contract of performance of sales
DESCRIPTION
Contract of performance of salesTRANSCRIPT
![Page 1: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/1.jpg)
1
Performance of Salesand Lease Contracts
![Page 2: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/2.jpg)
2
Introduction
Seller must transfer and deliver conforming goods.
Buyer must accept and pay for conforming goods.
In the absence of an agreement between Seller and Buyer, UCC Article 2 controls as set out below.
![Page 3: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/3.jpg)
3
§1: Good Faith Requirement
Good Faith is the foundation of every UCC commercial contract.
Good faith means honesty in fact. For a merchant, it means honesty in fact and
observance of reasonable commercial standards of fair dealing in the trade. Merchants are held to a higher standard of care than non-merchants.
![Page 4: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/4.jpg)
4
§2: Seller-Lessor Obligations
Seller has a duty to “tender” delivery of “conforming goods.”
Tender means “delivery” to agreed place: With reasonable notice. At a reasonable hour. In a reasonable manner. Exactly, unless otherwise agreed.
![Page 5: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/5.jpg)
5
Place of Delivery--Non-Carriers
Buyer picks up at Seller’s place of business or, if Buyer has no place of business, then Buyer’s residence.
If both parties know the goods are elsewhere (at a warehouse), then place of delivery is where the goods are.
![Page 6: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/6.jpg)
6
Place of Delivery--Carriers
Shipment contracts. Seller has a duty to: Put goods into hands of independent carrier. Make contract for transportation. Obtain and promptly deliver or tender to the Buyer
any documents necessary. Promptly notify Buyer that shipment has been made.
Destination contracts. Seller has duty to: Tender the goods at a reasonable hour and hold
conforming goods at the Buyer’s disposal for a reasonable period of time.
![Page 7: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/7.jpg)
7
The Perfect Tender Rule
If goods, or tender of delivery, fail in any respect to conform to the contract, the Buyer has the right to: Accept the goods; Reject the entire shipment; or Accept part and reject part.
![Page 8: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/8.jpg)
8
Click on the Links Below
Exceptions to the Perfect Tender Rule
Agreement of the Parties. Cure. Substitution of Carriers. Installment contracts. Commercial Impracticability. Destruction of Identified goods. Partial Performance. Proceed
![Page 9: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/9.jpg)
9
§3: Buyer-Lessee Obligations
Furnish facilities reasonably suited for receipt of the goods.
Make payment at the time and place the Buyer receives the goods. Credit has to be prearranged.
Credit period begins on the date of shipment.
Pay with cash, credit card, check. But if Seller asks for cash, Seller has to give Buyer
time to get cash.
![Page 10: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/10.jpg)
10
Buyer’s Obligations
Buyer has right to inspection before paying: Costs of inspection borne by Buyer. However, C.O.D., C.I.F. and C&F give Buyer no
right to inspect.
![Page 11: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/11.jpg)
11
Acceptance
Buyer can accept goods: By words or conduct. If Buyer had reasonable amount of time and failed
to reject. Buyer performs an act which indicates he thinks
he is the owner.
Partial Acceptance.
![Page 12: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/12.jpg)
12
Revocation of Acceptance
Notify Seller of breach. Revoke only if substantial nonconformity;
and Buyer accepted on the reasonable assumption that
the Seller would cure the non-conformity OR Buyer did not discover the nonconformity because defect was latent or hard to discover.
![Page 13: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/13.jpg)
13
§4: Anticipatory Repudiation
Party communicates he will not perform by time of contract performance.
Nonbreaching party may suspend performance and: Treat the A.R. as material breach and pursue a
remedy; or Wait a reasonable time.
Case 21.3: Banco International v. Goody’s Family Clothing (1999).
![Page 14: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/14.jpg)
14
§5: International Contracts and Letters of Credit
Parties. Account: Buyer. Issuer: Bank. Beneficiary: Seller.
Issuer is bound to pay the beneficiary who has complied with the terms and conditions of the letter of credit, usually requiring a bill of lading to the issuer to prove shipment has been made.
![Page 15: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/15.jpg)
15
Law on the Web
Pace U. website on International Sale of Goods.
Legal Research Exercises on the Web.
![Page 16: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/16.jpg)
16
Agreement of the Parties Agreement of the Parties
Parties agree that some defective goods will be acceptable.
Parties agree that defective goods can be replaced or repaired within a certain time.
Return
![Page 17: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/17.jpg)
17
Seller’s Cure
Seller has the right to “Cure” (ship conforming goods to Buyer) if: Agreed time of performance has not yet expired;
or If Seller had reasonable grounds to expect that
Buyer would accept non-conforming goods, i.e., these goods are better than goods ordered, or Buyer has accepted non-conforming goods in the past.
Return
![Page 18: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/18.jpg)
18
Substitution of Carriers
If a carrier becomes impracticable or unavailable through no fault of either party, a commercially reasonable substitute is acceptable.
Return
![Page 19: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/19.jpg)
19
Commercial Impracticability
Occurrence of an unforeseen contingency that makes performance impracticable.
Nonoccurrence was a basic assumption on which the contract was made.
If only partial impracticability, Seller must allocate what he/she has.
Case 21.1: Maple Farms v. City School District of Elmira (1974).
Return
![Page 20: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/20.jpg)
20
Installment Contracts
Installment Contracts can be rejected if: installment is substantially non-conforming and
can’t be cured. non-conforming installment substantially impairs
the entire contract.
Return
![Page 21: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/21.jpg)
21
Destruction of GoodsDestruction of Goods
If no fault of either party and it occurs Before risk passes to Buyer then Both Seller and Buyer are excused from
performance.
Return
![Page 22: Contract of performance of sales](https://reader033.vdocuments.site/reader033/viewer/2022061110/5453e48eaf795908308b58fa/html5/thumbnails/22.jpg)
22
Partial PerformancePartial Performance
Sometimes unforeseen event only partially affects Seller’s capacity to perform.
In that event, Seller has duty to reasonably allocate any remaining production capacity to fulfilling contractual performance.
Buyer has the right to reject. Case 21.2: Kock Materials Co. v. Shore
Slurry Seal, Inc. (2002).Return