Contracts UCC | Damages | Implied Warranty

1-103 CL controls unless expressly contradicted by UCC provision 1-106 General stuff about Remedies 1.

1-106(1)--Remedies to be liberally administered 2. 1-106(1)--Measure using party's expectation interest a. Don't overcompensate parties (Luten bridge) 1-107 Waiver of claim after breach 1. Deals w/Foakes situation 2. Must be in writing and rt. arising out of br/k 1-201(19) Def. of good faith: Honest in fact (non-merchant) 1-204(2) Reasonable time definition 1. Depends on nature, purpose, and circumstances 1-207 Accepting accord and satisfaction 1. Says person can accept part performance w/o giving up rts. to rest of disputed claim 2. Doesn't supercede CL (see 1-103) 2-102 Scope of the sales article 1. Applies to transactions in goods 2-103(b) Def. of good faith for a merchant 1. Honest in fact AND observance of comm. standards of fair dealing in trade 2-104 Def. of Merchant 1. Deals in goods of the kind involved in transaction 2-105 Definition of Goods 1. Includes goods under 2-107: severed from realty by the seller

2-201 Statute of Frauds 1. 2-201(1)--K for $500 or more must be in writing 2. 2-201(1)--K doesn't have to be completely in writing but must have quantity of goods Comment 1: very liberal, lead pencil on scratch pad enough. 3 reqs: a. Evidences k for sale of goods b. Is signed by other party c. Specifies a quantity 3. 2-201(3)--K if not in writing still enforceable if: a. Seller started on specially manufactured goods for buyer b. Breaching party admits in pleading to k c. Payment has been made or goods have been received (k has been completed) 2-202 Parol Evidence Rule 1

2-305 open price term 1) 2-305(1)--reas. but they fall if 1) k is not between merchants 2) 2-207(a)--original offer limited to its terms 3) 2-207(b)-. time or offor can treat offer as having lapsed 2.added term is material 4) 2-207(c)--offor objects to new term 2 . 2-310 open time for payment term e. then S has simultaneously accepted B's original offer and breached it a. 3--wouldn't be collateral agreement 1) Standard is certainly would include 2. and nonconforming tender 1. 1 suggests liberal standard for ambiguous 2-204 Indefiniteness 1. 2-204(3)--won't fail for indefiniteness if a. 2-308 open place of delivery term c. May use all CL exceptions to PER by 1-103 a. S can call tender "accommodation to k" and this is classified as a counter offer that B may accept or reject 2-207 Written acceptance doesn't match terms of offer 1. Yes: 2-207(3) no k unless k from conduct of parties 1) If is k now. Contradict terms of k b. 2-206(1)(a)--offer can be accepted by perf. Parties intended to be bound b. Must promise to keep offer open for a period of time (limit is 3 months but liable up to it) c. or promise unless says otherwise a. No: 2-207(2) have k w/additional terms. Gapfillers a.1. 2-314 assume implied warranties exist 2-205 Firm offers (options) 1. 2-206(2)--if accept by action offee must notify offor in a reas. then a) Take all terms agreed on b) Use presumptive gap fillers for rest (2-204) b. Applies to keep offer open or have k but may cancel (Gurfein) 2-206 How to accept an offer. Offer signed by offeror b. COD or UT 1) Comm. Reasonably certain basis for giving an appropriate remedy 2. 2-311(2) open assortment term picked by buyer f. 2-202(a)--interpret ambiguous term by COP. 2-207(1) is different acceptance expressly conditional a. 2-202 comm. Requirements a. price at time of delivery b. Only applies to merchants 2. 2-202(b)--completely intergrated c. time] d. 2-206(1)(b)--if S sends nonconforming tender but doesn't tell B of this. 2-309 open time for delivery term [2-309(1)-reas. 3 requirements (must show one doesn't exist to get past PER) a.

Imposes duty of GF on B and S (use for actual reqs. 2-313(1) how created: 3 . 2-306(1)--requirements and outputs a. 2-209(1)--don't need con. Foreseeable change in cost good enough reason (comm. Use as supplemental test to 2-316 and 2-719 which should use 1st 2-306 Outputs. GF measured same way by comm. to k b/c 2-207 presupposes accept. 4. Comment 1: Principle is one of the prevention and unfair surprise. 2) 2. rel. (best cost avoider--A & M Produce) 2) High price unconsc. 2-209(2)--oral mod. won't modify written "no oral mod" clause a. Measure at time k was made 2. 2-209(3)--must meet SOF a. Has duty of best efforts as measured by industry standards (Bloor) b. Don't fail for lack of mutuality b. 2-209(5)--can waive if det. Remember waiver of 1-107 requires br/k 2-302 Unconscionable contract or clause 1. and this is just a cntr-offer (2-206) 2-208 Interpreting intent of contract 1. Requirements and Exclusive Dealings contracts 1. Procedural 1) k of adhesion 2) Unfair surprise b. Order can't be unreasonabley disproportionate if is 1) Might void whole k (Loudenback) 2) Just void over reasonable order 2. rel.) 1) Jobber has no actual reqs. 2-209(5)--can waive if det. CL rule) but must be consented to a. standards (Paramount) of oppression 2-313 Express warranties 1. 4) d. Usage of trade 2-209 Modifications and Waiver (Linz) 1. 4. 2) b. Indefiteness won't void b/c fill in quantity w/historical demand or supply TWO REQUIREMENTS: c. 3. Test for procedural and substantive a. 2-306(2)--exclusive dealings a. This doesn't apply if acceptance is tender that is accomm. d.2. (rev. Express provisions b. Modification must be in GF (comm. COP c. 2-208(2) a. (Kugler) 3. Adhesion 1) Ask what would people bargain for if no procedural unconsc. COD [controls usage of trade 1-205(4)] 1) Single occassion doesn't make COD (Comm.

2-313(c)--sample or model creates EW 2. If can't. Knew of defect but thought could fix c.2--normal procedure is "with reserve" 2-508 Seller's right to Cure 1. If B finds out can 1) Pay last GF bid 2) Void the sale 3. B relying on S's skill or judgement 2-316 Disclaimer of warranties 1. Comment 1 says have mutuality 2-328 Auctions 1. 2-328(4)--S may salt crowd a. 2-314(1)--only implied if merchant 2. 2-508(2)--Seller may cure if delivery on k date if a. S has reason to know of B's particular purpose for good b. 2-314(2)--standard of IWM a. Didn't know of defect (thought good acceptance) b.a. 2-316(3)(c)-.can disclaim IW by COD. 2-316(2)--can only disclaim IWM if use word merchantability a. defined as RM ought to notice it 2-326 Sale on approval 1. In some states 2-316 trumps 2-202 or interpret 2-202 very liberally (Owens) 2.affirmation of fact or promise by words that forms basis of bargain b. 2-316(3)(a)--exception disclaim IWM if use words "as is" b. 2-313(b) comm. Knew of defect and thought could pay buyer for it (Provision requires reasonable grounds to think was acceptable) Comment 2: Reasonable grounds includes particular circs. 2-313(2) affirmation of fact v. 5--description don't need to be by words c. 2-508(1)--Seller may cure if delivery made befor k date 2. EW affirmation of fact or promise 2-314 Implied warranty of merchantability 1. 2-316(2)--to disclaim. invalidate disclaimer c. COP or trade usage 3. disclaimer must be conspicuous a. Cure must be done in reasonable time [Reasonable time can be cut 4 . 2-313(a)-. Two reqs. 2-314(2)(c)--fit for ordinary purposes intended 1) Determine if fit look to trade custom 2) Determine who's purpose counts by trade custom 2-315 Implied warranty of fitness for particular purpose 1. comm. puffery a. 2-316(1)--can only disclaim EW by PER (2-202) a. interpret EW consistent w/disclaimer b. If can't disclaim. 3. a. 1-201(10)--consp. Puffing statement of value or opinion b. 2-328(2)--bids are offers 2.

