Exam 27: Remedies for Breach of Sales Contracts

Peter contracted to purchase five (5)cases of soda and a vacuum cleaner because Peter was planning a party for his son's graduation.Both contract forms that Peter signed contained exclusion of damages clauses;i.e. ,each contract stated that the buyer had no right to sue the seller in the event that the goods were defective.Instead,each seller's sole obligation was to replace or repair the defective goods within a reasonable time of being notified of the defect(s).These clauses in the contract were set forth in the ordinary type of the contract and were not especially conspicuous. The vacuum cleaner was delivered on Friday,the day before the party,when the rugs in Peter's home were quite dirty.The vacuum cleaner did not work properly.Peter notified the seller,who responded by saying that nothing could be done until the following week.Frantic because guests were coming,Peter hired a cleaning service to clean the rugs. While serving the soda to guests,one of the bottle caps burst from an unopened bottle with great force.It struck Peter in the eye and he required medical treatment and hospitalization. Eventually,Peter sued both sellers for damages.Peter sought the expense of the cleaning service from one.From the other,Peter sought damages for personal injury,including his medical and hospitalization expenses.Both defendant-sellers cited the exclusion of damages clauses as their defense.

When goods are sold for consumer use and personal injuries are sustained,a total exclusion of liability in the sales contract is:

A cured transaction is a pledge of property by the buyer-debtor that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.

A buyer seeking damages because of a breach of the sales contract must give the seller notice of the breach within a reasonable time after the buyer discovers or should have discovered it.

In the absence of a liquidated damages clause and in the absence of proof of greater damages,the seller's damages are computed as

The tort statutes of limitations tend to be __________the UCC statute of limitations.

When a sales contract is broken by the buyer,the seller has only the remedies of lien and resale available.

Consumer protection law prohibits the waiver of defenses in consumer contracts.

A buyer returning to the seller a raincoat that shrank in the rain is revoking acceptance.

If a buyer chooses to cover the substituted goods purchased must be substantially identical to the contract goods.

Rejection of an improper tender of goods constitutes a revocation of acceptance on the part of the buyer.

In the absence of an agreement for the extension of credit to the buyer for the purchase of goods,and until the buyer pays for the goods or performs whatever actions the contract requires,the seller has the right to retain possession of the goods.

The buyer may cancel the contract if the:

When a buyer materially breaches a contract,the seller may cancel it.

The UCC statute of limitations applies to actions brought for remedies on the breach of a sales contract.

A defrauded buyer may avoid the contract and recover damages.

A seller does not have the right to stop shipment if the buyer has received goods on credit and the seller learns that the buyer is insolvent.

In the case of a breach of warranties,the buyer:

The UCC statute of limitations applies when a party is seeking recovery on strict tort liability,fraud or negligence.

Under UCC Article 2,specific performance is a remedy available only to buyers in those circumstances in which the goods are specially manufactured,unique,or rare.