Exam 16: Breach and Remedies in a Sales Transaction

Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. SS gets word from a viable source that UF has had trouble paying its suppliers. If UF repudiates before August 1 (e.g., by failing to assure SS it has the capacity to pay or by failing to pay upon delivery), UF will __________ of the contract.

The UCC treats a __________ as a breach even if performance is due.

Upon the buyer's breach, the __________ has various options to pursue remedies that depend to some extent on whether the buyer has rejected the goods or accepted them.

Liquidated damages that are unreasonably low will not be enforced __________.

What types of remedies are available during a breach of contract?

T.T. Inc. creates and sells hats. The Local Ironworkers 452 have contracted with T.T. Inc to purchase 150,000 hats for $15,000 with a delivery date of July 1. Local Ironworkers 452 paid a $5,000 deposit upon signing the contract, with the remaining $10,000 balance due when the hats are delivered. In the contract, Local Ironworkers 452 specified that "time is of the essence due to a local union campaign." Local Ironworkers 452 has reason to believe from another local chapter that there was an issue in the hats arriving a day after an important rally. After requesting reassurances, T.T. Inc. fails to respond within 35 days. What may happen to T.T. Inc. if they fail to deliver the hats timely?

The UCC allows the seller more than one remedy as long as each remedy is __________ to help the seller recover damages.

Liquidated damages clauses will not be enforced if the amount is unreasonably high and works as a penalty.

Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. If UF breaches before accepting the goods, SS has the following options for remedies:

Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. SS gets word from a viable source that UF has had trouble paying its suppliers. SS may ask UF for:

The UCC provides the buyer with an option to take immediate steps by canceling the contract and purchasing substitute goods from another vendor, known as the right to __________, to continue business operations and minimize losses.

Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. If UF breaches before accepting the goods, SS has the following options for remedies:

The UCC is grounded in the principle that the law should encourage the completion of business transactions, it also defines what constitutes nonperformance, known as a __________, and provides relief for parties who acted in good faith and sustained damages through no fault of their own.

In an installment contract each lot must be accepted and paid for __________.

__________ damages are damages that the parties expressly define in the contract and agree will compensate the nonbreaching party.

The seller may breach the contract if he delivers nonconforming goods or goods that are not of the type described in the __________.

T.T. Inc creates and sells hats. The Local Ironworkers 452 have contracted with T.T. Inc to purchase 150,000 hats for $15,000 with a delivery date of July 1. Local Ironworkers 452 paid a $5,000 deposit upon signing the contract, with the remaining $10,000 balance due when the hats are delivered. In the contract, Local Ironworkers 452 specified that "time is of the essence due to a local union campaign." What must Local Ironworkers 452 do at this time:

The UCC allows the buyer to pursue __________ as long as each remedy is necessary to help the buyer recover damages.

A __________ primary duty is to deliver conforming goods to the buyer as stipulated in the contract. Conforming goods are goods that match what was bargained for in the agreement.

A seller may also incur __________ damages at any point due to the buyer's breach. These damages include expenses related to holding goods that were wrongfully rejected, shipping, and advertising for resale.