Exam 19: Performance and Breach

Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can

The right to cure reduces the risk of a breach of contract claim.

ABC Toy Store ordered one hundred board games from Big Board Games Inc. The games were delivered two weeks prior to the deadline, but they were all missing pieces. ABC rejected the shipment. To cure, Big Board Games must

Dairy Goods agrees to sell a certain quantity of ice cream to Event Caterers, but their contract does not specify the address at which the goods are to be delivered. The place of delivery is

In an installment contract, a buyer or lessee can reject an installment only if the nonconformity substantially impairs the value of the installment and cannot be cured.

Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 19-1. Flat Bread's refusal is

If a breach occurs when the seller or lessor is still in possession of the goods, the seller or lessor must still deliver the goods.

To effectively revoke acceptance, a buyer must return the goods within 30 days of the revocation.

Paper Company, Inc. agrees to supply Payroll Express with thirty reams of paper each month. Paper Company cannot reasonably ask Payroll Express to pick up the paper at

Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of parts located at Fuel Connector's place of business, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is

A shipment contract requires the seller to tender conforming goods at a particular destination.

Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits

Refined Mills orders "Grade A" oats from Sweet Valley Farms to grind and sell to Town Co-op Grocery. Sweet Valley ships "Grade B" oats, which Refined Mills accepts after a reasonable inspection believing it to be Grade A. Once Refined Mills discovers that the oats are Grade B, it

Tender can occur at any hour and in any manner.

If tender of delivery fails in any respect to conform to the contract, the buyer or lessee must accept or reject the entire shipment.

Payment on a contract can be made by any means agreed on between the parties.

Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 19-1. Enriched Flour can  pursue the following relief

H2O Company contracts to sell water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

Signal Sets Company contracts to deliver one hundred television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner's manager notices that some of the cartons have scrape marks. Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its " Grand Opening Sale " on May 15. Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.

An installment contract is a single contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately.