UCC Performance Issues Flashcards
UCC perfect tender rule
seller’s performance must be perfect (100%) w/r/t goods delivered and manner of delivery
imperfect tender
seller sends defective/nonconforming goods
buyer’s options upon seller’s imperfect tender
buyer can either:
1. keep: retain (entire or in part) goods delivered and sue for damages
2. reject: some or all goods and sue for damage
NOTE: must be in commercial units
seller has right to cure imperfect tender w/in time for performance
rejecting goods
Requirements: buyer who rejects goods must:
1. notify seller of rejection in a reasonable time;
2. hold the rejected goods using reasonable care (not against seller’s interests), 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 (ie, for seller’s profit)
installment ks
where delivery of goods occur in separate lots over specified period
rejection of installment ks
Rejection: buyer can only reject a delivery/installment if:
1. defect substantially impairs the installment, and
2. defect cannot be cured (seller has chance to cure)
Limitations: rejection is limited to defective installment NOT entire k
- buyer can only cancel entire k due to a defective installment if it substantially impairs entire K’s value
acceptance of goods
buyer does NOT officially accept UNTIL goods are delivered and she has an opportunity to inspect and/or notify seller
NOT at payment
acceptance of goods occurs if either:
- buyer confirms acceptance
- buyer is silent
buyer confirms acceptance
buyer, after a reasonable opportunity to inspect goods, indicates to seller that:
1. goods conform or
2. she will keep them despite nonconformance, or
3. acts inconsistent w/ seller’s ownership
Inspection Opportunity: payment w/out opportunity to inspect is NOT acceptance
Due diligence: if buyer accepts goods, she cannot later reject them
buyer is silent
implied acceptance
* buyer fails to reject or notify seller of rejection w/in reasonable time
ET: usually w/in one month
Due diligence: if buyer accepts goods, she cannot later reject them
revoking acceptance exception
buyer cannot reject after acceptance unless she discovers a defect
revoking acceptance requirements
Requirements: buyer can revoke acceptance w/in a reasonable time after discovering a defect if:
1. defect substantially impairs good’s value + either:
* buyer accepted goods on the reasonable belief that defect would be cured and it has not been, or
* buyer was excusably ignorant of defect or reasonably relied on seller’s assurance that goods conformed
payment options
Cash: is king
Checks: are okay BUT seller can refuse
- BUT must give reasonable time to cash in check (like day of) UNLESS k says no checks
seller’s ability to cure
if buyer has notified seller of imperfect tender, seller may have an opportunity to cure w/in time for performance
seller’s ability to cure requirements
Requirements: seller can cure if:
1. seller gives buyer notice of intent to cure and time for performance has not yet expired
* seller must give buyer reasonable notice and deliver conforming goods
2. seller had reasonable grounds to believe nonconforming goods sent would be acceptable
* reasonableness is usually based on seller’s prior dealings w/ buyer
* Clock extends: seller will have additional reasonable time period to tender conforming goods
NOTE: buyer CANNOT compel seller to cure
