BLRB20 - Business Law and the Regulation of Business...

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Unformatted text preview: Business Law and the Regulation of Business Regulation Chapter 20: Performance Chapter By Richard A. Mann & Barry S. Roberts Topics Covered in this Chapter Topics A. Performance by the Seller B. Performance by the Buyer C. Obligations of Both Parties Performance by the Seller s Tender of Delivery – the seller makes available to the buyer goods conforming to the contract and so notifies the buyer. the – – Buyer – obligated to accept conforming goods. Buyer obligated Seller – entitled to payment of the contract price. Seller entitled s s Time of Tender – tender must be made at a reasonable time and kept open for a reasonable period of time. reasonable Place of Tender – if none is specified, place for delivery is the seller's place of business or, if he has no such place, his residence. or, Tender of Performance by Seller Identification of Goods Shipment contract Destination contract Goods held by bailee without moving Seller holds goods for buyer Duly delivered? Seller holds goods for buyer at destination? Seller tenders document of title? Seller notifies buyer that goods are held at his disposal? No Breach 1 Yes No Breach 2 Yes 3 Yes 4 No 5 Yes No Breach Continued on next slide… (match arrow numbers) Tender of Performance by Seller (cont.) (cont.) Tender 1 2 3 4 5 Yes Yes Yes No Yes Bailee acknowledges buyer’s right to possession? No Proper contract? Yes Notifies Yes buyer of shipment? No Breach Notifies buyer? No Breach Yes Yes No Breach Tender Place of Tender Place s s s Shipment Contracts – seller must tender delivery of the goods to a carrier for delivery to buyer; shipment terms include: F.O.B. place of shipment, F.A.S. port of shipment, place F.A.S. C.I.F., C.&F. C.I.F., C.&F. Destination Contracts – seller must tender delivery of goods at a named destination; destination terms include: F.O.B. place of destination; ex-ship; no arrival, no sale. destination; ex-ship; Goods Held by Bailee – seller must either tender to the buyer a document of title or obtain an acknowledgment from the bailee. obtain Perfect Tender Rule Perfect s The seller's tender of performance must The conform exactly to the contract, subject to the following qualifications: following – Agreement by the Parties – the parties may contractually limit the operation of the perfect tender rule. tender – Cure by the Seller – when the time for performance under the contract has not expired or when the seller has shipped nonconforming goods in the belief that the nonconforming tender would be acceptable, a seller may cure or correct her nonconforming tender. nonconforming Installment Contracts Installment When the contract calls for the goods to When be delivered in separate lots, the buyer may reject a nonconforming installment if it substantially impairs the value of that installment and cannot be cured. s If nonconformity or default of one or If more of the installments substantially impairs the value of the whole contract, the buyer can treat the breach as a breach of the whole contract. breach s Performance by the Buyer s s Inspection –the buyer has a reasonable time the to inspect goods to determine if they conform. to Rejection – buyer's manifestation of unwillingness to become the owner of the goods; must be made within a reasonable time after the goods have been tendered or delivered and gives the buyer the right to (1)­ delivered reject all of the goods, (2)­accept all of the reject goods, or (3)­accept any commercial unit(s)­ goods, and reject the rest Performance by the Buyer s s s Acceptance – buyer's expressed or implied willingness to become the owner of the goods. goods. Revocation of Acceptance – rescission of acceptance of goods if a nonconformity substantially impairs their value, provided that acceptance was (1) based on an assumption that the nonconformity would be cured by the seller and it was not, or (2) the nonconformity was an undiscovered hidden defect. was Obligation of Payment – in the absence of an agreement, payment is due at the time and place the buyer is to receive the goods. and Performance by the Buyer Buyer rejects goods Goods conform Breach by buyer Goods do not conform Seller cures defect Buyer accepts Buyer liable for price OR Buyer accepts goods Goods conform Buyer liable for price Goods do not conform Buyer revokes acceptance Buyer retains goods Seller does not cure Breach by seller Buyer rejects Breach by buyer Breach by seller Obligations of Both Parties s s Casualty to Identified Goods – if goods were identified when the contract was made and those goods are totally lost or damaged with­out fault of either party and before risk of loss passes to the buyer, the contract is avoided. avoided. Nonhappening of Presupposed Condition – the seller is excused from the duty of performance on the nonoccurrence of presupposed conditions that were a basic assumption of the contract, unless the seller has expressly assumed the risk. has Obligations of Both Parties s Substituted Performance – where neither party is at fault and the agreed manner of goods becomes commercially impracticable, a substituted manner of performance must be tendered and accepted. must Rights Rights s s Right to Adequate Assurance of Right Performance – when reasonable grounds for Performance insecurity arise regarding either party's performance, the other party may demand written assurance and suspend his own performance until he receives that assurance. performance Right to Cooperation – where one party's required cooperation is untimely, the other party is excused from any resulting delay in her own performance. her Anticipatory Repudiation Anticipatory s Anticipatory Repudiation – if either party clearly indicates an unwillingness or inability to perform before the performance is due, the other party may await performance for a reasonable time or resort to any remedy for breach. time ...
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This note was uploaded on 10/25/2009 for the course LAW 100 taught by Professor Liu during the Spring '09 term at Zhejiang University.

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