Performance Flashcards
(33 cards)
Condition Precedent
Something that must be present or occur before a party has a duty to perform
Condition Subsequent
Something that must be present or occur after a duty to perform has arisen. Something that has to happen in order to hold a party liable on a contract
Condition Concurrent
Each party’s duty to perform under a contract is dependent upon the other party’s absolute duty to perform at the same time.
Right of Assurance
If a party has “reasonable grounds” to believe that the other party will not perform as contracted, he or she may demand in writing that the other party give adequate assurance of due performance.
Inspection
The buyer has the right to inspect goods unless agreed to the contrary. Does not need to be immediate
Perfect Tender Rule
If the seller delivers goods that fall short of the contract requirements in any way, then the buyer has the right to reject the shipment, accept the entire shipment, or accept any commercial unit and reject the rest.
Buyer’s responsibility for rejection of nonconforming goods
UCC 2-601 - 605 The purchaser must reject and pursue remedies properly.
Timely manner
Inform the seller
Give reason
Use reasonable care over goods
Follow seller’s reasonable instructions at seller’s cost
Store or reship back at seller’s expense
Seller’s rights upon rejetion
Article 2 provides sellers with the opportunity to “cure” the problems (UCC 2-508)
UCC Acceptance or actual performance
UCC 2-606
Buyer notifies seller that goods are conforming after inspection
Buyer fails to reject the goods after the reasonable opportunity to do so
Buyer engages in any act that is inconsistent
Mutual Rescission
Mutual agreement to discharge all contract obligations and restore the parties to their precontract positions
Discharge by Novation
Agreeing to substitute a party in the contract
Discharge by Accord and Satisfaction
Agreeing to satisfy a contract by either completing the original performance or a different performance
Doctrine of Substantial Performance
Substantial performance means that any deviation from the terms was done in good faith and for practical purpose (whatever was substituted is just as good as the original)
Free on Board (FOB)
Title and risk of loss pass upon deliver of conforming goods to the carrier. Place of shipment or place of destination
Free Alongside Vessel (FAS)
Title and risk of loss passes on seller’s delivery of goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer
Cost, Insurance, Freight (CIF)
Title and risk of loss passes from seller to buyer when the seller delivers goods to the carrier, obtains a negotiable bill of lading covering transportation to a named destination, procures an insurance policy, and forwards to buyer all documents
Cost and Freight (C&F)
Title and risk of loss passes when the seller delivers the goods to the carrier and obtains a negotiable bill of lading covering transportation to a named destination
Cash on Delivery (COD)
Buyer pays cash upon tender of goods
Passage of Title in Nondelivery Contracts
Determine if there is a document of title
No: Title passes the moment contract is made
Yes: Title passes to buyer upon receipt of the document
FOB Place of Shipment
title passes at the time and place of shipments or when the goods are delivered to the carrier.
FOB Place of Destination
title passes upon the seller’s tender of conforming goods at place of contract destination
Delivery “Ex-Ship”
Title and risk of loss do not pass until the ship arrives at a port of destination. Goods do not have to leave the ship
Delivery
title passes upon tender of conforming goods at buyer’s destination
Passage of Risk of Loss (Merchant)
Risk of loss does not pass until buyer actually gets possession
