August 25th Reading Assignment 245-291
Notes: CHAPTER 3: PERFORMANCE
1.
Assignment 13
A. Closing the Sale with Sales of Goods
a. The process of closing a sale of personal property begins with the buyer's physical receipt of the goods. a. The buyer is ALWAYS given a reasonable opportunity to inspect the goods, at which time the buyer may reject. b. Once buyer has accepted goods, buyer will have a second opportunity to unravel transaction by a right known as "revocation of acceptance." i. If the seller can tender satisfactory cure of all nonconforming goods, then buyer must keep the cured goods.
The functional consequences for the buyer of acceptance under Article 2 is that the buyer has lost one remedy (rejection), the buyer now has the burden of proof on non-conformities, and the buyer must give timely notice of a breach in order to recover damages from seller.
Three ways a buyer accepts goods:
1. An affirmative signification that buyer has accepted 2. A failure to reject the goods following a reasonable opportunity to inspect them 3. An act by the buyer that is inconsistent with the seller's ownership. UCC 2-606(1)
Supplier certification program: the buyer denotes a significant amount of time only at the beginning of the relationship with a new seller to determine whether that seller has adequate quality control in place.
Rejection must occur within a reasonable time after delivery of the goods, and it is ineffective unless the buyer seasonably notifies the seller. UCC 2-602(1)
Must state the specific grounds for rejection The buyers right to reject exists whenever the goods "fail in any respect to conform to the K" (2-601), but there are a number of exceptions to this perfect tender rule. 1. If the K is an installment K (one in which the K is a series of separate deliveries), then the buyer may reject an installment only "if the nonconforming goods substantially impairs the value of that installment and cannot be cured." 2-612(2). 2. The seller may have contractually limited the buyer's remedies, including the right to reject, thereby obligating the buyer to accept the seller's efforts to repair or replace defective parts. 3. The sellers right to "cure" can often reverse a buyer's rejection. Concepts such as usage of trade, court of dealing, and course of performance may allow the seller some "commercial leeway's in
performance" that will preclude the buyer's rejection of a less than perfect tender. UCC 2-106.
To revoke, the buyer must:
1. With a revocation the nonconformity must substantially impair the value of the goods to the buyer. 2-608(1) 2. The buyer may revoke its acceptance only in one of two circumstances: (1) where the buyer reasonably believed that the problem with the goods would be cured and it has not been, or (2) where the buyer was unaware of the problem because of seller's assurances or because the problem was too hard to discover before acceptance. 2-608(1) 3. Time limits: revocation must occur within a reasonable time