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Twomey & Jennings BUSINESS LAW

Twomey & Jennings BUSINESS LAW. Chapter 26 Remedies for Breach of Sales Contracts. Statute of Limitations. The law provides a number of remedies for the breach of a sales contract. Remedies based on UCC theories are subject to a four-year statute of limitations.

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Twomey & Jennings BUSINESS LAW

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  1. Twomey & JenningsBUSINESS LAW Chapter 26 Remedies for Breach of Sales Contracts

  2. Statute of Limitations • The law provides a number of remedies for the breach of a sales contract. • Remedies based on UCC theories are subject to a four-year statute of limitations. • If the remedy sought is based on a non-UCC theory, a tort or contract statute of limitations established by state statute will apply.

  3. Remedies of the Seller • Remedies of the seller may include: • (1) a lien on the goods until the seller is paid, • (2) the right to resell the goods, • (3) the right to cancel the sales contract, and • (4) the right to bring an action for damages (including lost profits) or, in some cases, for the full purchase price. • The seller may also recover reasonable incidental damages. • In secured transactions, the buyer may have pledged some other property to the seller in case of default by the buyer.

  4. Remedies of the Seller

  5. Sellers’ Remedies Under Article 2 *Misrepresentation of insolvency (3 mos/10 day rules)

  6. Furlong v Alpha Chi Omega Sorority (1993) Was Plaintiff responsible for his own damages? Remedies of the Buyer • Remedies of the buyer may include: • (1) rejection of nonconforming goods; • (2) revocation of acceptance; • (3) an action for damages for non-delivery -- both incidental and consequential damages;

  7. Remedies of the Buyer (cont’d) • (4) an action for breach of warranty; • (5) cancellation of the sales contract; • (6) the right to resell the goods; • (7) the right to bring an action for conversion, recovery of goods, or specific performance; and • (8) the right to sue for damages and cancel if the seller has been negligent or fraudulent.

  8. Remedies of the Buyer

  9. Buyer’s Remedies Under Article 2

  10. Rodriguez v Learjet (1993) Was the $250,000 deposit a reasonable sum of liquidated damages? Limitation on Damages • Occurs when the parties agree on remedies through a contractual provision: • Liquidated Damages. • Exclusion of Damages. • Limitations on statutory remedies, or • Waiver of defenses.

  11. Remedies Under CISG • Under the CISG, if the buyer fails to perform any obligation, the seller may require the buyer to pay the price, take delivery, and perform other obligations under the contract. • Under the CISG, a buyer may reject goods only if there is a fundamental breach of contract. • The buyer may reduce the price of nonconforming goods.

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