods and cannot continue to use the goods
c. the option of rejection because of a less than perfect tender is limited by the concepts of cure, installment ks and acceptance.
c. Steps to proper rejection
i. A buyer receiving nonconforming goods generally has right to accept all, reject all or accept any commercial units and reject the rest.
1. To properly reject, rejecting party must, within a reasonable time after delivery and before acceptance, reject the goods or notify the seller of the rejection.
Performance of Art 2 ks: Cure
Sometimes, seller who fails to make a perfect tender will be given a second chance—an option of curing. Seller DOES NOT ALWAYS have the opportunity to cure, and the buyer cannot compel the seller to cure.
a. Cure available when
1) seller had reasonable grounds to believe non-perfect tender would be acceptable, perhaps with a money allowance. look to past performance for seller reasonable belief.
2) time for performance hasn’t expired
Performance of Art 2 ks: Installment ks
a. Installment k REQUIRES or AUTHORIZES
1) delivery of the goods in separate lots
2) to be separately accepted
for buyer to reject– must be substantial impariment that cannot be cured
installment payment plan ≠ installment k
Performance of Art 2 ks: acceptance of goods and revocation of acceptance
if the buyer accepts the goods, it cannot later reject them. Failure to object = implied acceptance. Nontimely rejection = acceptance.
b. Payment without opportunity for inspection is not acceptance.
In limited circumstances, a buyer MAY cancel by revoking an acceptance.
b. Requirements for revocation of acceptance
1) nonconformity = substantial impairment of value of the goods
2) reason you didn’t see the defect bfore or you reasonably relied on the seller’s assurances of satisfaction
AND
3) revocation within reasonable time of discovering nonconformity.
For ex, sleeping bag k that bag is ok for temps as low as 10 degrees, but buyer only finds out sleeping bad is not good for low temps. bought in summer and found out in winter.
a. nonconformity that is SUBSTANTIAL impairment
b. reason for not seeing defects earlier
c. revocation as soon as problem found.
Buyer’s options if seller fails to make perfect tender (must first reject properly)
i. keeping goods and suing for damages
ii. or sending the goods back, recovering payments made and possibly suing for damages
iii. After rejecting goods in possession, buyer has obligation to hold them with reasonable care at seller’s disposition and to obey any reasonable instructions as to rejected goods.
1. If seller gives no instructions, buyer may
a. Reship goods to seller,
b. Store them for seller’s account
c. Or resell them for seller’s account
i. If buyer resells, she is entitled to recover her expenses and a reasonable commission.
