Business Law

1. Business Law Chapter 20 Performance and Breach

2. Objectives Explain the seller�s and lessor�s major obligation under a contract Identify the buyer�s or lessee�s major duties under a contract

3. Objectives List the remedies available to a seller or lessor when the buyer or lessee is in breach State the remedies available to a buyer or lessee when the seller or lessor is in breach

4. Good Faith The obligations of good faith and commercial reasonableness underlie every contract within the UCC Honesty in fact

5. Obligations of the Seller To tender conforming goods to the buyer Tender of Delivery Conforming goods at buyer�s disposal Reasonable notification Reasonable hour and manner Deliver whole order unless parties agree otherwise

6. Obligations of the Seller Place of Delivery Noncarrier cases � seller�s place of business or seller�s residence or location of the identified goods Carrier cases � shipment contract or destination contract

7. Obligations of the Seller Shipment Contract Put the goods in the hand of the carrier Contract for reasonable transportation Obtain and promptly deliver or tender any documents that the buyer needs to obtain the goods from the carrier Promptly notify buyer that shipment has been made

8. Obligations of the Seller Destination contract Tendered to the buyer at a particular destination Reasonable hour Held available for a reasonable length of time Appropriate notice to the buyer Provide any documents needed by the buyer

9. Obligations of the Seller The Perfect Tender Rule Failure of delivery to conform to the contract Buyer may accept, reject the entire shipment, or accept part and reject part

10. Exceptions to the Perfect Tender Rule Agreement of the parties Cure Substitution of carriers Installment contract Commercial Impracticability Destruction of identified goods

11. Obligations of the Buyer To accept the goods and pay for them according to the terms of the contract Furnish facilities reasonably suited for receipt of the goods Make payment at the time and place the buyer receives the goods

12. Obligations of the Buyer Payment � agreement of parties Right of Inspection � reasonable place and reasonable manner Revocation of acceptance Nonconformity substantially impairs value Nonconformity not cured within reasonable period of time Nonconformity not discovered until after acceptance

13. Anticipatory Repudiation Communication of intention not to perform Await performance Resort to any remedy for breach Suspend performance or proceed with the seller�s right to resell the goods or to salvage unfinished goods

14. Remedies of the Seller Right to withhold delivery Right to reclaim the goods Right to resell the goods Unfinished � cease manufacture or complete, sell for salvage or resell May recover deficiency and incidental damages

15. Remedies of the Seller Right to recover the price Buyer has accepted the goods and has not revoked Conforming goods lost or damaged after risk of loss has passed to the buyer Buyer breach after goods are identified and seller is unable to resell Right to recover damages

16. Remedies of the Buyer Right of rejection Timeliness and reason required Duties of merchant buyers � follow reasonable instructions from seller Right to obtain specific performance Goods unique or remedy at law inadequate

17. Remedies of the Buyer Right of cover Purchase goods from another seller and substitute them for the goods due under the contract Recover any excess of the cost of cover over the contract cost, plus incidental and consequential damages

18. Remedies of the Buyer Right to recover damages Difference between contract price and market price at the time the buyer learned of the breach Plus incidental and consequential damages less expenses saved

19. Statute of Limitations Action for breach of contract under the UCC must be commenced within four years after the cause of action arises Can be reduced to one year by agreement of the parties