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>> This is Chapter 11--
Performance and Breach in Sales Contracts.
Seller has an obligation to transfer
and deliver conforming goods,
and the buyer's obligation in a contract for the sale of goods
is to accept those goods if they're conforming
and pay for them.
Courts also impose a good-faith standard when a contract
is unclear about its terms.
Let's look in detail at the seller's obligation.
First tender of delivery-- a seller has a duty to notify
the buyer that conforming goods are at the disposal of the buyer
to take delivery.
Notice this is different than actual delivery--
that tender delivery--
and needs to be at a reasonable place and time.
Another obligation is delivery in a non-carrier contract case
at the seller's place of business.
And if it's via carrier,
it depends on whether it's a shipment
or destination contract.
In a shipment contract, a seller must put conforming goods
in the carrier's hands,
notify the buyer that the shipment is made,
and then provide relevant documents.
In a destination contract,
the seller agrees to deliver the goods
at a particular destination.
In the Perfect Tender Rule,
seller has the duty to ship or tender conforming goods,
and if the goods fail to conform to the agreement
in any way, the buyer has a right to accept
that shipment anyway, reject the entire shipment,
or accept the conforming part
and reject the non-conforming part.
You can take a look at Case 11.1.
Another exception is called "cure."
If the seller repairs, adjusts, or replaces
non-conforming goods within the time for performance.
Now that would be considered a "cure."
And the nature of the defect needs to be disclosed.
So basically, this is an adjustment that's made
when the seller has time before the time for performance is up.
Another one would be a substitution of carriers.
If it's agreed upon that the carrier is not practical,
then there could be a reasonable substitution of that carrier,
even if that's not a perfect tender.
And installment contracts-- it would only be a violation
of the Perfect Tender Rule if it substantially impairs
the value of the installment.
So for example, if one piece of plywood out of 100
of the first shipment of 12 were defective,
that wouldn't necessarily allow the buyer to reject everything.
Another one is called "commercial impracticality,"
and it extends only to unforeseeable circumstances.
So even though it's not impossible to perform,
it would be commercially impractical on that example--
that is Case 11.2--
where the court said that the increase in the price of milk
was actually foreseeable,
and that should have been addressed in the sales contract.
Or partial performance--
if there's already been partial performance,
then the seller's obligated to secure
the remaining performance via a third party.
Or destruction of identified goods--
parties are excused only if the goods were identified
at the time the contract was formed.
And then assurance and cooperation--
you know, if the party makes an assurance,
the other party has a duty-- a good-faith duty to cooperate.
Allegations of the buyer to pay--
they have a right to inspect--
and, you know, that can be an issue in even COD shipments.
However, a buyer would still later have a right
to inspect that shipment.
Acceptance-- they have a responsibility
to accept conforming goods,
either expressly by their words,
in writing, by their conduct.
And acceptance is presumed if the buyer had an opportunity
to inspect and failed to reject the goods.
Or even partial acceptance-- buyer doesn't have to accept
less than a single commercial unit.
There's also the concept of anticipatory repudiation,
which means you anticipate there's going to be a breach.
So, if, prior to performance,
one of the parties feels that there might be a breach,
they can communicate to the other side their intention
not to perform, or the non-breaching party
could treat that as a repudiation
that's a final breach
and pursue remedies or wait to see
if the reputing party honors the contract.
In either case, the non-breaching party
can suspend their own performance.
So in other words, if you think the other party's gonna breach,
ask them, and if they say they will not be able to perform,
you can treat that as a breach,
even though the time for performance hasn't come.
And the big thing about that is allowing you to suspend
your own performance.
You wouldn't wanna pay for something that you anticipate
that you're not really going to get.
Remedies of the seller--
they differ depending on where the goods are.
When the goods are in possession of the seller,
and a buyer breaches,
the seller would have a right to do these things--
cancel a contract, withhold delivery,
resell or dispose of goods,
recover the purchase price, and recover damages.
So you see all these remedies differ depending on
where the goods are at.
In this case, it's easy to hold with delivery
if you still have the goods.
When the goods are not in the seller's hands--
now they're in transit--
if they can, they can stop the carrier and cancel the contract,
resell the goods, sue to recover the deficiency damages.
They need to let the carrier know in a timely manner,
and this right would continue until the buyer
actually gets possession of the goods--
or in other situations that are listed in the UCC.
When the seller refuses to deliver the goods,
buyer would have the right to cancel the contract,
get the goods they paid for,
sue for specific performance to get them to perform
under the contract to cover--
go get the goods from someone else--
to replevy the goods-- go get the actual goods--
and recover damages, which is often the difference
between what they were gonna pay for them
and what they would have to pay from a third party.
When the seller delivers non-conforming goods,
the buyer has a right to reject them,
to revoke their acceptance--
for example, if, you know, it was a large shipment of eggs,
they couldn't inspect all the eggs.
When they discover that there is a non-conforming shipment,
then they could revoke that acceptance, or recover damage
for accepted goods-- they keep the goods and then sue
for the damages for the difference
between what they got and what they should've gotten.
There is the ability, under the UCC, for remedies
and also for the parties to limit their remedies.
They could limit them to what's--
they expressly agreed to it,
or even remedies beyond what the UCC.
Or they can say that this is the exclusive remedy,
whatever they agree to.
Or they can limit consequential damages.
And then, there's the whole limitation
in terms of a statute of limitations--
if there's a breach of contract, and the party waits too long--
under the UCC, it's four years after the breach--
then they wouldn't be able to bring a cause of action.