II-2 Contracts 2 Flashcards
Performance: What are 3 types of performance due?
- Never if conditions precedent is not met.
- Same time as receiving consideration: conditions concurrent.
- Never if conditions subsequent passes Statute of limitations.
What is the requirement for completeness of performance under CL?
Substantial performance:
- Is is for practical purpose just as good?
- Was it done in good faith?
- Can party be compensated?
What are 4 buyer’s rights for goods?
- Inspection before payment (unless COD:cash on delivery, CF: cash and freight, CIF: cash, ins, and freight).
- Rejection.
- Acceptance.
- Revocation of acceptance (only for those items that requires the use for a while).
UCC: who has the right to demand assurance? Who has the right to cure?
Both parties.
Seller.
UCC: If seller does not provide cure (assurance), what happens?
Other party can take it as breach (Anticipatory Repudiation) and sue, substitute the seller, or wait.
UCC: will it be a breach if seller sends a non-conforming item before the due date?
No, if the seller sends the right one before the due date.
UCC: Right to cure: what must seller do to exercise this right?
Notify the buyer prior to the performance date.
When is performance discharged?
- When conditions fail.
- When both parties agree and sign release, waiver, or rescission (accord and satisfaction).
- The Novation thing: all parties agree and bring in the third party to replace one.
- Statute of limitations.
- Impossibility (Object test) under CL.
- Impracticability under UCC.
- Illegality.
- Breach.
- Bankruptcy.
What are types of damages and remedies?
- Nominal damage (technical breach, no financial loss) - award nominal amount of $1 or so.
- Compensatory damage - return parties to same position as if there had been no breach.
- Incidental damage - costs, lawyers’ fees
- Consequential damage (damages to third party).
- Liquidated damage (agreed-on-in-advance damages. alternative to compensatory damages) - court will look if it is a reasonable amount and not penalty.
- Punitive damage - available only in fraud cases.
What are types of remedies?
- Specific performance - require breaching party to perform; used against seller in land contracts. Can happen under UCC if goods are rare.
- Rescission and restitution - used in misrepresentation; returns parties to original position.
- Reformation - court uses it to correct often clerical error in contracts.
- Quasi-contract recovery - given when there is no contract.
What is prerequisite for passage of title and risk of loss?
Identification of goods: for fungible goods. they are shipped, marked or otherwise designated for the buyer.
When does identification occur for existing goods?
At the time of contracting.
Non-shipment: When does the title pass when there is document of title and there is no document of title?
Doc: upon delivery of title document.
No doc: At the time of contracting.
When does the title pass when the seller is a merchant and non merchant?
M: Upon receipt.
Non m: Upon tender actual purchase.
When does the title pass when there is Bailment: warehouse (third party)?
When there is doc of title or other doc, upon receipt of the doc.
No doc: when buyer is notified goods are available.
When does the title pass: sale on approval?
When the buyer accepts the goods.
When does insurable interest exist?
When identification occurs.
What is BFP? What is its right?
Bona fide purchaser - who purchase goods without knowing the seller did not have valid contract.
Its voidable or no title can be made into valid title by court.
What happens when BFP purchases void contracted item?
Item must be returned.
What are 3 cases a common carrier can avoid strict reliability?
Act of God, act of shipper, act of enemy.
What are 5 remedies for seller under UCC Article 2?
- Stop delivery.
- Resale Price.
- Market Price.
- Action for Price.
- Lost Profit.
Which seller’s remedy is applicable when the buyer fails to take goods and how is the compensation calculated?
Resale price or Market price.
Resale: K price - resale price + incidental damages - expenses saved.
Market: K price - market price + incidental damages - expenses saved.
Which seller’s remedy is applicable when specially manufactured goods are involved and how is the compensation calculated?
Action for price.
K price + incidental damages - expenses saved.
How is lost profit calculated?
Profits + incidental damages - salvage value.
