Exam 22: Performance and Breachapter of Sales and Lease Contracts

Under the United Nations Convention on Contracts for the International Sale of Goods, the measure of damages on a contract's breach normally includes foreseeable consequential damages.

If Basic Pipe LLC and City Construction Inc. state in their contract that repair or replacement is the exclusive remedy, then it is-even if Basic is unable to repair a defect or replace a defective part.

The parties to a sales contract can limit or exclude consequential damages for any commercial loss-such as a business's lost profits or property damage.

Under the UCC, because a contract for the sale of six display counters does not designate where the goods will be delivered, the place of delivery is the buyer's place of business.

Motor Parts Inc. and National Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Motor ships goods that do not comply. National

In a sales contract, an agreed-on remedy is in addition to those provided in the UCC even if the parties expressly otherwise.

Tender can occur at any hour-for example, 2 A.M.-and in any manner-such as by a phone call to the buyer, allowing "fifteen minutes to pick up the goods."

When the goods delivered are not as promised, the measure of recovery in the buyer's suit for damages is the difference between the values of the goods as accepted and if they had been delivered as warranted.

The parties to a sales contract can vary their rights and obligations by agreement, but they cannot change the measure of damages.

Snee, a consumer, agrees to buy an exercise machine from Treadmills Inc. Their contract excludes consequential damages for personal injuries resulting from the use of the device. This exclusion is

Fuel Connectors Inc. agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is

To bring an action based on breach of warranty, a buyer or lessee has a certain limited period of time from the date of delivery to file suit.

Chair Company contracts to deliver a dozen suites of dining room tables and chairs to Furniture Store on May 1. On April 15, Chair tells Furniture that delivery will be delayed until June 1. Furniture may

Burgers Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule

If a breach occurs when the seller still possesses identified goods, the seller must nevertheless deliver the goods to pursue a remedy.

The obligation of commercial reasonableness underlies every sales and lease contract.

If contracting parties agree that defective goods will not be rejected if the seller or lessor can repair or replace them within a reasonable period of time, the perfect tender rule does not apply.

Under the perfect tender rule, a buyer or lessee has the right to insist on goods that conform to their contract in every detail.

If a seller fails to deliver conforming goods, the measure of recovery in the buyer's suit for damages is the difference between the contract price and the market price at the place of delivery at the time the buyer learns of the breach.

If, before the time for contract performance, one party communicates an intent not to perform, the other party can only wait to see if the repudiating party will decide to perform.