Performance of Article 2 Contracts

Question 1

What is perfect tender?

Answer 1

1) applies only to sale of goods
2) perfect tender does not mean the seller’s performance must be perfect, but that the goods and delivery conform to the contract terms
3) less than perfect tender by the seller generally gives the buyer an option of rejection of the delivered goods, so long as the buyer acts in good faith.

Question 2

B and S enter into a contract for 200 green widgets. S delivers 199 green widgets
and one yellow widget. Is that a perfect tender?

Answer 2

Does not conform, therefore not a perfect tender. Buyer has the right to reject the delivered goods.

Question 3

When can a buyer reject the goods?

Answer 3

If less than a perfect tender occurs.

Question 4

How can a rejection by the buyer be limited?

Answer 4

Through cure, installment contract, and acceptance.

Question 5

What is the buyer’s duty toward rejected goods?

Answer 5

To take reasonable care of the goods.

Question 6

When can a seller cure?

Answer 6

If the seller’s reasonable ground to believe it would be acceptable, perhaps with a money allowance (look toward past instances between buyer and seller). Or the time for performance has not yet expired.

Question 7

B and S enter into a contract for 2,000 green widgets. S delivers yellow widgets.
Previously, B had accepted widgets in colors different from what he had ordered.
After delivery, B rejects the widgets because they are yellow. Can S cure?

Answer 7

Not a perfect tender. Reasonable b/c B accepted other colors in the past without objection. S can cure.

Question 8

What is an installment contract?

Answer 8

FIRST do not confuse this with contract including installment payments.

An installment contract requires (i) delivery of goods in separate lots, (ii) to be separately accepted.

Question 9

When can a buyer reject the receipt of goods in an installment contract?

Answer 9

When there is a substantial impairment in that installment that can’t be cured. (e.g. a really bad wrong per Epstein’s words)

Question 10

What is the importance of acceptance?

Answer 10

If the buyer accepts the goods, it cannot later reject them.

Question 11

Is payment akin to acceptance?

Answer 11

Payment without an opportunity for inspection is not acceptance (think online sales)

Question 12

When must a buyer reject goods?

Answer 12

Rejection must be timely. Failure to reject after the buyer had a reasonable time to inspect is acceptance.

Question 13

What occurs if the buyer keeps the goods without objection?

Answer 13

Implied acceptance.

Question 14

What is the effect of a revocation of acceptance?

Answer 14

Same as rejection of the goods: buyer returns the goods and the seller
returns payments made. Remember that if a buyer accepts the goods, it
can NOT later reject the goods. In limited circumstances, a buyer can
effect a cancellation of the contract by revoking its acceptance of the
goods.

Question 15

What are the requirements for revocation of acceptance?

Answer 15

1) nonconformity substantially impairs the value of the goods, and
2) excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction, and
3) revocation within a reasonable time after discovery of nonconformity

Question 16

In July, B buys a sleeping bag from S. The contract provides that the sleeping bag
is insulated for temperatures as low as 10 degrees. B uses the sleeping bag for
various warm weather camping adventures throughout the summer. When B goes camping in October, she learns that the sleeping bag is not insulated for
temperatures as low as 10 degrees. Can B reject the goods?

Answer 16

This is acceptance, but she may revoke her acceptance b/c she meets the three requirements: 1. nonconformity substantially impairs the value of the goods, and

2) excusable ignorance of grounds for revocation or reasonable reliance on seller’s assurance of satisfaction, and
3) revocation within a reasonable time after discovery of nonconformity