Remedies for Buyers Flashcards
What is the Perfect Tender Rule under Article 2?
The buyer may reject goods or tender of delivery that fails to conform to the contract, rejecting all nonconforming goods or accepting some and rejecting the rest without losing remedies.
What are exceptions to the Perfect Tender Rule?
Exceptions include:
Shipment contracts: Rejection allowed only if material loss or delay results.
Commercially impracticable delivery forms: Rejection only if seller fails to use reasonable substitutes.
Installment contracts: Rejection of an installment or entire contract only if nonconformity substantially impairs value and cannot be cured.
Course of dealing/performance, trade usage, or party agreement.
What are the rules for proper rejection by the buyer?
The buyer must:
- Notify the seller of rejection within a reasonable time.
- Specify defects if ascertainable and curable.
- Hold goods for a reasonable time for seller to retrieve or make other arrangements.
What are the buyer’s responsibilities after rejection?
Buyers with a security interest in goods may sell them commercially and must account for excess proceeds.
Buyers without security interest may hold, store, reship, or resell goods.
When can a seller cure a defective tender?
If time for performance has not expired, the seller may notify the buyer of intent to cure and do so within the contract period.
What happens if the seller reasonably believed the goods would be acceptable?
The seller has an additional reasonable time to cure, even if the performance period has expired.
How does cure work for installment contracts?
The seller may cure within the installment period for nonconforming tenders.
What actions by the buyer constitute acceptance of goods?
- Signifying willingness to keep goods despite nonconformity.
- Failing to reject goods after inspection.
- Conduct inconsistent with the seller’s ownership.
What are the consequences of accepting goods?
- The buyer must pay the contract price.
- The right to reject is extinguished.
- The buyer must notify the seller of a breach within a reasonable time.
- The buyer bears the burden of proving breach after acceptance.
When can a buyer revoke acceptance of goods?
If the defect substantially impairs value and:
The buyer accepted on the belief the seller would cure the defect, but failed to do so.
OR
The buyer was unaware of the defect due to difficulty in discovery or seller’s assurances.
What are the requirements for timely revocation?
The buyer must notify the seller within a reasonable time after discovering the defect and before a substantial change in the goods occurs.
What are the remedies for nondelivery, rejection, or revocation of acceptance?
- Cancel the contract.
- Recover payments made.
3.Damages: Market price vs. contract price or cover price.
- Replevin: Specific goods identified in the contract.
- Specific performance: For unique goods.
How are damages calculated for accepted nonconforming goods?
Based on the loss in value or the cost of repair/replacement.
What must a buyer do if they discover a breach after accepting goods?
Notify the seller within a reasonable time or risk losing the right to recover damages.
