BUS311_chapter_06

Timeliness suppose william contracts to sell victoria

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Unformatted text preview: t the whole contract, the breach here is quite minor. Harry can deduct the cost of having those two window frames painted, but he will have to pay Peter the rest of the $3,000. Timeliness Suppose William contracts to sell Victoria 1,000 pillows for her new hotel, to be delivered by June 1, but the pillows don’t arrive until June 3. Is Victoria discharged, or must she still accept and pay for the pillows? The general rule is that if the late performance is still commercially reasonable, Victoria is not discharged. Absent special circumstances, the two-day delay is probably not very significant, and Victoria must accept and pay for the pillows. But if the contract also includes the phrase, “time is of the essence,” the law generally finds that any lateness is a material breach. Thus Victoria would be excused from the pillow contract if the contract had this phrase. Businesses must ensure that shipments are made as contractually specified so as not to breach contract. © Getty Images/Comstock/Thinkstock Anticipatory Breach Suppose William, in the above situation, instead called Victoria on May 15 and informed her that he could not deliver the pillows on time. This is called an anticipatory breach or repudiation of the contract. The law treats an anticipatory breach the same as an actual, present breach, so Victoria now has three options: (1) she can tell William she is holding him to the deal, see if he delivers on time, and if not, sue him then; (2) sue him now, on May 15; or (3) simply buy the pillows from another supplier. Victoria should, however, inform William of her choice so as to avoid confusion. Note that this doctrine does not apply to debts. If you tell the bank you’re terribly sorry, but you don’t think you’ll have the money for that student loan payment next month, the bank cannot charge you a late fee now. The bank must wait until you are actually delinquent with the payment. rog80328_06_c06_111-133.indd 120 10/26/12 5:37 PM Section 6.2 Performance and Discharge of Contracts CHAPTER 6 Impossibility of...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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