UCC Performance Issues

Question 1

Perfect Tender & Rejection of Goods - Definition

Answer 1

Under UCC Ks, seller’s performance must be perfect with respect to the goods delivered and the manner of delivery

• Imperfect tender = seller sends defective/nonconforming goods

Question 2

Perfect Tender & Rejection of Goods - Buyer’s Options Upon Seller’s Imperfect Tender (Keep)

Answer 2

Retain goods delivered and sue for damages

Question 3

Perfect Tender & Rejection of Goods - Buyer’s Options Upon Seller’s Imperfect Tender (Reject)

Answer 3

Reject some or all goods and sue for damages

Requirements - Buyer who rejects goods must:

1) Notify seller of rejection in a reasonable time;

2) Hold the rejected goods using reasonable care; and

3) Give seller reasonable time to arrange for removal of goods

If seller gives no information regarding removal, buyer can return goods to seller, store goods for seller, or resell goods on behalf of seller (i.e. for seller’s profits)

Question 4

Perfect Tender & Rejection of Goods - Installment K

Answer 4

Where delivery of goods occurs in separate lots

• Rejection: Buyer can only reject a delivery/installment if:

1) Defect substantially impairs the installment; and

2) Defect cannot be cured

• Rejection is limited to the defective installment, not the entire K
• • Buyer can only cancel entire K due to a defective installment id the installment substantially impairs the entire K’s value

Question 5

Perfect Tender & Acceptance of Goods - Overall

Answer 5

Under UCC Ks, buyer does not officially accept until goods are delivered and she has an opportunity to inspect and/or notify seller

Question 6

Perfect Tender & Acceptance of Goods - Acceptance of Goods Occurs if Either . . . (2)

Answer 6

1) Buyer confirms acceptance
2) Buyer is silent

Question 7

Perfect Tender & Acceptance of Goods - Acceptance of Goods Occurs if Either (Buyer Confirms Acceptance)

Answer 7

Buyer, after a reasonable opportunity to inspect the goods, indicates to seller that goods conform or that she will keep them despite nonconformance

• Payment without an opportunity to inspect is not acceptance
• If buyer accepts goods, she cannot later reject them

Question 8

Perfect Tender & Acceptance of Goods - Acceptance of Goods Occurs if Either (Buyer is Silent)

Answer 8

Buyer fails to reject or notify seller of rejection within a reasonable time

Question 9

Perfect Tender & Acceptance of Goods - Revoking Acceptance

Answer 9

Buyer cannot reject after acceptance unless she discovers a defect

• Requirements: buyer can revoke acceptance within a reasonable time after discovering a defect if:
  1) Defect substantially impairs the goods’ value and either:

a) Buyer accepted goods on the reasonable belief that defect would be cured and it has not been, or

b) Buyer was excusable ignorant of defect or reasonably relied on seller’s assurance that goods conformed

Question 10

Perfect Tender & Seller’s Ability to Cure - Overview

Answer 10

If buyer has notified seller of imperfect tender (i.e. delivery of nonconforming goods), seller may have an opportunity to cure