Exam 22: Performance

Parties may not contractually agree to limit the operation of the perfect tender rule.

Payment of a C.O.D. shipment constitutes an acceptance of the goods.

Edna orders a set of china from Northwestern Catalog. Northwestern sends the dishes by UPS. The contract does not specify when payment is to be made. Edna must pay when:

Under the CISG, if prior to the date for performance of the sales contract it is clear that one of the parties will commit a fundamental breach, the other party may declare the contract avoided.

Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day. Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left 12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30 a.m., Mary went into the freezer to shelve the milk products and discovered that all 12 crates contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim milk, and cream variety she had ordered. What is her obligation with regard to the goods?

Goods are to be sent F.O.B. Buffalo, NY to Raleigh, NC by UPS. Where does tender occur?

In which of the following situations does the seller have the right to cure?

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?

A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses not to exceed five percent of the gross proceeds.

Burnside Roofing contracts to sell asphalt and metal shingles to Faubush Contractors. Burnside, through no fault of its own, is unable to deliver the shingles to Faubush by rail as agreed because that type of carrier is unavailable. Explain what the UCC requires.

John entered into a contract with Miriam to build her a walnut dining room table for $1,000. A few days later, the price of walnut lumber increased 200%, which will result in John's incurring a $300 loss on the table. Due to the price increase, John is automatically excused from performance under the contract.

Drapery Makers has signed a contract to make and sell to Hyer curtains for 20 windows by March 31. Hyer, however, delays in giving Drapery Makers the dimensions it needs to know in order to do the work. In this case, Drapery Makers:

The CISG follows the perfect tender rule, as does the Code.

If no place of tender is indicated by the contract, it is presumed delivery is to be made at the buyer's place of business.

If a buyer accepts part of a shipment and rejects part of a shipment, he must pay for the items he keeps at the contract rate.

In an installment contract, the buyer may reject any nonconforming installment if the nonconformity substantially impairs the value of that installment and cannot be cured.

The buyer's payment or tender of payment, unless otherwise agreed, is a condition to the seller's duty to tender and to complete delivery.

A contract that is FOB Dallas where the seller is in Chicago and the buyer is in Dallas is a destination contract.

The Code provides that where neither party is at fault and the agreed manner of delivering the goods becomes commercially impracticable, a substituted manner of performance, if commercially reasonable, must be tendered and accepted.

Rejection is ineffective unless the buyer notifies the seller.