2-602(2)(b)--Buyer has goods in po. 2-608(1)(b)--Accepted good w/substantial defect but didn't know it existed and wouldn't have discovered w/reasonable inspection OR seller's assurances Comment 3: Seller's assurances can come from circs. Commercially reasonable time measured as: 1) How definite repudiation is 2) How easy to cover somewhere else 3) Industry custom to cover 2. If accepts non-conforming tender. won't allow cure under 2-508(2) unless on form k and then must see if out of line w/trade usage 2-601 Buyer's Perfect Tender Rule 1. change in goods not caused by own defects a.. to cure Comment 5: Notice predicated on allowing seller reasonable adjustment Some cts. If difficult to tell extent of damage due to substantial defect and damage from change of goods use 2-714 4. 4. 2-602(2)(b)--Rightful rejection go to 2-711 5. 2-608(2)--Seller has rt. 2-610(b)--Resort to 2-703(seller) or 2-711(buyer) 3.back drastically if buyer needs item quickly (Ramirez)] Comment 3: Determine reasonable time by attendant circs. 2-602(1)--Only effective if seasonably notifies seller and rejects in reasonable time after delivery or tender 2. Comment 4: Don't necessarily have to notify repudiating unless taking affirmative action requiring notice (2-706 private or public resale) (2-711) party 1st. under DUTY to hold them w/reasonable care for a time sufficient for seller to remove them. still can use 2-714 2-602 Buyer's Rejection of Goods must be Reasonable 1. 2-610(a)--Other party may wait for commercially reasonable time after which or instead of or duting go to-a.. Comment 2: "No replacement" clause in a K. seller goes to 2-703 2-603 Buyer's duties to sell goods 2-605 Buyer must state particular defect 2-608 Buyer's Revocation of Acceptance 1. k. 2-608(1)(a)--Accepted good w/substantial defect w/assurance defect would be fixed in seasonable time Comment 2: Substantial defect is def. Seller has access to right to cure (2-508) 3. 2-608(3)--Buyer has same rts. 2-602(3)---Wrongful rejection. or explicit language used at time of delivery 3. as whether the nonconformity is such to cause a substantial impairment of value to the buyer 2. 4. and duties as if rejected goods 2-610 Anticipatory Repudiation (Seller/Buyer) 1. 2-608(2)--Buyer must revoke in reasonable time and no substant. 5 . (TX) DON'T allow cure by seller 5. Goods don't conform in any way may reject whole (Determine if rejection correct under 2-602) 2.

2-704(2)--Allows seller to complete (even if haven't started) 6 remedies are under . 2-704(1)(a)--Seller can identify goods after the k has been br. Comm.. 2-612(1): Def. Comm. 2-703(a)--Seller can keep goods not yet delivered 3. Section doesn't apply to B b/c he can always pay money 3. a. sub. Shortage of supplies due to war. No comm. 1--risk must be unforeseeable (not dispositive) b.4) a. 5--if S exclusive supply is destroyed this applies 2. 2-614(1)--2 reqs. crop failure. 2-703(d)--Seller can resell and recover damages from 2-706 5. Not fault of either party c.2-612 "Installment K" Breach 1. to k (impos. CC occurred at start of k (mist. Price fluctuation and market collapse doesn't b. 2-703(c)--Seller can go to 2-704 to identify goods to k 4.) or subs. Comm. 5--if U bear the risk. What qualifies as failure of basic assumption (Comm. 2-703(e)--Recover for non-acceptance (2-708) or price (2-709) 6. then not excused c. impracticable due to failure of basic assumption of k a. including unfinished goods [2-704(1)(b)] 2. for delivering goods 1) Person who bears risk will bear extra cost if there exists comm. that is more expensive 2-615 General Changed Circumstances 1. FOP) 2-614 Method of delivering goods (means of perf. is comm.) is impracticable 1. Risk of loss hasn't passed to B b. Manner of delivery comm. 2-615(1) S excused if perf. 2-703(f)--Seller can cancel k (This means can recover damages 2-703(d-e) and recover in restitution) 7. Comm. 2-613(b)--partial loss then choice by B to void the k or take the part that is left 3. 2-702(3): Reclamation of goods excludes all other remedies 2. 2-612(3): Default of one or more installments substantially impairs value of whole. Comment 3: Reason for 2-702(3) is that seller is given preferential treatment 2-703 General Seller's remedies 1. reas. there is br/of the whole 2-613 Goods lost who bears the risk 1. Only applies if a. impracticable b. cumulative 2. Comment 1 says that seller doesn't have to elect remedies. : requires delivery of goods in separate lots 2. embargo. 2-613(a)--total loss then S can void the k 2. 4: remedies liberally applied w/limit from 1-106 2-704 Seller identifies goods and can complete goods 1. or unforeseen shutdown of major sources of supply does 2-702 Seller finds out buyer is insolvent 1. sub. reas.

