Exam 20: Remedies for Breach of Sales and Lease Contracts

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.Later,the dealer 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 is allocated only 12 Albatrosses for the year and can get no more,how much can it recover in damages from John? Assume that John has not paid anything to the dealer.

If a seller requires cash as payment,the buyer must be allowed an extension of time to be able to procure the cash.

If a seller has delivered nonconforming goods that have been rejected by the buyer,the seller has a right to cure:

Unless otherwise agreed or circumstances permit,the seller must deliver all goods named in a contract in a single shipment.

When a party retracts an anticipatory repudiation,it means that the party:

Is the perfect tender rule too harsh? Why should a party be able to reject an entire shipment for a very minor nonconformity? Does this work against one of the main policies of the UCC,namely to encourage the formation and performance of contracts?

If a seller breaches a contract for the sale of goods and the buyer then acquires similar goods from another supplier,this is known as the right of:

If a contract does not expressly state where the delivery will take place,the UCC relieves the seller of any obligation to tender goods to the buyer.

Which of the following would constitute a valid acceptance of goods?

Fashion Futures is an upper end retail clothing store that specializes in clothing for aging baby boomers who don't want to admit that they are aging.Fashion futures entered into a contract to purchase 100 pairs of designer pants each month for the 2001 calendar year.The pants were to be delivered by the tenth day of each month.For the January order,Fashion Futures ordered 50 pairs of black pants and 50 pairs of navy blue pants.When delivered,the order contained 60 pairs of black pants,10 pairs of navy blue pants,and 30 pairs of olive green pants.The order was delivered late in the day on January 10.Fashion Futures is upset because the proper goods were not delivered.On January 12,Fashion Futures sent a letter to the supplier saying that it was keeping 20 pairs of the olive green pants and 20 pairs of the black pants,and rejecting all the others,including all the pants for the other 11 shipments.Discuss the legal issues likely to arise when the supplier objects to these actions.Assume that there are no contract provisions addressing any of the legal issues that might arise.

The seller can recover the purchase price for the goods only under certain circumstances,including which of the following situations?

Which of the following statements is not true regarding the buyer's right to cover?

Common provisions in contracts that modify the perfect tender rule include the following EXCEPT which of the following?

Liquidated damages under the UCC:

A buyer who agrees to C.O.D.payment terms continues to have the right to inspect goods before paying for them.

In a noncarrier contract for the sale of goods where the goods are held by a bailee,tender of delivery can occur upon the happening of the following EXCEPT which of the following?

Brittany runs a store called "Miatas Only" that sells parts and accessories for the popular Mazda Miata sports car.The store purchases parts and accessories from many manufacturers,but,as its name indicates,sells parts only for Miatas.The store received shipment of a large order from Worldwide Sportscar Accessories late on a Saturday afternoon.After a quick count of the boxes,the store accepted the shipment.The following week when stocking the items,the following problems were found with the order: 1.Some sheepskin seat covers were the wrong color.The store had ordered 50 of these in four different colors,but all 50 were black.The value of the seat covers was the same regardless of color. 2.The store had ordered 100 sets of floor mats with the name "Miata" embossed on them,but instead received 100 sets with "SLK" that were sized for the Mercedes-Benz sports car of that name.The Miata mats cost the store $60 per pair and can be sold for $90,whereas the SLK mats cost $70 and can be sold for $110. 3.The store had ordered 100 blankets embossed with "Miata" and received the blankets ordered,but without "Miata" embossed.The plain blankets cost $10 less and sell for $10 less. Can "Miatas Only" revoke its acceptance of these items?

An oil refiner in the United States contracts on April 1 with a broker to buy crude oil from a specific foreign country with delivery to be made on July 15.On June 15,civil war breaks out in the nation that is the source of the oil,disrupting most exports.The oil refiner immediately writes to the broker demanding assurance of performance,and gets no reply.In this situation,which of the following is true?

Why are there so many different options available to a nonbreaching party under the UCC in contracts for the sale of goods? Would it be better to limit the number of remedies so that a party contemplating whether or not to breach will be better able to predict the cost and consequences of a breach?

Seller contracts to deliver 25 vans to buyer on or before March 1.All the other terms to the contract are fixed.On January 2,the seller informs the buyer that the seller will not be able to deliver the goods as promised.The buyer immediately contracts with someone else for the vans.On February 1,the original seller informs the buyer that the vans will be delivered per the original contract.The buyer refuses to accept these vans,and the original seller sues.Discuss the most likely outcome to the suit,fully developing the legal rights of each party.