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Under the COMMON LAW, is a promisee entitled to PEFECT performance?
NO—only SUBSTANTIAL PERFORMANCE (i.e., no material breach)
Finishing a job late is NOT a material breach unless K or circumstances indicate that time is of the essence.
Under UCC Art 2, is a buyer entitled to PERFECT performance?
YES—If tender is not perfect, buyer may REJECT the goods.
This means that the buyer can return the goods at the seller's expense, get a refund of money paid, and collect damages from seller for breach of contract.
UCC ART 2: If a seller's tender of goods is not perfect, can the seller CURE?
- Time NOT expired: Seller may cure by delivering conforming goods.
- Time EXPIRED: Seller cannot cure, unless seller has a good faith belief from prior dealings that buyer would accept the nonconforming goods (flexible in the past).
What is an INSTALLMENT CONTRACT? And does the perfect tender rule apply?
- Installment Contract: requires or authorizes delivery of goods in separate installments.
- Reject for Substantial Impairment: buy can reject only for substantial impairment—perfect tender rule does NOT apply.
Buyer's ACCEPTANCE of Goods
Implied acceptance when buyer keeps
- 1) without objection, after having had a
- 2) reasonable opportunity to inspect.
Can a buyer REJECT goods after they've been accepted?
- Cannot reject: after buyer accepts (might be able to revoke acceptance)
- Damages: But, a buyer who accepts can still get damages (e.g., cover, market damages, loss in value)
Can a buyer REVOKE acceptance of goods?
- Generally NO: a buyer cannot revoke acceptance of goods
- Exceptions: can revoke if buyer can prove both (i) SUBSTANTIAL impairment, and (ii) DIFFICULT TO DISCOVER (i.e., latent defect). Must revoke within a reasonable time of discovering defect.
What CONSEQUENCES if buyer effectively rejects or revokes acceptance of goods?
- RETURN: goods at seller's expense
- REFUND: any money paid for goods
- DAMAGES: for breach of contract (e.g., cover, market damages, loss in value)
If a buyer accepts goods, what are his payment obligations?
- CHECK: may pay by check, but seller doesn't have to take it
- REASONABLE TIME FOR REFUSAL: if seller doesn't accept buyer's check, buyer has a reasonable time from refusal to get cash, EVEN IF payment is made and refused at the end of the last day for payment