UCC Cases Flash Cards

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Milau Associates, Inc. v. North Avenue Development Corp Does Article 2 apply?
no, the service aspect of the transaction predominates the transaction. Here the plaintiffs made a contract for labor, not goods. The defendants only had a duty of care that a reasonably prudent and skilled qualified person would exercise under the same circumstances.
Analysts Intern Corp. v. Recycled Paper Products
Is computer program a good or service?
Good, when someone is hired to create a custom product, they are still creating a good to sell, not performing a service. the knowledge of the programmers is important, but only so far as it enables him to produce the software according to the contract
Anthony Pools v. Sheehan Does Article 2 apply? What is an alternative to the predominate test
Article 2 applies. Court used the Gravamen test gravamen test – allows court to escape the predominate purpose test. If the problem is with the stuff, art. 2 applies. If problem is with the labor, common law applies. Here the goods were defective
Siemen v. Alden Can the non-merchant seller of the saw be held liable under fit for a particular purpose warranty?
No, although it wasn't necessary for the seller to be a merchant, the buyer did not rely on seller's representation of the saw's fitness when he bought it.
Statute of Frauds
st1\:*{behavior:url(#ieooui) } St. Ansgar Mills, Inc. v. Streit
Was the TC granting of the motion for summary in favor of the buyer based on its findings of unreasonable notice confirming the price and sale of corn proper?
No, the jury determines whether or not seller gave notice confirming the contract in a reasonable time. The jury will evaluate the course of dealings between the parties.
Columbia Nitrogen Corp. v. Royster Should the TC have excluded evidence of use of trade under the parole evidence rule?
No, Evidence of the course of dealing and use of trade is admissible, unless the contract says that the course of dealing and use of trade should not be included in the K. This was not disclaimed in the K.
Battle of the Forms
Diamond Fruit v. Krack
- Krack's purchase order said one thing and Metal's acknowledgment included a disclaimer. Krack's manager asked Metal to change acknowledgment disclaimer. Was Metal’s disclaimer part of the K? Did Krack assent to Metal’s limitation liability term?
No, b/c Krack’s conduct did not indicate unequivocally that Krack intended to assent to Metal’s terms, that conduct did not amount to the assent contemplated by § 2-207(1) which does away with the last shot rule.
st1\:*{behavior:url(#ieooui) } Bayway Refining Co. v. OMT - seller's form included terms re: tax liability and it common in the trade for the buyer to pay the taxes. OMT refuses to pay. Issue: whether, under N.Y. U.C.C. § 2-207(2)(b) a contract term allocating liability to the buyer for an excise tax is an additional term presumed to have been accepted (as the seller contends) or (as the buyer contends) a material alteration presumed to have been rejected. TC granted Bayway's motion for summary judgment. Is this the correct result? st1\:*{behavior:url(#ieooui) }
yes, – The additional term is included in the K unless the term is a material alteration of the K. The party opposing inclusion of additional term bears burden of proving that term amounts to material alteration. A material alteration is one that would “result in surprise or hardship if incorporated without express awareness by the other party. OMT must show they were surprised by the addition, which they weren't because it was common in the trade as OMT was in the position to have the taxes waived if it registered.
Leonard Pevar Co. v. Evans - after a phone discussion which Pevar claims was an oral contract and what Evans claims not, Pevar sent order for ply wood, then Evans sent acknowledgment with disclaimer of most warranties and limiting liability to defective wood. Evans claims his form was a counter offer which Pevar accepted by accepting and receiving the wood. What happens if the jury determines there is no oral K?
conduct of the parties may recognize the existence of a contract, despite the previous failure to agree orally or in writing, here there is K, but the jury must determine whether or not an oral K existed. If it finds it didn't the provision of the K will be where the forms agree and the rest of the terms will be gap fillers.
Klocek v. Gateway K buys computer. The box includes terms and conditions that include an arbitration cl. and state “by keeping this computer more than 5 days, you accept the terms and conditions.” Is the arbitration cl. part of the agreement b/c K kept it more than 5 days?
