UCC Performance Issues Flashcards
Upon rejection of the goods, what must the buyer do?
Upon rejection, the buyer must retain possession of the goods for a reasonable time so that the seller can reclaim them.
What may a seller do if the buyer wrongfully disposes of the rejected goods?
If the buyer wrongfully disposes of the rejected goods, the seller may sue the buyer for conversion to recover the fair market value of the converted property at the time of the conversion.
Perfect Tender of Goods
Under the UCC, goods must conform perfectly to the contract. Failure to provide such goods is a breach that, unless cured in the time remaining to perform, allows the buyer to reject or accept the goods in whole or in part.
What must a buyer do when he accepts the nonconforming goods?
When the buyer accepts the goods, the buyer must pay the seller the contract price of the accepted goods minus any damages incurred as a result of the breach—eg, damages incurred to cover (ie, purchase) substitute goods.
If goods do not conform perfectly to the contract, it is a ________ under the UCC.
If goods do not conform perfectly to the contract, it is a breach under the UCC. The UCC allows the buyer to reject or accept the goods in whole or in part. When the buyer accepts the goods, the buyer must pay the seller the contract price of the accepted goods minus any damages incurred as a result of the breach.
Seller can cure if:
- S gives B notice of intent to cure and the for performance has not yet expired (S must give B reasonable notice and deliver conforming goods.
- S had reasonable grounds to believe nonconforming goods sent would be accepted. (Reasonableness is based on S’s prior dealing with B and S will have additional reasonable time period to tender conforming goods).
* B cannot compel S to cure*
Buyer’s duty as to rejected goods:
A buyer must retain rejected goods for a reasonable time to allow the seller to reclaim them.
In the absence of other instructions, the buyer must sell the goods on the seller’s behalf if the buyer is a merchant, the goods are perishable, and there is no local agent to whom the goods can be returned.
