Sales 3 Flashcards
-712 (“Cover”; Buyer’s Procurement of Substitute Goods)
- After a breach by the seller,
the buyer may “cover”
by making in good faith
and without unreasonable delay
any reasonable purchase of goods
in substitution for those due from the seller. - The buyer may recover the cost of cover minus the contract price
together with any incidental
or consequential damages,
but less expenses saved due to the breach.
2-713 (Buyer’s Damages for Non-delivery or Repudiation)
- The measure of damages for non-delivery or repudiation by the seller
is the market price at the time the buyer learned of the breach minus the contract price
together with any incidental
and consequential damages,
but less expenses saved due to the breach.
1-305
The aggrieved party [should] be put in as good a position as if the other party had fully performed.
Seller’s Breach (Buyer’s Remedies when Buyer does not accept and/or have goods)
- Cover (2-712): cost of “cover” minus contract price
- Market Damages (2-713): market price minus contract price
- Specific Relief (2-716): specific performance OR
possession if goods are unique or in other proper circumstances
Plus incidental and consequential damages (1-3).
2-607(3) (Notice of Breach)
Where a tender has been accepted
the buyer must within a reasonable time after he discovers or should have discovered any breach
notify the seller of breach or be barred from any remedy.
Buyer’s Breach (Contract Price; 2-709)
- Contract price due if goods accepted by the buyer. (2-709(1)(a).) Acceptance of goods occurs when, after a reasonable opportunity to inspect the goods, the buyer fails to effectively reject them. (2-606(1)(b).)
- Contract price if goods are identified and the seller mitigates damages or shows that such effort would be unavailing. (2-709(1)(b).)
Plus incidental damages (1-2)
Buyer Breach (Seller’s remedy for buyer’s unjustified rejection of goods)
- Resale (2-706): contract price minus resale price
- Don’t resell (2-708(1)): contract price minus market price at time and place for tender
- Lost profits (2-708(2)): 1. Capacity to supply the breached units in addition to what it actually sold
2. Profitable to make both sales
3. Probably would have made 2nd sale absent breach
Plus incidental damages (1-3)
2-718 (Liquidated Damages: Criteria to measure reasonableness of liquidated damages clauses
- Anticipated or actual harm caused by breach;
- Difficulty of proving loss; and
- Difficulty of obtaining an adequate remedy.
2-609 (Right to Adequate Assurance of Performance)
When reasonable grounds for insecurity arise with respect to the performance, Seller may demand adequate assurance of due performance. When he receives that assurance, he may reasonable suspend performance. After receipt of a justified demand, failure to provide assurance within a reasonable time not exceeding thirty days is a repudiation of the contract.
2-610 (Anticipatory Repudiation)
When a party repudiates the contract, the aggrieved party may
a) await performance for a commercially reasonable time; or
b) resort to any remedy for breach; and
c) suspend performance.
2-615 (Impracticability Defense)
Performance is excused
- by the occurrence of a contingency;
- that has made performance impracticable;
- where the non-occurrence of that contingency was a basic assumption on which the contract was made; and
- the seller has not assumed the obligation.
Frustration of Purpose Defense
Performance may be excused
where the purpose or value of the contract has been destroyed
by an unforeseen event, not caused by either party,
and the risk is not allocated by contract.
Fraudulent Conveyance
A conveyance of goods made with intent to hinder, delay or defraud creditors is invalid.
There is a presumption of fraud where
a sale of personal property is not accompanied
by the immediate delivery
and the actual and continued change of possession by the seller
