Performance, Breach, and Discharge

Question 1

A) Risk of Loss

Answer 1

Non-Carrier Case
Carrier Cases

Question 2

1) Non-Carrier Case:

Answer 2

(a) Seller is a merchant: Risk on seller until the buyer takes possession
(b) Seller is not a merchant: risk on seller until goods are tendered to buyer
(i) Made available to the buyer?

Question 3

2) Carrier Cases

Answer 3

(a) Shipment Contract:
(i) Risk of Loss shifts to buyer when goods delivered to CARRIRER (USPS, FedEx)
(b) Destination Contracts
(i) Risk of Loss shifts to the buyer when goods are delivered to a DESTINATION
(c) FOB
(i) FOB Seller: is a SHIPMENT Contract
(ii) FOB “Anything else:” is a DESTINATION Contract

Question 4

(a) Shipment Contract:

Answer 4

(i) Risk of Loss shifts to buyer when goods delivered to CARRIRER (USPS, FedEx)

Question 5

(b) Destination Contracts

Answer 5

(i) Risk of Loss shifts to the buyer when goods are delivered to a DESTINATION

Question 6

(c) FOB

Answer 6

(i) FOB Seller: is a SHIPMENT Contract
(ii) FOB “Anything else:” is a DESTINATION Contract

Question 7

C) Modification Rules

Answer 7

(i) Common Law Modification: New Consideration is needed
(ii) UCC Modification: Good Faith is Needed, no new consideration

Question 8

(i) Common Law Modification

Answer 8

New Consideration is needed

Question 9

(ii) UCC Modification

Answer 9

Good Faith is Needed, no new consideration
(b) UCC: Clauses prohibiting oral modifications are valid

Question 10

3) Mutual Modification

Answer 10

(a) Ok if both parties agree to modify the original terms +
(b) “fair and reasonable under the circumstances”

Question 11

2) Conditions Excused

Answer 11

(a) Waiver
(b) Bad Faith
(c) Avoiding Forfeiture

Question 12

E) Non-Conforming Goods - UCC - Buyer

Answer 12

(a) May Reject All within a reasonable amount of time
(b) May Accept All
(c) May Reject in part and Accept in part

Question 13

UCC Seller’s Right to Cure

Answer 13

(a) Seller had reasonable grounds to believe the goods would be acceptable
(b) By notice + new tender within time of performance

Question 14

4) Non-Conforming Installment contact

Answer 14

(a) Defective shipment cannot be rejected if the defect can be cured
(i) One non-conforming shipment does not mean total breach of the Contract
(ii) If 1 installment impairs the value of the entire contract, buyer can go after the entire contract

Question 15

F) Discharge

Answer 15

Impracticability
Impossibility
Frustration of Purpose

Question 16

1) Impracticability

Answer 16

(a) Unforeseen event makes performance too difficult/expensive
(i) Can discharge
(ii) Some increase in price is not enough though

Question 17

2) Impossibility

Answer 17

(a) No one can perform
(b) (Temporary difficulty is not enough)
(c) Ex. All the raw materials are gone
(i) Illegality of performance

Question 18

3) Frustration of Purpose

Answer 18

(a) If the core reason for the contract in now gone, it is dischargeable

Question 19

1) Anticipatory Repudiation

Answer 19

(a) Before Contract performance
(b) One party UNEQUIVICALLY refuses to perform

Question 20

Assurances

Answer 20

(a) Demand when doubtful about performance
(b) Party must respond with a reasonable amount of time – ~ 30 days
(i) UCC: Demand must be in writing

Question 21

3) Retraction of Repudiation, party can retract unless

Answer 21

(a) The other party has sued
(b) The other party has accepted the repudiation
(c) The other party has relied on the repudiation