UCC Article 2

Question 1

Are installment contracts permitted?

Answer 1

Yes, they are permitted and regulated by the UCC, Article 2

Question 2

Can you reject a late installment shipment?

Answer 2

A late-delivered installment of goods can ONLY be rejected if the value of the shipment was SUBSTANTIALLY IMPAIRED by the lateness

(like if you ordered an installment of potting soil for summer and it arrived in November and you can’t sell it easily bc no one plants in winter)

Question 3

Is cover required when an installment shipment is late?

Answer 3

If the seller never talks to you? YES

If the seller keeps saying that they will be making the shipment soon and the contract will be fulfilled? NO

Question 4

What damages can a buyer receive for rejecting a shipment for lateness?

Answer 4

When lawfully REJECTING goods for being late, the buyer can recover the difference between the market value of the goods and the contract price, plus the lost profits as a result of the lateness.

Contract Price - Market Value of Goods + lost profits

Question 5

Is there a required time for performance of a contract?

Answer 5

If there isn’t a time for performance specified in the contract, then the contract must be performed within a reasonable amount of time (usually considered to be within a year)

Question 6

Are trade terms allowed to be used in goods contracts?

Answer 6

Parties to sales contracts may use terms that are generally accepted in trade usage, when such terms should be REASONABLY UNDERSTOOD by the parties

(so if someone is new to the business and this is their first contract, they may not know)

Question 7

Does the UCC, Article 2 apply to services contracts?

Answer 7

No, only goods contracts