Exam 16: Performance and Breach of Sales Lease Contracts

A buyer may reject a seller's goods under any circumstances.

Ramblin' Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin' refuses to go through with the deal. Blacksmith can recover

Tender must occur at a reasonable hour and in a reasonable manner.

The doctrine of commercial impracticability only extends to problems that are unforeseen.

An installment contract is breached if a buyer accepts any nonconforming goods.

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition 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.

Natural Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers. Olive Grove ships "Grade B" oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to

If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can recover damages.

Once the seller has tendered delivery, the buyer is obligated to accept the goods and pay for them.

Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and incidental damages if Internet

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the contract ten days later. Double D is unable to sell the cattle to another buyer. Double D is entitled to

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that

Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has

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

Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

If a buyer repudiates a contract, the seller cannot recover damages.

In contracts involving a carrier, a seller can complete performance through a shipment contract or a destination contract.

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweaters are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods

Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood. Under a destination contract, the seller must