Performance Flashcards

A buyer rightfully rejects goods but is a merchant in possession of the seller's perishable goods, and the seller has no local agent. What must the buyer do?

Answer: Make reasonable efforts to sell the goods for the seller's account

A merchant buyer in possession of rightfully rejected perishable goods must follow reasonable seller instructions or, absent them, make reasonable efforts to sell the goods for the seller's account.

A contract states, 'Payment is due only if the goods arrive by June 1,' and the goods arrive June 3 through no one's fault. Under the common law, what result?

Answer: The buyer's payment duty never arises because an express condition failed

Express conditions are strictly enforced, so failure of the June 1 arrival condition means the payment duty never becomes due.

An insurer repeatedly accepts late premium payments without objection, then denies coverage when a payment arrives late again. What doctrine may prevent the insurer from enforcing the timeliness condition?

Answer: Waiver or estoppel based on its prior course of conduct

A party who by conduct indicates it will not insist on a condition may be held to have waived it or be estopped from enforcing it.

A construction contract says 'time is of the essence,' and the builder finishes two weeks late. How does this clause change the analysis?

Answer: The delay is treated as a material breach permitting the owner to withhold performance

A time-is-of-the-essence clause makes timely completion an essential term, so late performance is a material breach excusing the other party's duty.

A buyer uses delivered machinery in its factory for three months without complaint despite knowing of defects, then attempts to reject it. What result under the UCC?

Answer: The buyer has accepted the goods by acts inconsistent with the seller's ownership and can no longer reject

Continued use of goods with knowledge of defects constitutes acceptance under UCC 2-606, cutting off the right to reject and leaving only damages or revocation.

A homeowner hires a painter, and the contract is silent on payment timing. When is payment due under the common-law default rule?

Answer: After the painter completes the work, because performance taking time is due before payment

Where one performance takes time and the other is instantaneous, the longer performance is a constructive condition precedent to the duty to pay.

A seller tenders 100 widgets, 90 conforming and 10 defective, in a single-delivery contract. The buyer wants to keep the 90 and reject the 10. May the buyer do so?

Answer: Yes, the buyer may accept conforming commercial units and reject the rest

UCC 2-601 expressly allows a buyer to accept any commercial unit or units and reject the rest when tender is nonconforming.