No, Klocek is not a merchant --> additional terms are proposals for addition to the K that do not become part of the parties' K unless there is an express agreement. The act of keeping the computer 5 days was not sufficient to demonstrate that plaintiff expressly agreed to the Standard Terms
st1\:*{behavior:url(#ieooui) } Moore v. Pro Team Corvette Sales, Inc st1\:*{behavior:url(#ieooui) } Moore goes to OH to buy a car from a dealership. The K says “as is” and “all warranties pursuant to UCC 2-312. Was that an effective disclaimer?
no, Negative terminology wasn’t sufficient to disclaim the warranty of title
st1\:*{behavior:url(#ieooui) } Shaffer v. Victoria Station, Inc. Shaffer ordered a class of wine at the restaurant and the glass shatters in his hand. Can Shaffer sue for breach of the implied warranty of merchantability?
Yes, packaging is part of the good. the fact that the restaurant was not negligent is not a defense, b/c it isn’t an element of liability under the UCC implied warranty
Ferragamo v. MBTA- MBTA sells toxic car to Ferragamo and his brother dies. Breach of warranty of merchantability? Was MBTA a merchant of good of that type? Was "as is" disclaimer effective against brother?
The MBTA designed, modified and sells it cars. They are merchant. Even if the “as is” disclaimer was effective, it won’t prevent the brother, an employee of the buyer, who wasn’t a party of the K from bringing a claim. Lack of privity doesn't prevent brother from making a K claim. The MBTA is liable.
Back v. The Wikes Corp college students die after accident in motor home. Despite the lack of evidence of abusive use, the TC told the jury that that if a product were used in an “extraordinary or unusual manner” there would be no warranty liability for any injury resulting from such “unusual or abusive or different use.” Was this instruction proper?
No, such an instruction fails to inform the jury as to whether the defendant has warranted the goods to be free from the propensity that caused the plaintiff's injuries. Warranty liability is not absolute liability, and manufacturer of motor vehicle is not obliged to make product collision-proof, nor is motor vehicle manufacturer obliged to design against bizarre, unforeseeable accidents; however, manufacturer must anticipate environment in which its product will be used, and must design against reasonably foreseeable risks attending product's use in that setting. The question on remand for the jury was whether the motor home was “fit for the ordinary purposes for which such goods are used.”
Daniell v. Ford Motor Co. P sues Ford after being locked in her trunk for 9 days (a failed suicide attempt). Is Ford liable for implied warranties?
No, 2-314 use of trunk was extraordinary, 2-315 she didn’t search out the car for a particular purpose to be able to escape it. The ordinary purpose of the trunk was for carrying goods and she didn’t think about how to exit the trunk when she bought it.
Webster v. Blue Ship Tea Room, Inc. Webster got a fish bone stuck in her throat from eating fish chowder. Is the restaurant liable? What test did the court apply ?
The SJC applies a reasonable expectation test. She should have expected to encounter a fish bone when eating fish chowder. The SJC sides with D.
Warranty Disclaimers and Limitations
Bell Sports, Inc. v. Yarusso st1\:*{behavior:url(#ieooui) } Yarusso was wearing a Bell off-road motor cycle helmet when he got into an accident and fell on his head. He broke his neck and was paralyzed. His expert witness testified that the interior of the helmet wasn’t soft enough for off-roading and if it were, Yarusso would not have absorbed as much of the impact of the fall in his neck and would not be paralyzed. The helmet manual had a disclaimer of warranties and described how the helmet would protect the user’s head spreading the force of impact to the outer shell. Was expert testimony properly admitted? Was juries finding of breach of an express warranty proper?
TC did not abuse discretion in admitting expert and nor in submitting issues re: breach of warranty, and the jury’s verdict did not lack consistency. court’s reasons for the result/results – · 2-313 commentary says warranty provision is to be construed and applied liberally in favor of a buyer of goods. · Formal writing and specific intent by seller are not necessary to create a warranty. The language in the manual describing the purpose of the helmet and they way its design worked are express warranties. · Can’t disclaim item description: Their limited 5 year warranty did not disclaim other warranties b/c sellers can not reduce their obligation they created in their description of their product. · Express warranties can’t be disclaimed · negligence issues focus on the conduct of the manufacturer, while breach of warranties evaluate the products.
