Performance Flashcards

A wholesaler contracts to deliver 500 crates of oranges in five monthly installments. The second installment is slightly short but easily remedied. May the buyer cancel the entire contract?

Answer: No, unless the nonconformity substantially impairs the value of the whole contract

In installment contracts, UCC 2-612 replaces perfect tender with a substantial impairment standard, and whole-contract cancellation requires impairment of the whole.

A buyer accepts goods, then discovers a latent defect that substantially impairs their value. The buyer wants to return them. What must the buyer show to revoke acceptance?

Answer: Acceptance was induced by difficulty of discovery or the seller's assurances, and revocation occurred within a reasonable time

UCC 2-608 permits revocation of acceptance only for substantial impairment where the defect was hard to discover or the seller gave assurances, and revocation must be timely.

Before the performance date, a seller unequivocally tells the buyer, 'I will not deliver the goods.' Which option is NOT available to the buyer?

Answer: Waiting until after the performance date to treat the statement as a breach and doing nothing to mitigate indefinitely

A nonrepudiating party may sue immediately, suspend performance, or await performance for a commercially reasonable time, but cannot ignore mitigation indefinitely.

After a seller repudiates, but before the buyer materially changes position or sues, the seller notifies the buyer it will perform after all. What is the effect?

Answer: The repudiation is retracted and the contract duties are reinstated

A repudiation may be retracted before the aggrieved party cancels, materially relies, or indicates the repudiation is final, reinstating the contract.

A buyer has reasonable grounds for insecurity about the seller's ability to perform and demands adequate assurance in writing under the UCC. The seller fails to respond for over 30 days. What result?

Answer: The buyer may treat the contract as repudiated

Under UCC 2-609, failure to provide adequate assurance within a reasonable time not exceeding 30 days operates as a repudiation.

A contract requires goods to be shipped 'F.O.B. seller's city.' When does the risk of loss pass to the buyer?

Answer: When the seller duly delivers the goods to the carrier

F.O.B. seller's city creates a shipment contract, so risk of loss passes when the seller duly delivers conforming goods to the carrier.

A builder abandons a project after completing 40% of the work, a material breach. Under the majority common-law rule, may the builder recover anything?

Answer: Possibly restitution for the benefit conferred, minus the owner's damages

A materially breaching party cannot recover on the contract but may in many jurisdictions recover in restitution for benefits conferred, offset by the owner's damages.