BLAW - Chapter 23 - Chapter 23 In terms of basic UCC...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 23 In terms of basic UCC performance obligations, sellers and lessors are obligated to transfer and deliver conforming goods, and buyers and lessees are obligated to accept and pay for conforming goods in accordance with the terms of the contract. As we will discuss in the next chapter, UCC section 2-711(1) gives a buyer who receives nonconforming goods the right to cancel the contract and then, if he wants, seek judicial remedies that give him the benefit of the bargain if the seller fails to deliver o Likewise, a seller who tenders goods but the buyer does not accept them, can cancel the contract Acceptance of Goods The buyer has a right to inspect the goods before she accepts or pays for them. The buyer and seller can agree on the time, place, and manner in which inspection will be made. If no agreement is made, then the buyer may inspect the goods at any reasonable time and place and in any reasonable manner. o See UCC 2-513(1)—when the seller is required or authorized to send the goods to the buyer, the inspection may be after their arrival. (so accepting the package from UPS does not mean that the buyer automatically accepts the goods from the seller—unless that is what you agreed to in the contract) Acceptance of goods occurs when a buyer, after having a reasonable opportunity to inspect the goods, either indicates that he will take them or fails to reject them. In order to reject them, the buyer must notify the seller of the rejection and specify the defect or nonconformity. So what are conforming goods? Under the common law, the parties had to “substantially perform” under the contract. Under the UCC we are looking for “perfect tender” The UCC calls this the “ perfect tender rule ” which means that if goods or tender of delivery fails in any respect to conform to the contract, the buyer has the right to either (1) accept the goods, (2) reject the entire shipment, or (3) accept part and reject part Because the perfect tender rule is so rigid, the UCC includes numerous exceptions to the rule. The perfect tender rule is more specific and demanding then the “substantial performance” rule we discussed under the common law, however, because of the numerous exceptions, the name “perfect” is really an unsuitable name Exception # 1 Good Faith UCC contracts must be performed in “Good faith” and with reasonable commercial standards of fair dealing. Compare this with the common law contracts, which only obligates the parties to perform according to the express terms of their contract. There is no breach of contract unless the parties fail to meet those terms. The UCC recognizes that certain situations may develop that are not expressly provided for in a contract and therefore
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/31/2010 for the course ACCT 1237 taught by Professor Hillman during the Spring '10 term at Drake University .

Page1 / 3

BLAW - Chapter 23 - Chapter 23 In terms of basic UCC...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online