Disclaiming Implied Warranties
Cate v. Dover Corp. - st1\:*{behavior:url(#ieooui) } Cate bought lifts made by Dover for transmission repair shop. Despite Cate’s efforts to repair the lifts, they never worked properly. The disclaimer of implied warranties was in the same font, size, and color as the rest of the text, while their express warranty that the product is just as solid as others that offer a 5 year warranty is in bold. st1\:*{behavior:url(#ieooui) } Cate sues for breach of implied warranty of merchantability. Dover argues that claims of implied warranty are barred b/c of its disclaimer in its express warranty. The TC found in favor of Dover, where they correct?
no, st1\:*{behavior:url(#ieooui) }
  • implied warranties can only be changed by conspicuous lang. 2-316(2). An object standard is applied to determine what is conspicuous. Here, the disclaimer is hidden by attention grabbing language and disclaimers should not been hidden within guarantees
  • the object of the conspicuous lang. requirement is to protect buyers from surprise and unknowing waiver or their rights; therefore if the buyer has actual knowledge of the disclaimer conspicuous lang. is not material. Implied warranties may be excluded by course of dealings, course of performance, or usage of trade. The seller has the burden of proving that the buyer had actual knowledge. Dover was unable to present sufficient evidence of Cate’s knowledge to warrant a grant of its motion for summary judgment.
Bowdoin v. Showell Growers, Inc - Bowdoin (buyer) was pulled into sprayer (sold by Retailer Showell) and injured. P sue for breach of implied warranties of fitness and merchantability, D's defense is the disclaimer of warrant. The language of the disclaimer was conspicuous, but wasn't delivered until after sale.
Was the disclaimer effective?
  • post sale disclaimers are not effective b/c don’t form a part of the basis of the bargain between parties to the sale.
  • FMC’s argument that Showell should have known about the disclaimer b/c of manual received in prior equipment is not sufficient evidence of actual knowledge.
Rinaldi v. Iomega Corp - zip drives are defective and cause damage to files. Was the disclaimer effective given that it was located inside the packaging after the consumer purchase?
yes, it was more practical for the contract to be in the packaging.
Limitations on the Warranty
st1\:*{behavior:url(#ieooui) } Wilson Trading Corp. v. David Ferguson, Ltd - st1\:*{behavior:url(#ieooui) } Wilson got into a K with Ferguson for the sale of yarn. Disclaimer says you can’t make a claim for quality within 10 days or after weaving, knitting or processing. Wilson didn’t know that the yarn was defective until they made the yarn into sweaters and washed them and the color faded. Was the disclaimer of implied warranties effective?
no, 2-207 provides that buyer who accepts goods has a reasonable time after he discovers or should have discovered the breach to notify the seller of the breach, but the code also allows parties to limit remedies for breach. There must be remedies available for a breach even though the parties agree to modify those remedies. The contract can't modify or limit remedies in an unconscionable manner. 2-719. 2-719 provides that general remedy provisions of the code apply when circumstances cause an exclusive or limited remedy to fail of its essential purpose. Here, the provision of the K eliminates all remedy defects not discoverable before processing. The contract must give way to 2-207.
Pierce v. Catalina Yachts, Inc - st1\:*{behavior:url(#ieooui) } Catalina gave limited warranty for repairs of the below waterline blisters. The Pierces discover the blisters and give Catalina an est. of 10k to replace the gel coat. The seller just wanted to patch the blisters. Did the seller act in bad faith? Are the Pierces' entitled to consequential damages?
Yes. The court found that Catalina acted in bad faith by refusing to fix the problem. Catalina unilaterally drafted damages bar and breach deprived the Pierces of a substantial benefit of their bargain. Court takes an Independence approach. Pierces are entitled to consequential damages
Defenses in Warranty Actions
Fitl v. Strek - Fitl bought a baseball card from Strek at a card show. After he received the card, he put it in a lockbox for 2 years before having it appraised. It was determined at that time that card was had been altered and was worthless. Fitl brought a suit against Strek for breach of implied warranties, as he relied on Strek statement’s as a card dealer in the card’s authenticity. Did the buyer notify the seller of the breach in a reasonable amount of time?
-What is reasonable time for taking any action depends on the nature, purpose and circumstances of such action. -A party is justified in relying on a representation made to the party as a positive statement of fact when an investigation would be required to ascertain its falsity. 3 Reasons for reasonable notice to seller in order of importance: 1. provides the seller the opportunity to correct any defect 2. Allows seller to prepare for litigation 3. protects seller against stale claims after it is too late for seller to investigate (same policy as statutes of limitations) -Fitl would have had to conduct an investigation after his purchase to determine its authenticity, something he was not required to do. -Strek is unable to show that he could have fixed the problem if he knew of the alterations earlier
st1\:*{behavior:url(#ieooui) } Reed v. City of Chicago - st1\:*{behavior:url(#ieooui) } Ruby Reed sued the City of Chicago, officers, and the manufacturer of a paper gown after her son hung himself with a paper gown designed to prevent suicidal inmates from hanging themselves with their clothes. Can the P as a non-purchaser recover from the manufacturer under a claims for breach of warranty? Should Ds’ motion to dismiss be denied?
