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Obligation

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An action a party to a sales or lease contract is required by law to carry out

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Breach

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Failure of a party to perform an obligation in a sales or lease contract

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Tender of Delivery

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The obligation of a seller to transfer and deliver goods to the buyer in accordance with a sales contract

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Shipment Contract

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A sales contract that requires the seller to send the goods to the buyer, but not to a specifically named destination

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Destination Contract

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A sales contract that requires the seller to deliver the goods to the buyer's place of business or another specified destination

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Perfect Tender Rule

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A rule that says if the goods or tender of a delivery fail in any respect to conform to the contract, the buyer may opt either (1) to reject the whole shipment, (2) to accept the whole shipment, or (3) to reject part and accept part of the shipment

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Cure

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An opportunity to repair or replace defective or nonconforming goods

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Installment Contract

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A contract that requires or authorizes goods to be delivered and accepted in separate lots

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C.O.D. Shipment

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A type of shipment contract in which the buyer agrees to pay the shipper cash upon delivery of the goods

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Acceptance

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An act that occurs when a buyer or lessee takes any of the following actions after reasonable opportunity to inspect the goods: (1) signifies to the seller or lessor in words or by conduct that the goods are conforming or that the buyer or lessee will take or retain the goods despite their non-conformity or (2) fails to effectively reject the goods within a reasonable time after their delivery or tender by the seller or lessor. Acceptance also occurs if a buyer acts inconsistently with the seller's ownership rights in the goods

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Revocation

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Reversal of acceptance

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Witholding Delivery

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The act of a seller or lessor purposefully refusing to deliver goods to the buyer or lessee upon breach of contract or the insolvency of the buyer or lessee.

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Stopping Delivery of Goods in Transit

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A seller or lessor stopping delivery of goods in transit if he or she learns of the buyer or lessee's insolvency or if the buyer or lessee repudiates the contract, fails to make payment when due, or gives the seller or lessor some other right to withhold the goods

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Reclamation

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The right of a seller or lessor to demand the return of goods from the buyer or lessee under specified situations

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Disposition of Goods

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Disposal of goods in a good faith and commercially reasonable manner. A seller or lessor who is in possession of goods at the time the buyer or lessee breaches or repudiates the contract may in good faith resell, release, or otherwise dispose of goods in a commercially reasonable manner and recover damages, including incidental damages, from the buyer or lessee

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Incidental Damages

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Reasonable expenses incurred in stopping delivery, transportation charges, storage charges, sales commission, and so on

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Recovery of the Purchase Price or Rent

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Recovery of the contracted-for purchase price or rent from the buyer or lessee if (1) if the buyer or lessee fails to pay for accepted goods, (2) if the buyer or lessee breaches the contract and the seller or lessor cannot dispose of the goods, or (3) if the goods are damaged or lost after the risk of loss passes to the buyer or lessee

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Recovery of Damages

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Recovery of damages measured as the difference between the contract price (or rent) and the market price (or rent) at the time and place the goods were to be delivered, plus incidental damages, from a buyer or lessee who repudiates the contract or wrongfully rejects tendered goods

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Cancellation

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Cancellation of a sales or lease contract by a seller or lessor if the buyer or lessee rejects or revokes acceptance of the goods, or repudiates the contract in part or whole

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Rejection of Non-Conforming Goods

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A situation in which a buyer or lessee rejects goods that do not conform to the contract. If the goods or the seller or lessor's tender of delivery fails to conform to the contract, the buyer or lessee may (1) reject the whole, (2) accept the whole, or (3) accept any commercial unit and reject the rest

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Recovery of Goods from an Insolvent Seller or Lessor

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A buyer or lessee who has wholly or partially paid for goods before they are received recovering the goods from a seller or lessor who becomes insolvent within 10 days after receiving the first payment; the buyer or lessee must tender the remaining purchase price or rent due under the contract

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Specific Performance

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A decree of the court that orders a seller or lessor to perform his or her obligations under the contract; usually occurs when the goods in question are unique, such as art or antiques

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Cover

answer

The right of a buyer or lessee to purchase or lease substitute goods if a seller or lessor fails to make delivery of the goods; if the seller or lessor repudiates the contract; or if the buyer or lessee rightfully rejects the goods or justifiably revokes their acceptance

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Replevin

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An action by a buyer or lessor to recover scarce goods wrongfully withheld by the seller or lessor

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Cancellation

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A buyer or lessee's cancellation of a sales or lease contract if the seller or lessor fails to deliver conforming goods or repudiates the contract; or if the buyer or lessee rightfully rejects the goods or justifiably revokes acceptance of the goods

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Damages

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Damages a buyer or lessee recovers from a seller or lessor who fails to deliver the goods or repudiates the contract. Damages are measured as the difference between the contract price (or original rent) and the market price (or rent) at the time the buyer or lessee learned of the breach

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Damages for Accepted Non-Conforming Goods

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A buyer or lessee's acceptance of non-conforming goods and recovery of damages caused by the breach from the seller or lessor and deduction of damages from any part of the purchase price or rent still due under the contract

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Adequate Assurance of Performance

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Adequate assurance of performance from the other party if there is an indication that the contract will be breached by that party

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Anticipatory Repudiation

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The repudiation of a sales or lease contract by one of the parties prior to the date set for performance

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UCC Statute of Limitations

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A rule the provides that an action for breach of any written or oral sales or lease contract must commence within 4 years after the cause of action accrues. The parties may agree to reduce the limitations period to one year

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Liquidated Damges

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Damages that will be paid upon a breach of contract and that are established in advance

Chapter 20: Remedies for Breach of Sales and Lease Contracts – Flashcards

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