UCC Buyers & Sellers Remedies Flashcards
Insurable interest & Identification of Goods § 2-501
(1) The buyer obtains a special property and an insurable interest in goods byidentification of existing goods as goods to which the contract refers even though thegoods so identified are non-conforming and he has an option to return or reject them.Such identification can be made at any time and in any manner explicitly agreed to bythe parties. In the absence of explicit agreement identification occurs
(a) when the contract is made if it is for the sale of goods already existing andidentified;
(b) if the contract is for the sale of future goods other than those described inparagraph (c), when goods are shipped, marked or otherwise designated by the selleras goods to which the contract refers;
(c) within twelve months of contracting or the next harvesting season if the contract isfor crops or unborn animal
Process for transferring of title for a price
contract- form a contract
Identification - when the goods are sold or delivered
Risk of loss- generally the risk of loss of goods on the seller until perfect tender has occurred
The parties can craft their contract to provide for more specific allocations of risk of lossof goods during transport
F.O.B. and F.A.S. (”free on buyer” or “free alongside – risk of loss borne by seller untildestination listed after ”F.O.B.” or “F.A.S.”
C.I.F. or C&F (“cost insurance and freight” or “cost and freight”) – risk of loss andexpenses borne by seller until destination listed after “C.I.F.” or “C&F” term
Delivery “Ex-Ship” – Risk of loss passes to buyer once seller delivers goods free of”carriage liens” and pays for unloading
“No Arrival, No Sale” – Seller is excused from liability for breach if non-delivery occurssolely because of transportation hazards
Acceptance Period -Acceptance of goods occurs when the buyer
(a) after a reasonable opportunity to inspect the goods signifies to the seller thatthe goods are conforming or that he will take or retain them in spite of their non-conformity; or
(b) fails to make an effective rejection (subsection (1) of Section 2-602), but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or
(c) does any act inconsistent with the seller’s ownership; but if such act is wrongfulas against the seller it is an acceptance only if ratified by him. (seller can choose torecover goods if he prefers)
(2) Acceptance of a part of any commercial unit is acceptance of that entire unit.
Buyers right to inspection of goods
Unless otherwise agreed and subject to subsection
(3), where goodsare tendered or delivered or identified to the contract for sale, thebuyer has a right before payment or acceptance to inspect them at anyreasonable place and time and in any reasonable manner. When theseller is required or authorized to send the goods to the buyer, theinspection may be after their arrival.
(2) Expenses of inspection must be borne by the buyer but may berecovered from the seller if the goods do not conform and are rejected
Process of transfer of title
contract= inspection
identification=accept/
reject/revoke
risk of loss=notify seller
acceptance period=preserve goods
Manner and effect of rightful rejection
Rejection of goods must be within a reasonable time after their delivery or tender. It isineffective unless the buyer seasonably notifies the seller.
(2) Subject to the provisions of the two following sections on rejected goods (Sections 2-603 and 2-604)
,(a) after rejection any exercise of ownership by the buyer with respect to any commercial unit iswrongful as against the seller; and
(b) if the buyer has before rejection taken physical possession of goods in which he does not have asecurity interest under the provisions of this Article (subsection (3) of Section 2-711), he is under aduty after rejection to hold them with reasonable care at the seller’s disposition for a time sufficientto permit the seller to remove them; but
(c) the buyer has no further obligations with regard to goods rightfully rejected.
(3) The seller’s rights with respect to goods wrongfully rejected are governed by the provisions ofthis Article on Seller’s remedies in general (Section 2-703).
Buyers rights to goods on sellers repudiation failure to deliver or insolvency
(1) Subject to subsections (2) and (3) and even though the goods have not been shipped abuyer who has paid a part or all of the price of goods in which he has a special propertyunder the provisions of the immediately preceding section may on making and keepinggood a tender of any unpaid portion of their price recover them from the seller if:
(a) in the case of goods bought for personal, family, or household purposes, the sellerrepudiates or fails to deliver as required by the contract; or
(b) in all cases, the seller becomes insolvent within ten days after receipt of the firstinstallment on their price.
(2) The buyer’s right to recover the goods under subsection (1)(a) vests upon acquisition ofa special property, even if the seller had not then repudiated or failed to deliver.
(3) If the identification creating his special property has been made by the buyer heacquires the right to recover the goods only if they conform to the contract for sale
Buyers deduction of damages from the price
The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract.
Sellers incidental damgaes
Incidental damages to an aggrieved seller include any commerciallyreasonable charges, expenses or commissions incurred in stoppingdelivery, in the transportation, care and custody of goods after thebuyer’s breach, in connection with return or resale of the goods orotherwise resulting from the breach.All of Seller’s remedies include incidental damages less expenses saved