yes, Any warranty regarding the gown would have little effect if the warranty does not protect the suicidal detainee it was created for. (the opposing policy standard would be that 2-318 shouldn’t be extended and if the legislature wants to make a change they can) The safety of those people was part of the bargain
East River Steamship Corp. v. Transamerica Delavel, Inc - Steamship Corp.(buyer) sues Delavel (manufacturer) for breach of contract and warranties, and tortious conduct (strict and negligent) after 5 of its ships’ turbines break. P withdraws its contract claims due to the expiration of the claims under the statute of limitations. Can a purchaser sue under a tort for purely economic damages relating to the injury of the product itself?
  • majority rule: tort and warranty causes of action should be separated between monetary harm and personal and property injury.
  • Policy reason for adopting the majority rule:
    • gives parities the benefit of their bargains – allows parties to decide how to allocate their risks
    • limits manufactures liability leading to lower cost for purchasers of goods
      • warranty actions have built in limitations, but tort liability is unlimited
      • shortens privity
    • damages under contract law are more appropriate b/c would place buyer in the same position as if the product was not defective
Warranties and Article 2A
Colonial Pacific Leasing Corp. v. McNatt Datronic Rental Corp McNatt’s leased equipment from Colonial after they picked out the equipment from the manufacturer. McNatt’s allege that the representatives of the manufacturer made fraudulent statements and the Colonial wrongly released funds to the manufacturer. Should financial lessor be liable? Do the McNatt's need to continue paying the lessor?
(1) any fraud by supplier's employees could not be imputed to lessor or assignees; (2) thus, “hell or high water” clause requiring lessees to continue making payments to lessor regardless of condition of equipment and protecting assignees from defenses assertable against lessor was viable; (3) lessees' contractual agreement not to assert against assignees defenses against lessor estopped lessees from asserting failure of consideration as defense to counterclaim; (4) lessees' contractual waiver of warranty defeated claim of failure of consideration; and (5) question of fact precluded summary judgment on claim for negligent release of funds.
Landrum v. Devenport Landrum, through his son, contracted (maybe) to buy a car from Devenport, but left the price out. Landrum claims the price was the sticker price, Devenport argues that it was the fair market value. Landrum sues for breach of K, but buys the car for the fair market value anyway b/c he doesn’t want to lose the car. How will the price of the car be determined?
-the court could have determined that the parties agreed to the sticker price and the buyer would win - the court could have determined there was never a price in the K and the gap filler 2-305 would apply. Gap filler says reasonable price. 2-305. Reasonable price is often the market price and seller would win. - could find a lack of a meeting of the minds. §20 Restatement. The parties, when they said “price” meant different things. There would be no K.
Risk of Loss: No Breach A. Delivery Terms
Cook Specialty Co. v. Schrlock MSI contracted to sell P a brake machine. FOB MSI’s warehouse (shipment K). The carrier didn’t attach the brake correctly to the truck and it was lost. P asserts that the product was not duly delivered under §2-509 b/c MSI failed to ensure that the carrier had sufficient insurance coverage to compensate P for a loss in transit.Who wins?
MSI, Seller must see to any arrangements reasonable in the circumstances. The case that have found the seller acted unreasonably occurred after the buyer pays seller $50 for insurance and seller only bought $9. Here, the seller wasn’t acting unreasonably. Seller doesn’t have an obligation to investigate the amount and terms of insurance held by a carrier. P carried risk. The buyer knew that they had insurance title and they should have gotten their own insurance
Rheinberg-Kellerei GmbH v. Vineyard Wine Co. P sends wine to D w/o deciding on port of entry and without notifying the buyer. The ship is lost. Who assumed the risk?
P, seller, 2-509(1)(a) risk of loss in absence of breach – (1) Where the K requires or authorizes the seller to ship the goods by carrier (a) if it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even thought the shipment is under reservation.Before a seller will be deemed to have “duly delivered” the goods to the carrier he must fulfill certain duties to the buyer. Buyer must have reasonable opportunity to guard against risks by independent arrangements with carriers when they are assuming the responsibility of shipment.
