Exam 22: Performance Breach of Sales Lease Contracts

If, before the time for contract performance, one party clearly communicates to the other the intention not to perform, the other party must wait to see if the repudiating party will decide to honor the contract despite the avowed intention to renege.

Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a con?tract for a sale of lettuce. After Garden Field ships the lettuce but before Haute Gourmet receives it, the buyer declares bankruptcy. Garden Field can stop delivery of the goods in transit

Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact, but may not seek damages.

Under the UCC, the aggrieved party is not limited to one exclusive remedy.

Fact Pattern 22-B1 (Questions B18-B20 apply) Economy Bank issues a letter of credit in favor of Finish & Refining Company, a U.S. firm, to facilitate an international sales contract to buy resources from Global Mining, Ltd., a British company. -Refer to Fact Pattern 22-B1. In this letter of credit, the account party is

The parties to a sales or lease contract can expressly provide for remedies in addition to those provided in the UCC.

Energy Products Corporation and First Response Preparedness.com enter into a contract for a sale of portable generators. Under a destination contract, the seller must

If a buyer breaches a contract while the seller is still in possession of the goods, the seller can resell the goods and hold the buyer liable for any loss.

On May 1, Garage Prefabricators, Inc., agrees to sell four portable garages to Hiway Truck Service Center. Five days later, Hiway refuses delivery and cancels the contract. Garage Prefabricators is enti?tled to

Under a shipment contract, if the seller does not make a reasonable contract for transportation or notify the buyer of the shipment, the buyer can reject the goods if a material loss results.

Motor Vehicles Body Shops contracts to buy from Paint Supply & Equipment Headquarters, Inc., twenty-four spray paint guns at $30 each to be delivered by October 1. Paint Supply knows that Motor Vehicles Body Shops will use the guns to complete a special job by October 31 for a certain auto dealer. Motor Vehicles Body Shops expects to make $17,000 profit from the job. Paint Supply fails to deliver on October 1. Motor Vehicles Body Shops attempts to buy substitute spray guns, but must pay $40.00 for each and take delivery on October 15, cutting Motor Vehicles Body Shops' profits when the dealer arranges for some of the job to be done elsewhere. Motor Vehicles Body Shops sues Paint Supply. What is the measure of recovery?

In the absence of any specific agreements, the buyer or lessee must make payment subsequent to receipt of the goods.

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

The doctrine of commercial impracticability does not extend to problems that could have been foreseen.

If a buyer breaches a contract, the seller can choose to simply cancel the contract.

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts

GR8 Daze Products, Inc., and Hot Springs Spas Stores enter into a contract for a sale of hot tubs. Under a shipment contract, the seller must

Merchants are held to a higher standard of performance or duty than are nonmerchants.

Fact Pattern 22-B1 (Questions B18-B20 apply) Economy Bank issues a letter of credit in favor of Finish & Refining Company, a U.S. firm, to facilitate an international sales contract to buy resources from Global Mining, Ltd., a British company. -Refer to Fact Pattern 22-B1. Global Mining is entitled to payment when it