Bài giảng Business Law (13th edition) - Chapter 21: Performance of Sales Contracts

Learning Objectives General rules of performance under the Uniform Commercial Code Delivery, inspection, and payment Acceptance, revocation, and rejection Assurance, repudiation, and excuse

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SalesFormation & TermsProduct LiabilityPerformance of Sales ContractRemedies for Breach of Sales Contracts4McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.Performance of Sales ContractsPAETRHC21“Business neglected is business lost.”Daniel Defoe, novelist, The Complete English Tradesman (1726)Learning ObjectivesGeneral rules of performance under the Uniform Commercial CodeDelivery, inspection, and paymentAcceptance, revocation, and rejectionAssurance, repudiation, and excuse21 - *Parties must act in good faith in performance of a sales contract [1–203]If express terms conflict with trade usage or past course of dealing, express terms prevail [1–205(4)]Consideration not required for modification, but parties may require a writing [2–209]A party must object to repeated failure of other party to perform or waive rights [2–209(4)]General Rules of The UCC21 - *Basic duty of seller is to deliver (at seller’s place of business) goods that conform to the contract with buyer and basic duty of buyer is to accept and pay for goods if conforming to contract [2–301]Buyer has right of inspectionIf goods conform, buyer pays inspection costs; if non-conforming, buyer may recover expenses from seller [2–513(2); 2–715(1)]UCC Delivery & Inspection 21 - *Once goods accepted, buyer obligated to pay Buyer and seller may agree to payment in money, goods, services, or real propertyInternational sales often use irrevocable letter of credit (diagram on page 526)Payment Under The UCC21 - *Buyer may revoke accepting nonconforming goods if (a) non-conformity substantially impairs value, (b) buyer did not know of non-conformity, (c) buyer relied on seller’s promise to cure [2–608(1)]If buyer rejects a delivery of goods, buyer must act within reasonable time after delivery and give seller notice of rejection, [2–602]Revocation & Rejection21 - *If one party is reasonably concerned other party may not perform, concerned party may demand assurance (reasonable time) from other party that contract will be performedSee Koch Materials Co. v. Shore Slurry Seal, Inc.Commercial impracticability may be excuse for non-performance if performance highly impracticable, unreasonably expensive, or little value to promisee [UCC 2–615]Assurances & Excuses21 - *Test Your KnowledgeTrue=A, False = BGoods are to be delivered at buyer’s place of business unless otherwise specified by contractIf goods delivered conform to the contract, the buyer must pay any expenses of inspection. Buyer may revoke its acceptance of goods not conforming to the contract if the nonconformity substantially impairs the value of the goods21 - *Test Your KnowledgeMultiple ChoiceJersey Steel contracted to deliver 50 M12 metric threaded rods to HomeCo each week for nine months. Four months later, Jersey Steel erected a new sign at their site with name “United Steel.” HomeCo may: (a) Cancel the contract(b) Demand assurances of performance from Jersey Steel (c) Stop any payments until all nine months of deliveries have been received (d) None of the above21 - *Thought QuestionIf you contracted with another party for a long-term sale of goods contract, what kind of activities would prompt you to demand assurances of performance? 21 - *
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