Documents of Title Procter & Gamble Dist. Co. v. Lawrence American Field Warehouse Corp. warehouse lost vegetable oil after they had issued warehouse receipts. There are also monthly statements indicating the amount of oil stored. They then notified the owner that they lost the soybean oil. Owner proved negligence b/c there was proof that the oil was received and the warehouse had no idea what had happened to it. How should the damages be measured?
Damages = highest price between receipt and noticeThe court looks at the price of soybean oil between the time that goods were delivered and the time that owner was notified of the loss and damages are paid at the highest point. This encourages the warehouse to tell the owner that the goods are missing as soon as they realize the problem.
Dunfee v. Blue Rock Van & Storage, Inc Bailor sued bailee in negligence for loss of her goods by fire during civil disorders while goods were stored in defendant's warehouse. The K said that the insurance would be .60 per lb ($1,000) and if the owner wants more insurance they would have to buy more. The owner read and understood the terms b/c she bought extra insurance company. What's the result?
The warehouse pays $1,000 and the rest is paid by the insurance company
st1\:*{behavior:url(#ieooui) } Letters of Credit 1. The Issuer – Duties and Rights Voest-Alpine Trading Co. v. Bank of China p. 730 - Letter of credit beneficiary brought action against issuing bank alleging wrongful dishonor of letter of credit. Bank of China said that there were some discrepancies within the time period required to give notice. Was this a notice they were refusing to honor the letters of credit?
No, this was notice and if it were, the Bank was incorrect b/c the mistakes were negligible. Doesn’t have to be a mirror image, but if an expert would look at them and see that the documents clearly related to same transaction. discrepancy between listings of beneficiary's name on letter of credit and in documents presented to issuing bank did not warrant rejection of presentation documents by issuing bank. The misspelling of the destination is not a basis for dishonor of the letter of credit where the rest of the document has demonstrated linkage to the transaction on its face.
st1\:*{behavior:url(#ieooui) } Sztejn v. J. Henry Schroder Bank Corp. p. 741 – The buyer, Szteijn found out that the, Seller, Transea, was not sending the bristles they ordered, but trash that looked similar to the product. The buyer sued for declaratory judgment that the letter of credit null and void. The bank moves to dismiss buyer’s complaint. The bank claims that as long as the documents related to the transaction, they have to pay the seller. What is the result?
Efficiency is a policy concern. When there are other issues with the contract between the buyer and seller such as breach of warranty, the bank doesn’t want the responsibility of going beyond the documents to the goods. However, there is a different issue when the bank is notified of a fraud and the bank is acting as the seller’s agent. The bank doesn’t need to pay for documents it has reason to believe are fraudulent. - if the bank doesn’t know about the fraud then they are acting in good faith. 5-109(a)(2). “The issuer, acting in good faith may honor or dishonor the presentation in any other case.” Id. -If there was not fraud, the issuer must honor the letter of credit and the applicant must pay the issuer.
Intrinsic Values Corp. v. Superindencia De Administracion Tributaria p. 744 - Guatemalan tax administration agency obtained an injunction in Guatemala that prevented bank that issued irrevocable letters of credit at agency's request for benefit of provider of license plates under contract with agency from paying on them. Agency then brought current action to prevent confirming banks from honoring letters of credit and obtained a temporary injunction. Provider intervened after learning of the temporary injunction. The Circuit Court, denied provider's motion to dissolve the injunction. Provider appealed.What is the result?
(1) honoring a presentation of letters of credit by provider would facilitate a material fraud sufficient for the issuance of a temporary injunction, and (2) Guatemalan injunction was entitled to comity.
Performance of the Contract 1. Installment Sales st1\:*{behavior:url(#ieooui) } Woodworth v. The Richmond Indiana Venture Woodword signed executed note to pay RIV $655,625. There was a forfeiture provision in the note. The note was then assigned to Bank. W is in default of note. Is the note a promissory instrument?
No, In order to be negotiable, a promissory note must be a signed, unconditional promise to pay a sum certain in money which is payable on demand or a certain date. The note must be payable to order or bearer and contain no other promise, order, obligation, or power given by the maker except as authorized by Art. 3. This was not a negotiable instrument; therefore, the bank is not a holder in due course and may only rely on contract remedies
Sullivan v. United Dealers Corp. p. 371 – Sullivans execute a promissory not payable to Swift for constructing house. Swift sells the note to a finance company. The finance company sells the note to a bank. Sullivans make several payments on the note, then they stop b/c they say the work was defective. The bank sells the note back to the finance company. Is the finance company a holder in due course? Can the Sullivans assert their claim against the contractor as a defense against the finance company?
