Bài giảng Business Law (13th edition) - Chapter 22: Remedies for Breach of Sales Contracts

Agreements as to Remedies Parties may agree contractually to remedies Liquidated damages clause: parties agree on amount of damages to pay to injured party Limitation or exclusion clause: parties agree to limit either the remedies available by law or the damages that can be covered [2–719(1)] See Star-Shadow Productions, Inc. v. Super 8 Sync Sound System

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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.Remedies for Breach of Sales ContractsPAETRHC22“Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied.”Pearl S. Buck, novelist, What America Means to Me (1943)Learning ObjectivesAgreements as to remediesSeller’s remediesBuyer’s remedies22 - *Parties may agree contractually to remediesLiquidated damages clause: parties agree on amount of damages to pay to injured partyLimitation or exclusion clause: parties agree to limit either the remedies available by law or the damages that can be covered [2–719(1)]See Star-Shadow Productions, Inc. v. Super 8 Sync Sound SystemAgreements as to Remedies22 - *If buyer breaches contract and seller has manufactured goods, seller may: Cancel contract [2–703(f)] and withhold delivery of goods [2–703(a)]Resell goods, recover damages [2–706]Recover purchase price of goodsRecover damages for rejection/repudiationIf goods in transit, seller may stop shipmentUCC Seller’s Remedies22 - *Under the CISG, a seller has five remedies when buyer breaches the contract: suspend seller’s performance, avoid the contract, reclaim the goods from buyer, an action for the price, or an action for damagesUnder the CISG, a buyer has four remedies: avoid contract, adjust price, obtain specific performance, an action for damagesThe CISG and Remedies22 - *Buy other goods (cover) and recover added expense damages from seller [2–712]Recover damages for difference between contract and current market price [2–713]Recover damages for nonconforming goods accepted; difference in value between received and expected goods [2–714]Obtain specific performance for unique goods not available elsewhere [2–716]UCC Buyer’s Remedies22 - *Test Your KnowledgeTrue=A, False = BIf buyer refuses to accept conforming goods, seller may recover damages, such as lost profitIf an insolvent buyer has the goods, the seller may reclaim the goods from buyerIf seller breaches the contract by failing to deliver the goods, buyer may “cover” and recover damages22 - *Test Your KnowledgeMultiple ChoiceWidgets agreed to deliver 500 cases of grommets to ToyCo by Sept. 1. Widgets knew ToyCo needed the grommets to make toys for delivery by Dec. 1. Widgets delivered the order Nov. 29. ToyCo may:(a) buy grommets elsewhere to cover(b) sue for damages(c) obtain specific performance(d) both A and B(e) all of the above22 - *Thought QuestionsNancy had a car to sell that she knew had been in an accident and repaired. Is it ethical to sell a damaged and repaired car without telling the potential buyer? Does your answer change if Nancy owned a car dealership or a specialty car manufacturing company?22 - *