Exam 12: Performance and Breach in Sales and Lease Contracts

Implied warranties can arise from a "usage of trade."​

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner's manager notices that some of the cartons have scrape marks. Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15. Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.

Revocation of acceptance is not effective until notice is given to the seller or lessor.

In the absence of any specific agreements, the buyer or lessee must make payment after receipt of the goods.

Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is​

Refer to Fact Pattern 12-1. Flat Bread's refusal is

On May 1, Garage Prefabricators, Inc., agrees to sell four portable garages to Hiway Truck Service Center. Five days later, Hiway refuses delivery and cancels the contract. Garage Prefabricators is entitled to

MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is​

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.

If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.

Greg, a salesperson for Home Improvement Center, tells Irena, "This is the best floor sander I've ever seen." This statement is​

To specifically disclaim an implied warranty of fitness for a particular purpose, a seller or lessor must mention the word fitness.

If either the goods or their tender of the goods by the seller or lessor, fails to conform to the contract in any respect, the buyer or lessee must reject all of the goods.

Pebble Leasing Corporation and Quarry Rock & Gravel Company enter into a lease of three excavators. Under the perfect tender rule, Pebble Leasing must ship or tender goods to Quarry Rock & Gravel that, with respect to the contract description, conform​

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can pursue the following relief

Replay Sports Stores and Sports Power Products, Inc., enter into a contract for a sale of trampolines. Sports Power Products is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises​

Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of healthcare equipment and supplies. Under either a shipment contract or a destination contract, the seller must

To be merchantable, goods must be at least average, fair, or medium-grade quality.

In sales law, failing to examine the goods and refusing to examine the goods are considered the same thing.

In most sales, sellers warrant that they have good and valid title to the goods sold.