Law ch 22 notes - Chapter 22- Uniform Commercial Code-...

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Chapter 22- Uniform Commercial Code- Performance and Breach I. Performance Obligation a. Good Faith- underlying obligation i. Under the UCC every contract or duty carries on obligation of good faith ii. Good faith means; 1. Honesty in fact, generally a. For non merchants 2. For merchants, observance of reasonable commercial standards in the trade as well as honesty in fact b. Contract Performance i. Basic obligation of seller is to transfer and deliver conforming goods ii. Basic obligation of buyer is to accept and pay for conforming goods iii. Where obligation under contract is unclear, code will impose standards of good faith & commercial reasonableness II. Seller’s Obligation a. Must deliver or tender delivery of conforming goods- basic obligation b. Tender of Delivery- transfer of possession of goods i. Make the goods available for the buyer to take delivery w/reasonable notice ii. Must be done: 1. At a reasonable hour, 2. In a reasonable manner, and 3. In a single delivery unless the parties agreed to installments c. Place of delivery- i. Agreed location in contract; if none, ii. Seller’s place of business, if none, iii. Sellers residence, or iv. Place where goods are located d. Delivery via Carrier i. Shipment contracts-seller must: 1. Place goods w/carrier, and
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2. Make a reasonable contract for transportation 3. Provide any documents necessary for buyer to obtain possession from carrier 4. Notify the buyer that shipment has been made 5. Once all done then carrier is responsible 6. If seller does not make a reasonable contract or fails to notify of shipment, the buyer can reject goods only if there is a significant delay or a material loss 7. Buyer’s responsible ii. Destination Contracts- seller must: 1. Deliver conforming goods, 2. At agreed destination, 3. At a reasonable hour, and 4. Held for a reasonable time, if buyers not there, 5. With sufficient notice, and 6. Any necessary documents of title 7. Burden is on the buyer 8. Carrier is seller’s agent 9. Seller remains responsible e. Perfect tender rule- buyer has options: i. If the goods fail to conform to the contract in any respect, ii. The buyer can: 1. Accept the shipment; (don’t waive any rights) 2. Reject the entire shipment; or 3. f. Exceptions- i. Per agreement of the parties ii. Right of cure (right to repair, adjust or replace nonconforming goods) 1. Within the time for performance 2. If the seller has reasonable grounds to believe that a nonconforming tender will be accepted; e.g., a. Where a buyer accepted substitute goods in the past (prior performance) or
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b. Where a price allowance is offered w/tender (accommodation) i. Pg 43 for examples iii. Substitution of carriers- reasonable substitution for carrier that is unavailable due to circumstances beyond the control of the parties iv. Installment contracts
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Law ch 22 notes - Chapter 22- Uniform Commercial Code-...

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