Evidence shows seller had unlimited supply and not filling same demand (Resale buyer would have been solicited by P if no br/k. Seller not required to complete to mitigate damages (Luten) can just sell for scrap value [recover under 2-708(2)] 2-706 Seller's remedy to resale goods 1. Decision not to acquire was commercially reasonable 3. Jobber a. b. 2-706(1): Seller must act in good faith and in comm. Not accountable to buyer for any profit [2-706(6)] 8.. 2) Burden on buyer to show unreasonable (comment 2) b. must notify buyer [2-706(3)] Comment 4: Private sale is solicitation and negotiation and Public sale is an auction 4. Snyder case suggests can recover under 2-708(2) and get diff in k and improper resale 5. 2-709(1)(b)--Seller can only use 2-709 if can't sell at reasonable price (seller in business and can unload goods easier) or a. still get profit [2-708(1)] but not loss on sale (profit-true market value) b. Public sale. If at private sale. stuck w/goods 4. lost volume Profit+ID+reasonable costs incurred-salvage (resale) value 1. Goods accepted by buyer (2-606) 7 . reasonable manner 2. Complete if reasonable using commercial judgement 1) Measured at time seller learns of br. For lost profit from lost volume P must show (Snyder) a. terms must be commercially reasonable a. and would have had both profits w/o br. 2-706(4)(b): Seller must notify buyer of time and place of public sale (see comment 8) 6. (k price-market price at time of tender)+ID-ES 2. Seller can buy goods himself [2-706(4)(d)] 7. incomplete. Here. Market price harder to prove than resale price (2-706) 3. but would have anyway w/or w/o br.a. and P could perform the extra work)--Massengale 2. Incomplete goods a. Comment 4: Includes all standard priced goods to show profit 2-709 Seller's specific performance (Sue for Price) 1. solicitation would have been successful. Resold item after br. Profit+ID+reasonable costs-salvage value 4. If not. Not entitled to provision if puts one in better position then if k was performed (Nobs Chemical)--Jobbers who have locked in higher MV is at date of tender price then what MV price 2-708(2) Seller's damages if jobber. Seller never acquired goods b. otherwise if think prices going up use 2-708 2-708(1) Seller's damages for k-MV on Finished goods 1. Use 2-706 because want money in pocket. (k price-resell price)+ID-ES (ID in 2-710) 3. Conversely.

Must be within reasonable time (reasonable determined by facts known at time of br. 2-711(2)(b)--Demand SP for identified goods under 2-716 5. If good unique. must remit excess to seller under 2-706(6)] 2-712 Buyer's remedy to Cover 1. 2-711(1)(b)--Buyer may recover damages and not cover under 2-713 (analogous to 2-708 for seller) 4. 2-711(1)--Buyer may cancel and recover so much of the price as been paid (rest. go to 2-708) Comment 2: Generally limited to where sale of goods is impracticable 3. Risk of loss passes to buyer and goods lost or damaged 2. must use 2-713 5. If cover partially. Some cts (Oloffson) argue that buyer gets K-mar at time he learns of br. so buyer measures damages at TOP but has a duty to cover. 2-709(2)--Seller must keep goods for buyer unless 2-706 arises 2-710 Seller's ID 1. PV discounted over life of machine of increased output 2. 2-714(2)--(Value goods warranted-actual value of goods)+ID+CD a.b. (k price-cover price) +ID+CD(2-715)-ES [2-712(1)] 2.) 3. Calculate warranted goods by price of good on the market that would do what this good was warranted to do (Chatlos) b. Must notify seller upon learning of breach had 8 . If cover less than MP. Cover done in good faith (merchants must be honest in fact and observance of reasonable commercial standards ) 4. 2-714(3)--Get ID and CD under 2-715 3. (This is contradicted by comment 3 of 2-712 that says cover isn't mandatory) 2-714 Buyer's remedy if accepts the goods 1.. can't use 2-713 (Get more than expect. CL was got k-market at time of performance 3. Use this if too late to revoke acceptance 4. then can still use 2-713 (easier to prove) 7.) 2-713 Buyer's remedy if don't cover (repudiation/non-delivery) 1. Comment: to allow all commercially reasonable expenditures made by the seller 2-711 Buyer's General Remedies for rejection/non-performance 1. ( k price -MP at time of the breach)+ID+CD(2-715)-ES 2. If cover improperly.) AND 2. Reasonable price is any price at all (if denied price. part not covered use 2-713 (Interior Elevator) 6. If cover higher than MP. (Cargill) argue that UCC didn't explicitly overturn the CL. 2-711(1)(a)--Buyer may cover under 2-712 3. but other cts. 2-711(3)--W/rightful rejection or revocation if buyer has goods can get ID and sell under 2-706 [but if sells for more than ID+payments paid on price.

