Business Law Chapter 22

Business Law Chapter 22 - Business Law Chapter 22...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Business Law Chapter 22 Performance and Remedies Good Faith - Conforming goods satisfy the contract terms, non conforming goods do not. - The UCC requires good faith in the performance and enforcement of every contract. - Good Faith means honesty in the fact. Between merchants, it also means the use of reasonable commercial standards of fair dealing. Seller Obligations of Good Faith - The seller’s primary obligation is to deliver conforming goods to the buyer – but because buyer might not be willing or able to accept delivery, UCC demands only that the seller make reasonable ATTEMPT at delivery. - The seller must tender the goods, which means to make conforming goods available to buyer o The contract usually states where and when seller is obligated to tender delivery o Ie: if seller is to bring goods to warehouse on July 3 rd , then buyer is obligated to pick up goods there and if they fail to do so, buyer is in breach of contract. - Although a seller must always tender delivery, it does not mean a seller always transports goods. Sometimes contracts require buyer to pick up goods. - Regardless, seller must make goods available at reasonable time AND keep goods available for a reasonable period AND deliver to buyer any documents they may need to take possession. - The seller is also obligated to deliver conforming goods. Perfect Tender Rule - Under the perfect tender rule, the buyer may reject goods if they fail in ANY RESPECT to conform to contract. o Under common law, before UCC was established, perfect tender rule required goods to conform absolutely to contract specifications – buyer could reject them even if they had minor deviations. The UCC retained this rule.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Restrictions on Perfect Tender Rule - UCC has sections that limit the tender rule effects. - Usage of trade, course of dealing, and course of performance o Code takes a commonsense view that a contract for sale of goods does not exist in a vacuum – “Usage of trade” means any practice that members of an industry expect to be part of their dealings – courts consider trade usage when they interpret contracts – means that perfect tender rule may NOT permit a buyer to reject goods with minor flaws. Minor non conformity ie: 5 mistakes out of 1000 perfect goods, IS perfect tender. o “Course of Dealing” – refers to previous commercial transactions between same parties – UCC requires that current contract be interpreted in light of past dealings that have created reasonable expectations. Ie: if company order 20,000 feet of highest grade pine wood, if 1% or 2 % are not highest grade, and in the past the buyer has accepted the minor deficiencies, the court WILL regard it as perfect tender. o
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/29/2011 for the course MGT 3000 taught by Professor Murrmann during the Spring '11 term at Virginia Tech.

Page1 / 9

Business Law Chapter 22 - Business Law Chapter 22...

This preview shows document pages 1 - 3. Sign up to view the full document.

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