MGMT 402 Chapter 27

Part of Exam 3 (Final Exam)

complete performance

when a party to a contract fulfills its obligations exactly as specified in the agreement.

substantial performance

when a party substantially fulfills all of its contractual duties, leaving only minor obligations left undone

inferior performance

material breach; when a party fails to complete it’s contractual obligations

anticipatory repudiation

If one party informs the other party that it will not be performing its contractual duties, even though the time for performance has not yet arrived,

tender of delivery

when the seller holds the conforming goods for the buyer and informs the buyer that the goods are available to be picked up

perfect tender rule

provides a buyer the right to reject a shipment or partial shipment of imperfectly tendered goods.

nonconforming goods

When nonconforming, the buyer may accept all, reject all, or accept part and reject part

exceptions to perfect tender rule

if goods are badly damaged; if both parties enter a installment contract

buyer duties

inspect goods, accept goods or reject nonconforming goods, pay for accepted goods

duty to mitigate damages

a victim of a breach must take reasonable steps to curtail the harm it suffers as a result of the other party’s breach

limitation of liability clauses

limits amount that one party may recover after a breach of contract

compensatory damages

default remedy for all breach of contract cases and generally cannot be disclaimed by either party

consequential damages

allow non breaching parties to recover damages for the foreseeable consequences of the other party’s breach that go beyond compensatory damages

liquidated damages

a prior agreement as to the amount of damages for a given type of breach.

nominal damages

damages awarded when non breaching party can’t prove that they suffered any form of damages

restitution and recession

cancelling contract; putting back in place prior to cancelling contract

reformation

permits a judge to modify a contract so that it accurately reflects the true intentions of the parties

injunction

prevent the breaching party from doing something

specific performance

forces a breaching party to actually perform its contractual obligations instead of just paying money damages or providing restitution

Article 2 remedies for breach - buyer in possession of goods

sue for purchase price, get goods back and attempt to resell

Article 2 remedies for breach - seller in possession of goods

don’t ship goods, sell partially manufactured goods for scrap/salvage value, sell completed goods to different buyer

Article 2 remedies for breach - goods in transit

stop delivery

Article 2 remedies for breach - buyer remedies

specific performance, sue for damages, cover, and recover goods from seller