I.

BUYER RECEIVES GOODS, NOW WHAT

a. 2-606- Accept Goods i. 2-608- Revoke Acceptance 2711 (Buyers Heaven) 1. non-conformity must substantially impair value a. substantially objectivity v. subjectivity? (Colonial Dodge) ii. 2-608- No Right to Revoke Acceptance 2714 iii. 2-714- Recover Damages for loss resulting from non-conformity iv. 2-607- acceptance of goods by buyer precludes rejection thereof b. 2-601- Reject Goods i. 2-601- perfect tender rule- buyer can reject goods if they fail in any respect to conform to contract (Class Struggle) (Colonial Dodge) ii. 2-602- Manner and Effect of Rightful Rejection 2711 iii. 2-508- Seller may cure within contract time or within reasonable time, to avoid breach c. 2-513- Right to Inspect before payment or acceptance

II.

BUYERS REMEDIES IF SELLER BREACHES

a. 2-716- Buyers Right to Specific Performance or Replevin (expectation) b. 2-718- Liquidation or Limitation of Damages; Deposits i. 2-718(1)- damages for breach by either party may be liquidated in the agreement but only if reasonable in light of anticipated or actual harm caused thereby. 1. A term fixing unreasonable large liquidated damages is void as a penalty. (Lake River) c. 2-715- Incidental and Consequential Damages i. incidental damages- post breach expenditures that would not have been made by pl had there been no breach; commercially rsnble. ii. consequential damages- any loss resulting from general or particular requirements and needs of which SELLER at time of contracting has reason to know, and which could not be prevented by cover or otherwise. 1. Tacit agrmnt rule rejected (Hadley) 2. Hand limitation not expressly embraced in UCC. d. 2-711Buyers remedies in generalBUYERS HEAVEN i. Ways to reach Heaven 1. Seller fails to make delivery 2. Seller repudiates 3. Buyer rightfully rejects (2-602) 4. Buyer justifiably revokes acceptance (2-608) ii. Buyers Rights 1. May cancel 2. regardless of cancellation, may recover payments made to date iii. Buyers Options (in addition to Buyers Rights) 1. Cover and have damages under 2-712 as to all goods affected regardless of whether they have been identified a. may recover [diff b/w cost of cover and k price] + inc + cons minus expenses saved in consequence of sellers breach ---OR--2. recover damages for non-delivery (2-713) a. may recover [diff b/w market price at time buyer learned of breach and k price] + inc + consq minus expenses saved in consequence of sellers breach b. market price determined as of place for tender or of arrival 1

iv. If Seller fails to deliver or repudiates, then Buyer may also 1. If goods have been identified, recover them as per 2-502 ---OR--2. obtain specific perf or replevin in proper case as per 2-716 a. 2-716(1)- spec perf available if goods are unique or in other proper circumstances. i. Inability to cover other proper circumstances spec perf (Copylease) b. 2-716(3)- buyer has right to replevin if he is unable to cover or circumstances indicate that such effort will be unavailing. replevin- force to sell to buyer v. On rightful rejection (2-602) or justifiable revocation of acceptance (2-608), buyer has security interest in goods in his possession/control for any payments made on their price. aggrieved seller status (2-706)

III. SELLERS
a. Remedies available if i. wrongful rejection ii. wrongful revocation of acceptance iii. failure to make payment due on or before delivery (2-709-1) iv. repudiation (same as non-accpetance) b. Goods concerned: Buyer errs WRT part or whole, then remedies available for i. Goods directly affected ii. Whole undelivered balance, if breach is of whole contract (applies to installment contracts as per 2-612) c. Remedies available to seller i. Cancellation ii. Withholding delivery iii. 2-704- Sellers right to identify goods and salvage unfinished goods 1. Identify conforming goods to contract if at time of breach, in sellers ctrl 2. unfinished goods may be resold as per 2-706 iv. Resale (2-706) 1. If seller cannot resell 2-709 (action for price) v. Price as due (if no resale possible) (2-709) vi. Repudiation or non-acceptance diff b/w market price and unpaid k price (2-708)

IV. SELLERS REMEDIES IF BUYER BREACHES

a. 2-708- Sellers Damages for Non-Acceptance or Repudiation DAMAGES = PROFITS (INCLUDING REASONABLE OVERHEAD)+ INCIDENTALS + COST RESALE IF P = K-C = R=C THEN X = R-C + I+C-R SO X = I (IF THIS IS TAKEN LITERALLY) i. 2-708(1)- [diff b/w market price at time/place for tender and unpaid k price] + inc minus expenses saves in consequence of buyers breach ii. 2-708(2)- if 2-708(1) insufficient to satisfy expectation interest, then measure of damages is profit seller would have made from full perf. + inc + costs reasonably incurred minus payments/proceeds of resale (LVS) (Neri) b. 2-709- Action for Price (no resale axn for price) 2

c.

d. e.

f. g.

