Exam 14: Performance and Breach of Sales and Lease Contracts

EconBank issues a letter of credit in favor of Facile Deals Inc., a U.S. firm, to facilitate an international sales contract to buy certain products from Global Goods, Ltd., a British company. Global is entitled to payment when it

The doctrine of commercial impracticability only extends to problems that are unforeseen.

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule

Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.

When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.

Dairy Goods agrees to sell a certain quantity of ice cream to Event Caterers, but their contract does not specify the address at which the goods are to be delivered. If the parties fail to specify the address before the delivery date

Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are delivered in a damaged condition. Speedy's

If goods in every respect conform to a contract, the buyer or lessee does not have a right to reject the goods.

A shipment contract requires a seller to ship goods by a carrier.

Under the UCC, parties to a contract can limit or exclude consequential damages.

Medical Supply Company and Health Care, Inc., enter into a contract for a sale of medical equipment and supplies. Under either a shipment contract or a destination contract, the seller must

Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover

Under the UCC, a seller's tender of goods that do not conform in every way to a contract is still a valid tender.

Tender must occur at a reasonable hour and in a reasonable manner.

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

River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can

Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal, but not that the goods be conforming.

If a lessee breaches a contract, the lessor can cancel the contract.

Fact Pattern 14-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. -Refer to Fact Pattern 14-1.Enriched can​