Contracts II Class 15: Law of Breach – Part II

These flashcards cover key terms and concepts related to the law of breach, specifically focusing on the rights and obligations of sellers and buyers in contract law as outlined in Article 2 of the UCC.

What are the Seller & Buyers Duties in Sale of Goods Contracts?

• Seller Performance: Promises to sell, ship conforming goods according to the contract specs.

• Buyer Performance: Promises to accept conforming goods and pay for them according to the contract terms.

Seller’s Nonperformance: How might a seller breach or repudiate the contract?

• Non-Delivery of Goods

• Fails to make a proper tender (Perfect tender Rule)

• Breach of Warranty

• Anticipatory Repudiation.

How might a buyer respond to a sellers nonperformance?

• Buyer Rejects (Perfect Tender Rule)

  • Rejection must occur within a reasonable time after delivery

  • But Seller might have cure rights.

• Buyer Accepts:

  • Can seek warranty damages if non-conforming

• Buyer Revokes Acceptance:

  • Must occur with reasonable time and before any substantial change in condition of the goods occurs.

• Cancellation

What is the Perfect Tender Rule (PTR)

• Seller must tender conforming goods.

• Substnatial performance is not enough. There must be perfect tender.

• Only applies to contract for a single sale.

  • Installment contracts are governed by UCC.

Does the buyer have the right to reject?

Yes, buyer has a right to reject nonconforming goods.

Rejection must occur within a reasonable time after delivery of goods.

Buyers can reject nonconforming goods if they notify the seller within a reasonable time after delivery.

What are Seller’s Cure Rights?

The seller's right to cure a defective tender within a reasonable time.

Section 2-601

The section of the Uniform Commercial Code that discusses the seller's obligation to deliver conforming goods.

Non-delivery of goods

A breach that occurs when a seller fails to deliver goods at all.

Breach of Warranty

A failure of goods to meet the guarantees made by the seller in terms of quality or performance.

Seasonably Notify

To inform the seller of rejection within a reasonable time to ensure lawful rejection.

Revoke Acceptance

The buyer's right to cancel acceptance of goods under certain conditions.

Section 2-606

The section allowing buyers to accept goods despite nonconformity.

Inspection Rights

Buyers' rights to inspect goods before acceptance and payment.

Substantial Performance

A legal concept indicating that a party has fulfilled enough of its contract obligations.

Section 2-608

The UCC provision governing the buyer's right to revoke acceptance based on nonconformity.

Reasonable Time

A period that is fair and appropriate under the circumstances for undertaking an action.

Contract for a Single Sale

A contract that pertains to the sale of goods that are delivered all at once.

Installment Contracts

Contracts that involve the sale of goods delivered in multiple lots or shipments.

Section 2-714

The section specifying a buyer's right to seek damages for breach of warranty.

Nonconforming Goods

Goods that do not meet the contract specifications or quality standards.