i. 2-709(1)- when buyer fails to pay price as due, seller may recover inc + 1. price of goods accepted or of conforming goods lost (spoilage) AND 2. price of goods identified to contract if seller is unable to resell w/ reasonable effort at reasonable price ii. 2-709(2)- where seller sues for price, he must hold for buyer any identified goods under his control; if resale is possible, seller may so engage but the net proceeds thereof will be credited to buyer. 2-706- Resale i. good faith + commercially reasonable resale seller may recover [diff b/w resale price and contract price] + inc minus expenses saved due to buyers breach ii. if private resale, seller must give buyer notification of intention to resell iii. 2706(4)- public resale requirements iv. re-purchaser who buys in good faith does not have any rights of original buyer v. 2706(6)- seller not accountable to buyer for profit of resale. no consequential damage recovery 2-715- Incidental i. incidental damages- post breach expenditures that would not have been made by pl had there been no breach; commercially rsnble. 2-714- Buyers damages for Sellers breach in regard to accepted goods 2-718- Liquidation or Limitation of Damages; Deposits i. if buyer breaches, she is entitled to restitution less liquidated damages (if addressed in k) or 20%/$500 (whichever is smaller), less other damages seller can prove under Article 2, less any benefit buyer may have received from contract directly or indirectly. 1. However, if seller proves expectation damages, then 20%/$500 is not allowed for seller. ii. when a breachor defaults on property payments, he gets those payments back minus $500 or 20% whichever is smaller -2-718(2)(3) iii. rejection of Forfeiture Rule (De Leon)

V. WARRANTIES
i. Express 1. Creation (2-313) a. any affirmation of fact/promise made by seller to buyer which relates to goods + becomes basis of bargain express warranty that goods shall conform to affirmation or promise b. any sample or model which is made part of basis of bargain express warranty that whole of good shall conform to model/sample c. not necessary for seller to use formal words such as warrant or guarantee or that he have specific intention to make a warranty d. not created simply by affirmation of value of goods or by statement of sellers opinion or commendation of goods 2. Exclusion or Modification (2-316) a. Consistency- words/conduct relevant to creation and words/conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other b. Negation or modification is inoperative to the extent that such construction is unreasonable, subject to 2-202 3. Parol/extrinsic evidence (2-202)- terms set forth in writing intended by parties as final expression of their agreement may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement, but may be explained or supplemented by(2-202(a) and 2-202(b)) 3

ii. Implied 1. Creation (2-314) (2-315) a. Unless excluded/modified, implied warranty of merchantability for goods shall exist for their sale (2-314) i. Goods to be merchantable are(2-314(2)) b. unless excluded/modified, where seller at time of contracting has reason to know any particular purpose for which goods are required and that buyer is relying on sellers skill/jud22gment to select/furnish suitable goods implied warranty that goods shall be fit for such purpose (2-315) 2. Exclusion or Modification (2-316) a. Merchantability- to exclude/modify must mention the term and if written, must be conspicuous (2-316(2)) (1-201(10)) b. Fitness- to exclude/modify, must be by writing and be conspicuous; there are no warranties which extend beyond the description on the face hereof, is acceptable exclusion [2-316(2) 1-201(10)] c. All implied warranties are excluded by terms like as is, with all faults, and other such language. [2-316(3)] d. Course of dealing or course of trade sufficient to exclude/modify iii. Remedy Modification/Limitation [2-719] 1. can state a remedy, but if its exclusivity is not stated, then just one of many 2. if exclusive/limited remedy fails of its essential purpose remedy as per UCC 3. can exclude/limit consequential damages unless UNC. [2719(3)
VI.

STATUTE OF FRAUDS CONNECTIONS

a. 2-201(1)- Contract for sale of goods for price of $500 or more is NOT enforceable by way of action or defense unless there is some writing sufficient to indicate - that a contract for sale has been made between the parties AND - the document is signed by the party against whom enforcement is sought (or by authorized agent) b. 2-201(2)- written confirmation of contract must be objected to within 10 days of receipt of such confirmation, otherwise it satisfies 2-201(1) c. 2-201(3)- a contract which does not satisfy 2-201(1), but which is otherwise valid is enforceable IF - specially manufactured goods, and seller has made substantial beginning of their manufacture or commitments for their procurement OR - if party against whom enforcement is sought admits that contract for sale was made

VII.

Miscellaneous
a. 2-207- Additional Terms in Acceptance or Confirmation i. definite & seasonable expression of acceptance or written confirmation sent w/I reasonable time operates as an acceptance even though it states terms in addition to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. 1. Hill v. Gateway- software box indicated that there were additional terms inside, so purchasing the box is acceptance which is expressly made conditional on assent to the terms inside the box (however different from expectation). ii. Additional terms are to be construed as proposals for addition to contract; between merchants, such terms become part of the contract unless - offer expressly limits acceptance to the terms of offer - the additions materially alter the contract 4

- notification or objection to additions has already been given or is given w/I reasonable time after notice thereof