Exam 18: Remedies for Breach of Sales and Lease Contracts

If the contracted-for goods or the seller's or lessor's tender of delivery fails to conform to a sales or lease contract in any way,the buyer or lessee has the right to reject nonconforming goods or improperly tendered goods and may (1)reject the whole,(2)accept the whole,or (3)accept any commercial unit and reject the rest.

Sustainable Earth Clothiers is a retailer who sells only natural fiber clothing made from fibers that are organically raised.Because of the store's heavy advertising that it sells only products made from organically raised fibers,it simply cannot sell any clothing that is not made from such fibers.Sustainable Earth buys 1,000 cotton shirts that are delivered and accepted after an inspection.Three weeks later it is learned that these shirts were made from cotton that was not organically grown.The market value of these shirts is unaffected by the fact that the cotton is nonorganic.Assuming that it is difficult to determine by observing the shirts that they were made from nonorganic cotton,which of the following is true?

The seller's or lessor's general obligation is to transfer and deliver the goods to the buyer or lessee.

Unless otherwise agreed,payment for goods must be in cash at the time of delivery.

A commercial unit is a unit of goods that commercial usage deems is a single whole for purpose of sale.

An adequate assurance of performance may be demanded:

In April,John goes to a dealer and special orders a car with delivery due on June 1.The dealer received a confirmation from the manufacturer on May 10 that the car would be delivered to the dealer on May 26.The confirmation showed that the car would have cruise control although John did not order cruise control.The salesperson decided to simply sell the car to John at the original contract price,thus giving him the cruise control free.When John went to pick the car up late on June 1,he refused to accept the car,explaining to the salesperson that it was to be given to his elderly mother,and his mother had difficulty using cruise control.What is true in this situation?

John needs a new car and goes to the local dealer for Worldwide Motors,a global car manufacturer.John negotiates a deal with the local dealer to buy a new midsize model,the Albatross,for $22,000.The dealer cost on this car is $19,000.John then decided against the Albatross and breached the contract.John had not yet made any payment to the dealer.Later the dealer then sold this car to another customer for $21,600.The dealer also incurred $200 in costs connected with John's canceled order.Assuming that the dealer can get as many Albatrosses as it wants,how much can it recover in damages from John?

The UCC statute of limitations provides that an action for breach of any written or oral sales or lease contract must commence within three (3)years after the cause of action accrues.

If one party to a contract has reasonable grounds to believe that the other party either will not or cannot perform his or her contractual obligations,an adequate assurance of performance may be demanded orally or in writing.

If a buyer accepts nonconforming goods,the buyer may not seek remedies against the seller.

Under the perfect tender rule,when a shipment of 10,000 identical products contains 15 nonconforming units,which ones can the buyer reject?

A seller or lessor cannot collect damages in addition to other remedies.

A seller or lessor has the right to cancel a contract if the buyer or lessee breaches the contract by rejecting or revoking acceptance of the goods,failing to pay for the goods,or repudiating all or any part of the contract.

If a party to a contract anticipatorily repudiates a contract,then:

Buyers and lessees may only accept delivery of a "commercial unit."

What happens when the goods identified to a contract are totally destroyed through the fault of neither party before risk of loss passes to the buyer?

Because acceptance of goods triggers the obligation to pay for them,acceptance can occur only by an affirmative statement of the buyer that the buyer has accepted the goods.

The right to replevy is the buyer's or lessee's right to recover goods from a seller or lessor who is wrongfully withholding the goods.

In noncarrier cases,unless otherwise agreed,where is the place of delivery for a sale of goods located at the seller's place of business?