Contract remedies for sales

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Contract remedies for sales

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Contract remedies for sales

  1. 1. Remedies for Breach of Sales and Lease Contracts
  2. 2. Remedies Click on the Links Below §2: Buyer §1:Seller Proceed to Section 3 Goods in Buyer’s Possession Seller delivers non-conforming goods Goods are in Transit Goods in Seller’s Possession Goods in Seller’s Possession
  3. 3. §3: Contractual Provisions Affecting Remedies <ul><li>Parties to a contract can vary their rights and duties that preempt UCC provisions. </li></ul><ul><li>Parties can stipulate whether contractual provisions are “exclusive”. However, provisions limiting consumer rights may be unconscionable. </li></ul>
  4. 4. §4: Lemon Laws <ul><li>Automobile under warranty possesses significant defect that affects vehicles use or value that cannot be fixed within statutory period. Buyer’s remedies include: </li></ul><ul><ul><li>A new car; </li></ul></ul><ul><ul><li>Replacement of defective parts; </li></ul></ul><ul><ul><li>Or full refund. </li></ul></ul>
  5. 5. §5: Remedies for Breach of International Sales <ul><li>CISG provides remedies similar to the UCC: </li></ul><ul><ul><li>Monetary damages that are foreseeable, consequential damages. </li></ul></ul><ul><ul><li>Damages are difference between contract price and market price. </li></ul></ul><ul><li>Parties can agree to what law they will use. </li></ul>
  6. 6. Seller- Goods in Seller’s Possession <ul><li>Seller may withhold delivery of the goods: </li></ul><ul><ul><li>If material breach by Buyer, Seller can withhold delivery of all goods. </li></ul></ul><ul><ul><li>If non-material breach, Seller can withhold delivery of this installment. </li></ul></ul><ul><li>Seller can withhold delivery of all goods if Buyer is insolvent. </li></ul>Next
  7. 7. Seller- Goods in Seller’s Possession <ul><li>Seller may rescind the contract. </li></ul><ul><li>Seller may identify the goods to the contract. </li></ul><ul><li>Seller may sell raw materials for scrap or finish production. </li></ul>Next
  8. 8. Seller-Goods in Seller’s Possession <ul><li>Seller may resell the goods; and </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>If No Damages, Seller can sue for lost profits. </li></ul></ul><ul><li>Case 22.1: Brandeis Machinery v. Capital Crane Rental (2002). </li></ul>Next
  9. 9. Seller-Goods in Seller’s Possession <ul><li>Seller may sue Buyer for breach of contract. </li></ul><ul><ul><li>Recover Damages = the market price at the time & place of tender + incidental damages. </li></ul></ul><ul><ul><ul><li>if there are no damages, Seller can sue for lost profits. </li></ul></ul></ul>Return
  10. 10. Seller-Goods in Transit <ul><li>Goods are “in transit” when Seller has tendered goods to Carrier. </li></ul><ul><li>Goods are in transit until: </li></ul><ul><ul><li>Buyer is given negotiable document of title to goods. </li></ul></ul><ul><ul><li>Buyer is given non-negotiable document of title or Bailee has acknowledged Buyer’s right to have the goods. </li></ul></ul><ul><ul><li>Buyer has had a reasonable time to pick up the goods. </li></ul></ul>Next
  11. 11. Seller-Goods in Transit <ul><li>Seller has the right to stop the goods in transit if: </li></ul><ul><ul><li>Buyer is insolvent - Seller can stop entire shipment of goods. </li></ul></ul><ul><ul><li>Buyer is in breach - Seller may stop a whole truckload or whole container. </li></ul></ul>Return
  12. 12. Seller-Goods in Buyer’s Possession <ul><li>Seller may sue for the purchase price. </li></ul><ul><ul><li>Seller may also sue Buyer if goods were “specially-made” which Seller cannot resell. </li></ul></ul><ul><ul><li>Seller may also sue for the purchase price if the goods were destroyed and the risk had already passed to the Buyer. </li></ul></ul><ul><li>Seller can reclaim goods received by an insolvent Buyer if demand made within 10 days of receipt. </li></ul>Return
  13. 13. Buyer-Goods in Seller’s Possession <ul><li>Buyer Wants Goods </li></ul><ul><ul><li>Specific performance or replevin </li></ul></ul><ul><ul><li>Recover goods from Seller if Seller becomes insolvent within 10 days after receiving first payment. </li></ul></ul><ul><li>Buyer Does Not Want Goods </li></ul><ul><ul><li>Rescind contract. </li></ul></ul><ul><ul><li>Cover or do not cover and sue for breach of contract. Case 22.2 : KGM Harvesting v. Fresh Network (1995). </li></ul></ul>Return
  14. 14. Buyer-Seller Delivers Nonconforming Goods <ul><li>If Seller does not make perfect tender Buyer has the right to reject all or part of goods. </li></ul><ul><ul><li>Buyer must timely notify Seller of rejection and reasons and follow Seller’s directions. </li></ul></ul><ul><ul><li>Buyer is entitled to commission for selling perishable goods. </li></ul></ul><ul><ul><li>Buyer may store the goods and retain a security interest in the goods for his costs. </li></ul></ul>Next
  15. 15. <ul><li>If Buyer has accepted non-conforming goods, she may: </li></ul><ul><ul><li>Sue for breach of warranty. </li></ul></ul><ul><ul><li>Sue for ordinary damages. </li></ul></ul><ul><ul><li>Deduct damages from purchase price. </li></ul></ul><ul><li>Case 22.3: China National Metal Products v. Apex Digital (2001). </li></ul>Buyer-Seller Delivers Nonconforming Goods Return
  16. 16. § 3: Contractual Provisions Affecting Remedies <ul><li>Limitation of Damages. </li></ul><ul><li>Limitation of Remedies. </li></ul><ul><li>Waiver of Defenses. </li></ul>
  17. 17. § 4: Lemon Laws <ul><li>The majority of the states have enacted lemon laws in regard to automobile sales. </li></ul><ul><li>Seller’s limitations were too “good.” </li></ul><ul><li>Buyer must: </li></ul><ul><ul><li>Give notice. </li></ul></ul><ul><ul><li>Seller gets four chances to fix. </li></ul></ul><ul><ul><li>Arbitration: decision binding on manufacturer, not on Buyer. </li></ul></ul>
  18. 18. § 5: Remedies for Breach of International Sales Contracts <ul><li>CISG provides remedies similar to the UCC. </li></ul><ul><li>Article 74 provides for money damages, foreseeable consequential damages. </li></ul><ul><ul><li>Damages are difference between contract price and market price. </li></ul></ul><ul><li>Article 28 provides for specific performance where a country would normally grant it in their own law. </li></ul><ul><li>Parties can agree to what law they will use. </li></ul>

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