Contract remedies for sales

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Remedies for Breach ofSales and Lease

Contracts

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Remedies

§2: Buyer§2: Buyer§1:Seller§1:Seller

Proceed to Section 3Proceed to Section 3Goods in Buyer’s PossessionGoods in Buyer’s Possession

Seller delivers non-conforming goodsSeller delivers non-conforming goods

Goods are in TransitGoods are in Transit

Goods in Seller’s PossessionGoods in Seller’s Possession

Goods in Seller’s PossessionGoods in Seller’s Possession

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§3: Contractual Provisions Affecting Remedies

Parties to a contract can vary their rights and duties that preempt UCC provisions.

Parties can stipulate whether contractual provisions are “exclusive”. However, provisions limiting consumer rights may be unconscionable.

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§4: Lemon Laws

Automobile under warranty possesses significant defect that affects vehicles use or value that cannot be fixed within statutory period. Buyer’s remedies include: A new car; Replacement of defective parts; Or full refund.

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§5: Remedies for Breach of International Sales

CISG provides remedies similar to the UCC: Monetary damages that are foreseeable,

consequential damages. Damages are difference between contract price

and market price.

Parties can agree to what law they will use.

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Seller- Goods in Seller’s Possession

Seller may withhold delivery of the goods: If material breach by Buyer, Seller can withhold

delivery of all goods. If non-material breach, Seller can withhold

delivery of this installment.

Seller can withhold delivery of all goods if Buyer is insolvent.

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Seller- Goods in Seller’s Possession

Seller may rescind the contract. Seller may identify the goods to the contract. Seller may sell raw materials for scrap or

finish production.

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Seller-Goods in Seller’s Possession

Seller may resell the goods; and Recover damages: the difference between the

contract price and the resale price + incidental damages+ damages = the market price at the time & place of tender + incidental damages - expenses saved.

If No Damages, Seller can sue for lost profits.

Case 22.1: Brandeis Machinery v. Capital Crane Rental (2002).

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Seller-Goods in Seller’s Possession

Seller may sue Buyer for breach of contract. Recover Damages = the market price at the time

& place of tender + incidental damages. if there are no damages, Seller can sue for lost profits.

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Seller-Goods in Transit

Goods are “in transit” when Seller has tendered goods to Carrier.

Goods are in transit until: Buyer is given negotiable document of title to

goods. Buyer is given non-negotiable document of title

or Bailee has acknowledged Buyer’s right to have the goods.

Buyer has had a reasonable time to pick up the goods.

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Seller-Goods in Transit

Seller has the right to stop the goods in transit if: Buyer is insolvent - Seller can stop entire

shipment of goods. Buyer is in breach - Seller may stop a whole

truckload or whole container.

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Seller-Goods in Buyer’s Possession

Seller may sue for the purchase price. Seller may also sue Buyer if goods were

“specially-made” which Seller cannot resell. Seller may also sue for the purchase price if the

goods were destroyed and the risk had already passed to the Buyer.

Seller can reclaim goods received by an insolvent Buyer if demand made within 10 days of receipt.

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Buyer-Goods in Seller’s Possession

Buyer Wants Goods Specific performance or replevin Recover goods from Seller if Seller becomes

insolvent within 10 days after receiving first payment.

Buyer Does Not Want Goods Rescind contract. Cover or do not cover and sue for breach of

contract. Case 22.2: KGM Harvesting v. Fresh Network (1995).

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Buyer-Seller Delivers Nonconforming Goods

If Seller does not make perfect tender Buyer has the right to reject all or part of goods. Buyer must timely notify Seller of rejection and

reasons and follow Seller’s directions. Buyer is entitled to commission for selling

perishable goods. Buyer may store the goods and retain a security

interest in the goods for his costs.

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If Buyer has accepted non-conforming goods, she may: Sue for breach of warranty. Sue for ordinary damages. Deduct damages from purchase price.

Case 22.3: China National Metal Products v. Apex Digital (2001).

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Buyer-Seller Delivers Nonconforming Goods

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§ 3: Contractual Provisions Affecting Remedies

Limitation of Damages. Limitation of Remedies. Waiver of Defenses.

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§ 4: Lemon Laws

The majority of the states have enacted lemon laws in regard to automobile sales.

Seller’s limitations were too “good.” Buyer must:

Give notice. Seller gets four chances to fix. Arbitration: decision binding on manufacturer,

not on Buyer.

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§ 5: Remedies for Breach of International Sales Contracts

CISG provides remedies similar to the UCC. Article 74 provides for money damages,

foreseeable consequential damages. Damages are difference between contract price

and market price. Article 28 provides for specific performance

where a country would normally grant it in their own law.

Parties can agree to what law they will use.