Chapter 25 Outline

Chapter 25 Outline - Chapter 25 Sales Remedies Intro In a...

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Chapter 25 – Sales Remedies Intro In a contract for the sale of goods, either party may breach the contract due to anticipatory repudiation, insolvency, or by failing to perform. When this happens, remedies are awarded. Remedies need to address the type of breach in contact as well as the situation with respect to the goods. The Code provides distinct remedies for the seller and buyer depending on the situation. The Code’s purpose is to put the aggrieved party in a position as the good as the one they would have been in had the other party performed. Damages do not have to be calculated with mathematical precision but only need to be proved with “whatever definiteness and accuracy the facts permit.” Punitive (punishment) damages are generally not given. Remedies for breach are cumulative and whether one remedy bars another depends on each case. Remedies of the Seller When a buyer defaults in performing any of his contractual obligations, the seller may sue for remedies against the buyer. A default can consist of wrongfully rejecting the goods, wrongfully revoking acceptance of the goods, failing to make a payment due on or before delivery, or repudiating the contract in whole or in part. In Article 2A, it states that a lessor may recover compensation for any loss of or damage to the lessor’s residual interest in the goods caused by the lessee’s default. Listed below are the ways the seller can collect his remedies. The first three and ninth remedies are goods-oriented meaning that they relate to the seller’s exercising control over the goods. The fourth through seventh remedies are money-oriented because they provide the seller with the opportunity to receive monetary damages. The eighth remedy is obligation-oriented because it allows the seller to avoid his contractual obligations. If the seller delivers goods on credit, and the buyer fails to pay, the seller’s only remedy is to sue for the unpaid price, unless the buyer in insolvent. On the other hand, if the buyer was insolvent when he received the goods on credit, the seller can sue for the goods. The Code defines insolvency using both equity and bankruptcy. The equity meaning of insolvency is the inability of a person to pay his debts in the ordinary course of business or as they become due. The bankruptcy meaning of insolvency is that total liabilities exceed the total value of all assets. Since remedies are cumulative the seller may collect multiple remedies to get that back in the position they would have been had the buyer not breached. 1. To Withhold Delivery of the Goods The seller may withhold the delivery of goods to a buyer who has breached the contract by wrongfully rejecting the goods, wrongfully revoking acceptance of the goods, failing to make a payment due on or before delivery, or repudiating the contract. If the contract has installments, any breach of an installment that impairs the value of the entire contract allows the seller to withhold the entire undelivered balance of
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This note was uploaded on 03/17/2011 for the course BUL 3350 taught by Professor Bailey during the Spring '11 term at FSU.

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Chapter 25 Outline - Chapter 25 Sales Remedies Intro In a...

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