Ch. 16

What is the basic performance obligation of sellers and lessors?

To transfer and deliver conforming goods.

What is the basic performance obligation of buyers and lessees?

To accept and pay for conforming goods in accordance with the contract.

What is good faith?

the performance and enforcement of every contract.

• Good faith means honesty in fact.

Other than honesty in fact, the UCC imposes __________

Reasonable commercial standards fair dealing/reasonableness

What is the tender of delivery?

Requires the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable them to take delivery. 

What is the perfect tender rule?

Required the seller to deliver goods in conformity with the terms of the contract, right down to the last detail.

What are conforming goods?

Goods that conform to contract specifications.

What is the right to cure?

Sellers and lessors have the right to cure or fix problems with nonconforming goods. Includes repair, adjust, or replace defective or nonconforming goods as long as they give notice of the intent to cure within the contract time for performance.

What two options does a buyer have when goods are destroyed?

The buyer can inspect the goods and decide whether to (1) treat the contract as void or (2) ask the seller for a reduction of the contract price and accept the damaged goods.

What is commercial impracticability?

A delay in delivery or nondelivery, in whole or in part, is not a breach in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

What are warranties used for?

They impose certain duties on the seller/lessor, and if they fail to live up to these duties, they may be sued for breach of warranty. 

What is a implied warranty?

The warranty or guarantee is automatically part of the contract; the parties do not negotiate for it

What is a warranty of a title?

Assumes that the seller has good and valid title to the goods to transfer title free and clear of any liens

What is an expressed warranty?

Any description of a good’s physical nature or its use, in either general or specific circumstances, that becomes part of the contract.

What is an implied warranty of merchantability?

 The goods must be merchantable if they are fit for te purpose

What is an Implied Warranty of Fitness for a Particular Purpose?

When a seller/lessor knows (1) why the buyer/lessee is purchasing or leasing the goods in question and (2) that the buyer/lessee is relying on them to make the selection.

What is the issues around third parties and warranties?

 A person may indeed have a cause of action based on breach of warranty against the seller since seller’s warranties extend to the buyer’s household members and guests, any reasonable and foreseeable user and to anyone injured by the good.

What is a warranty disclaimer?

A statement that a seller or provider does not guarantee the quality, performance, or suitability of a product or service, essentially selling it "as is".

• If an implied warranty is to be disclaimed, the seller must do so in clear, unambiguous, conspicuous language, either orally or in writing.

What is the Magnuson–Moss Act?

If a seller decides to issue a written warranty for a consumer good (the seller is not required to do so), the seller must indicate whether that warranty is a full warranty or a limited warranty.

• This applies to any consumer good sold for more than $10.

What are the Remedies Available to Sellers and Lessors under the UCC?

1. Cancel the Contract

2. Withhold Delivery 

3. Resell or Dispose of the Goods

4. Sue to Get the Benefit of the Bargain

5. Stop Delivery

6. Reclaim the goods

What are the Remedies Available to Buyers and Lessees under the UCC?

1. Cancel the contract

2. Obtain Cover

What does it mean to cover?

Buyers and lessees are allowed to cover, or substitute, goods for those due under the sales or lease agreement.

What are consequential damages?

Damages for lost profits as long as these damages are not too speculative.

What are liquidated damages?

Damages identified before the breach occurs.

What is specific performance?

Requires the seller/lessor to deliver the particular goods identified in the contract.