Remedies Under UCC

Question 1

Non-Monetary Remedies

Answer 1

Buyer’s Non-Monetary Remedies:
1) Recover
2) Specific Performance
3) Replevin
4) Deduction

Seller’s Non-Monetary Remedies:
1) Refusal
2) Reclaim
3) Stop and Finish
4) Stop Delivery

Question 2

Monetary Remedies

Answer 2

Buyer’s Monetary Remedies:
1) Default
2) Cover
3) Accepted goods

Seller’s Monetary Remedies:
1) Default
2) Lost Volume Sellers
3) Action for Price
4) Resell

Question 3

Recover (Buyer’s Non-Monetary)

Answer 3

To be eligible to recover:
1) the buyer must have paid some portion of the purchase price;
2) the goods must have been identified to the contract; and
3) either the goods are consumer goods, or the seller becomes insolvent within ten days after the first installment of payment

Question 4

Specific Performance (Buyer’s Non-Monetary)

Answer 4

Specific performance may be decreed where the goods are unique or in other proper circumstances.

The decree of specific performance may include such terms and conditions as to payment of price, damages, or other relief as the court may deem just

Question 5

Replevin (Buyer’s Non-Monetary)

Answer 5

For the buyer to be eligible for replevin:
1) the goods must be identified to the contract
2) the buyer must demonstrate an inability to cover

Question 6

Deduction (Buyer’s Non-Monetary)

Answer 6

If the buyer provides the seller with notice that the buyer is activating deduction, the buyer may deduct any damages resulting from a breach of the contract from any amount still due and owning on the contract.

Question 7

Buyer’s Default Monetary Damages

Answer 7

The buyer’s calculation of damages is the difference between the market price and the contract price, plus any incidental or consequential damages, minus any expenses saved in consequence of the breach

Market Price
– Time - the time when the buyer learns of the breach
– place - the place of tender, but in cases of rejection or revocation the place of arrival

Question 8

Cover

Answer 8

To be eligible to cover, the buyer must
1) actually purchase substitute goods
2) in good faith
3) everything about the cover must be reasonable

If the buyer covers, the damage calculation is the difference between the cost of the cover and the contract price, plus any incidental and consequential damages, minus any expenses saved in consequence of the breach.

Failure of the buyer to cover does not bar the buyer from any other remedy (except for replevin and consequential damages)

Question 9

Accepted Goods Damages

Answer 9

Where the buyer has accepted goods and is not revoking his acceptance, the buyer may recover damages for any nonconformity of tender.

the calculation of damages is the difference between the value of the goods as warranted and the value of the goods as accepted, plus any incidental or consequential damages

Value Accepted - determined at the time and place of acceptance

Question 10

Buyer’s Incidental Damages

Answer 10

incidental damages resulting from the seller’s breach include costs the buyer incurs in an attempt to mitigate or preserve the status quo

Question 11

Buyer’s Consequential Damages

Answer 11

2(a) Damages - Consequential damages resulting from the seller’s breach include damages stemming from breach of a collateral agreement or lost profits from collateral agreements if the buyer proves:
1) foreseeability
2) reasonable certainty
3) causation
4) an inability to cover

2(b) Damages - consequential damages resulting from the seller’s breach include personal injuries or other property damages if the buyer proves causation

Question 12

Refusal (Seller’s Non-Monetary)

Answer 12

If the seller discovers the buyer is insolvent, the seller can refuse delivery except for cash.

Insolvent means
– having ceased to pay debts in the ordinary course of business other than a bona fide dispute
– being unable to pay debts as they come due
– when liabilities exceed assets

Question 13

Reclaim (Seller’s Non-Monetary)

Answer 13

If the seller discovers that the buyer has accepted goods on credit while insolvent, the seller may reclaim the goods upon a demand made within ten days after receipt of the goods.

But if the buyer has made a misrepresentation of insolvency to the seller in writing within three months before delivery, the seller may reclaim the goods without a temporal limitation

Question 14

Limitations to Reclaim

Answer 14

The rights of a seller to reclaim goods is subject to a good faith purchaser for value and buyers in the ordinary course

If a seller successfully reclaims the goods, the seller is barred from any other remedy concerning the goods reclaimed

Question 15

Identify

Answer 15

Following a breach or repudiation by the buyer, if the goods have not been identified to the contract, the seller may identify the goods to the contract

Question 16

Stop and Finish (Seller’s Non-Monetary)

Answer 16

When the seller is mid fabrication of the goods and the buyer breaches or repudiates, the seller may either stop the fabrication or finish the fabrication so long as the seller exercises reasonable commercial judgment for avoidable of loss.

Question 17

Stopping Delivery (Seller’s Non-Monetary)

Answer 17

If the seller discovers that the buyer is insolvent, the seller may stop delivery. For any other problem, the seller is entitled to stop the delivery if the shipment is big enough.

The seller will be cut off from stopping delivery when the buyer receives the goods, if a bailee who is not a carrier acknowledges to the buyer he is holding the goods at the buyer’s disposition, or the buyer receives the document of title.

To exercise the remedy of stopping delivery, the seller must provide notice to the bailee, but the seller must bear any costs associated with the stop of delivery.

Question 18

Seller’s Default Calculation

Answer 18

If the buyer breaches or repudiates, the seller’s calculation of damages is the difference between the contract price minus the market price, plus any incidental damages, minus any expenses saved in consequence of the breach.

Market Price - determined at the time and place of delivery

Question 19

Lost Volume Sellers

Answer 19

If the measure of damages provided by the default calculation would be inadequate to put the seller in as good of a position as performance would have done, then the measure of damages is the seller’s lost profits

Question 20

Action for Price

Answer 20

Where the buyer has failed to pay the price as it comes due, the seller may recover the price and any incidental damages if
1) the buyer has accepted the goods
2) the goods suffer a casualty after the risk of loss has passed to the buyer (but before acceptance
3) the seller is unable to resell

Question 21

Resell

Answer 21

If the buyer properly resells, the damages calculation will be the difference between the contract price and the resell price plus any incidental damages, minus any expenses saved in consequence of the breach

Question 22

Seller’s Incidental Damages

Answer 22

Incidental damages resulting from a buyer’s breach or repudiation of the contract include costs incurred by the seller stemming from an effort to mitigate or maintain the status quo