Performance on Article 2 Contracts

Question 1

The Perfect Tender Rule only applies to . . .

Answer 1

The sale of goods.

Question 2

Perfect Tender means . . .

Answer 2

That the goods and delivery must completely comply with the contract terms.

Question 3

B contracts to sell S 200 green widgets to be delivered on Wednesday by Fed Ex. Is it a perfect tender if:

One of the 200 widgets is broken?

The 200 green widgets are delivered on Wednesday by UPS?

Explain

Answer 3

No and no.

Must completely comply.

Question 4

When can a less than perfect tender permit a buyer to reject the goods? In other words, what must be true of the buyer?

Answer 4

He must act in good faith

Question 5

If a buyer receives good in a less than perfect tender and wishes to reject, what two things must be true regarding his possession of the goods?

Answer 5

He must take reasonable care of them

He cannot continue to use them

Question 6

What three concepts limit the option of rejection b/c of less than perfect tender?

Answer 6

Cure

Installment contracts

Acceptance.

Question 7

B ordered green widgets from S to be delivered no later than 6/6. S delivers yellow widgets on 5/5. B notifies S that she is rejecting the yellow widgets. Can S cure? Explain.

Answer 7

Yes. She can make perfect tender by 6/6. The fact that she delivered early still provides her the opportunity to execute perfect tender.

Question 8

Can early improper delivery be cured?

Answer 8

Yes

Question 9

What test do we use to determine whether a seller has the option of curing after the contract delivery date?

Answer 9

Reasonable Grounds Test.

Question 10

B an S enter into a k 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? Explain.

Answer 10

Yes. The parties’ past dealings gave S REASONABLE GROUNDS for believing that the delivery of yellow widgets was ok.

Question 11

A _____ ____ REQUIRES or AUTHORIZES (i) delivery of the goods in separate lots (ii) to be separately accepted.

Answer 11

Installment Contract.

Question 12

When and only when can a buyer reject an installment under an installment k?

Answer 12

When there is a substantial impairment in that installment that cannot be cured.

Question 13

S and BRI enter into a k for the deliver of 100 pizzas at 1pm for each day of the bar review course, payment on delivery. One day, S delivers 99 pizzas at 1:05pm. Can BRI reject this installment? Explain.

Answer 13

No. Perfect tender rule does not apply to installment k. No substantial impairment here that cannot be cured.

Question 14

Once a buyer accepts goods, in what situation can he later reject them?

Answer 14

None. Cannot reject post-acceptance.

Question 15

If a buyer tenders payment, but has not yet had the opportunity to inspect the goods, is there acceptance?

Answer 15

No

Question 16

E buys a new hair replacement system from Bosley over the phone, using his credit card. His new hair has not yet arrived. Has Epstein accepted the goods?

Answer 16

No. Payment without the opportunity to inspect in not acceptance.

Question 17

When can failure to reject constitute acceptance?

Answer 17

When the buyer has had a reasonable time to reject, but has failed to do so.

Question 18

If a buyer keeps goods without objection, he has accepted through . . .

Answer 18

Retention.

Question 19

What are the three requirements for revocation of acceptance?

Answer 19

Nonconformity susbtantially impairs the value of the goods

Excusable ignorance of grounds for revocation OR reasonable reliance of seller’s assurance of satisfaction; and

Revocation within a reasonable time after discovery of nonconformity.

Question 20

In July, B buys a sleeping bag from S. The sleeping bag says it is fit for temperatures as low as 10 degrees. B uses the sleeping bag during warm weather initially. When B goes camping in December, she learns that the sleeping bag is not insulated for temperatures as low as 10.

Can B reject? Explain.

Answer 20

No. Once accepted, no rejection.

Question 21

In July, B buys a sleeping bag from S. The sleeping bag says it is fit for temperatures as low as 10 degrees. B uses the sleeping bag during warm weather initially. When B goes camping in December, she learns that the sleeping bag is not insulated for temperatures as low as 10.

Can B revoked her acceptance? Explain.

Answer 21

Yes. There was a defect that substantially impairs the value, she was excusably ignorant of the defect during the summer months, and she is revoking as soon as she discovers the nonconformity.