Won't enforce if overbroad (Kemble) 3. by rejecting any that requires a mathematical precision in proof c. 3 reqs. More liberal than CL but still requires under CL a. Ease of administration b. Can calculate CD using rel. 2-715(2)(b): Personal injuries need only proximate cause for breach NOT foreseeability 5. Won't enforce if it's a penalty [2-718(1)]--Only applies to large (comment 1: if too small look to unconscionable 2-302) a. to prove up CD so this substitutes (save money by not having to litigate) 2. OPC defined by CL and 1-106 unless otherwise stated [can't determine monetary price (Laclede Gas)] b. Rejects tacit agreement test (Had U thought of this br. in value of delivery (2-714) 2-716 Buyer wants Specific Performance 1. Damages need to be certain 1) Comment 4 liberalizes this req.2-715 Buyer's Consequential Damages (and incidental damages) 1. Must interpret in light anticipated or in light of actual harm 9 . 2-716(1)--Can only use if goods are unique or other proper circumstance (OPC) a. Can't recover twice for CD and diff. Buyer notifies seller of doing this of at time of doctrine 2-718 Liquidated Damages Clause 1. Comment 2 says OPC includes inability of cover Comment 2: Unique doesn't just include goods. Damages couldn't be reasonably prevented by cure or otherwise 2. Cts interpret this clause in two ways a. Not vague 2-717 Buyer may Deduct Damages from the Price 1. but look at total situation 2. Purpose: Diff. under 2-715(2)(a) to recover a. as a substitute for exp. would U consent to this risk) in comment 2 4. Damages must be foreseeable (Hadley)--seller would know contract b. 3.

If remedy fails of essential purpose (R and R) it is stricken a. B is a consumer w/commercial CD loss (can't include PI) b. then the sum that exceeds LD [2-718(2)(a)] The buyer's rt. 6. or PI) 6. Can only exclude CD if a. under 2-718(2) is subject to offset to seller's rt. Some cts. B is a merchant (for comm. separate clause barring CD will stand unless it is uncons. will enforce (Southwestern) LDC is a LR if expressly made exclusive Seller can't keep deposit if it's LDC if makes more money on resale Regardless of whether LDC is penalty. and fails of central purpose 4. Other cts. say that if LR fails so does CD because 2-719(2) says person has access to remedies in Act (include 2-715) 5. to damages besides LDC [2-718(3)] [2-719(2)] 2-719 Limitation of Remedies 1. strike LDC 1) Restatement says if no actual damages than any LDC is too large and should be stricken as a penalty b. seller entitled to $500 of amount buyer paid before breach or 20% of the value of the item whatever is less as restitution [2-718(2)(b)] or if LDC valid. 5. 2-719(2) also kicks in if deny other party substantial value of the bargain regardless if purpose fails (comment 1) a. and if either is a penalty. 2-719(3) says limit only if uncons. Also comment 1 says must be minimum adequate remedy 3. 7. Must determine how many times can turn in (Durfee) b. not only if uncons. argue that if central purpose fails. (measured only at time of K) a. Comment 2: LR's are cumulative and not exclusive unless expressly says so 10 .4. say even if overbroad in light anticipated or actual harm too small. Other cts. Lewis Refrigeration 2.

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