-Yes, b/c in order to prevent one from being a bona fide holder in due course, the holder must have notice of notice of a defense to payment at the time the instrument is negotiated. There are no facts indicating the finance company could have discovered any defect in the note when it was transferred. -No. Sullivans will have to pay the holder of the note, then sue the contractor separately.
Wilson v. Scampoli buyers purchase a color tv. The TV is delivered and it has a red tint. A repair person comes and there is still a red tint. The seller says they will have to bring it to the shop and repair it. The buyer wants recession of the contract b/c the set is defective. Can the buyer rescind the contract?
no, This was typical of color tvs at this time. The seller would have reasonable grounds to believe the set would be acceptable once they made the adjustment. Policy: parties to be in conversation with each other so the possibility of cure gets the parties talking. avoids litigation. Here, the buyer is not acting reasonably. They prevented the seller from curing the defect. The buyer must now allow the seller to try to fix the TV and if they can’t they will give the buyer a new set. The buyer can’t reject b/c they haven’t given the seller to ability to cure. - the court is following the perfect tender rule. The buyer may reject but the seller may cure if they can est. its under 2-508. Subsection 2 applies here b/c they had reasonable grounds to believe the buyer would allow them to adjust the set.
Ramirez v. Autosport p. 219 – Ramirez wants to buy a new camper. The sales person says it isn’t ready for pick up. 11 days later they come back, only some of the repairs have been made and the inside of the camper is soaked. The sellers transfer the title to the buyer without letting them know. They return 1 month later and the sales person asks them to wait and they did for 1.5 hours. They have a meeting 1 month later. They sell the trade in to a good faith buyer instead of the seller. The seller probably could have cured (defects were minor) but didn’t cure. Did the Ramirez revoke acceptance?
No, Revocation of acceptance must show non-conformity substantially impairs value, but the court doesn’t have to address that b/c the buyer never accepted the camper and if you don’t accept you don’t have to reject.
st1\:*{behavior:url(#ieooui) } Plateq Corp. of North Haven v. Machlett Laboratories, Inc. p. 227 – on 10/11, the buyer’s engineer says there are still a couple of things wrong with the tank. The seller says they can fix that. The buyer gives notice they need to ready by tomorrow. 2 days later buyer rejects. Is this article 2 K?
yes, includes custom made good that are moveable. They aren’t going to become part of real estate. Milau (Art. 2 didn’t apply b/c ultimate product was not moveable). Did the buyer accept the goods? Yes, the engineer, at the seller’s premises said the goods were acceptable. 2-606(1)(a) or (b). Under either analysis they’ve accepted. There is no proof that they tried to revoke acceptance. 2-608. Must prove non-conformity substantially impairs the goods. Remedy: seller recovers contract price b/c they aren’t going to be able find another buyer through reasonable efforts. The tubes were especially made for the buyer. The seller can recover the price of goods accepted and these goods were accepted by the buyer.
Waddell v. L.V.R.V. Inc. p. 232 – the buyer has the RV for 18month, 7 of which it was in the repair shop. Is this a substantial non-conforming? Was acceptance revoked in a reasonable amount of time?
yes, st1\:*{behavior:url(#ieooui) } The court decides to toll the time during which the RV was in the repair shop. Their patience shouldn’t work to their disadvantage. Must substantially impair standard to him or her. It is a mixed objective, subjective standard. They adopt the Oregon principle. They look at the needs and interests of the particular buyer then objectively ask if that was impaired to the buyer. The impairment was substantial and made within a proper amount of time. Ps win.
Cherwell-Ralli, Inc. v. Rytman Grain Co. - P sues D for non-payment. D counters that he received damages arising out of plaintiff's refusal to deliver remaining installments under the K. D was concerned about P continuing to deliver goods. The President of P said there wouldn't be a problem, so D wrote a check for his arrears. P's driver tells D after delivering the next shipment that that's the last one. D stops check. P stops delivering. D claims that P can't suspend its performance under the K. Is he right?
No, If there is a reasonable doubt about whether the buyer's default is substantial, the seller may be well advised to suspend further performance until it can ascertain whether the buyer is able to offer adequate assurance of future payments. If the buyer's conduct is egregious, the seller may cancel the remainder of the K. Buyer was not entitled to such assurances of future performance b/c the TC found as a matter of fact that he did not have reasonable grounds for insecurity. Buyer has always received what it ordered and the Pres of P assured him verbally of performance.

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