Performance of the Contract

Question 1

Perfect Tender Rule

Answer 1

Under Article 2, if tender is not perfect, the buyer may reject the goods

NOTE: Perfect tender rule does not apply to installment contracts. Buyer can only reject an installment for substantial impairment.

Question 2

Options to Cure

Answer 2

Under Article 2, a seller who fails to make perfect tender may have an option to cure. It usually depends on whether the time for performance has expired.

• Time not expired –> option to cure
• Time expired –> no option to cure UNLESS seller, based on prior dealing with buyer, reasonably believed buyer would accept non-conforming goods

Question 3

Implied Acceptance of the Goods

Answer 3

When buyer keeps goods after having an opportunity to inspect them.

Question 4

Effect of Acceptance of the Goods

Answer 4

• Once buyer accepts goods, it’s too late for buyer to reject them, BUT a buyer who accepts can still get damages
• a buyer generally cannot revoke acceptance of goods
• A buyer CAN REVOKE ACCEPTANCE if the non-conformity substantially impairs the value of the goods AND was difficult to discover

Question 5

Consequences of Rejection/Revocation of Acceptance

Answer 5

(1) return at seller’s expense
(2) refund
(3) damages for breach

Question 6

Common Law Contracts & Imperfect Performance

Answer 6

• performance does not have to be perfect
• SUBSTANTIAL performance is all that is required (so not material breach)
• finishing late is not a material breach UNLESS the K or the circs indicate that time is of the essence