Business Law Chapter 24

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Business Law Chapter 24

This Is Remedies. This Is Breach. 

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Obligations of sellers/lessors and buyers/lessees are determined by what three things
1. terms the parties agree on2. custom3. rules of UCC
statute of limitation=4 years
Goal of contract remedies
to fulfill expectations and intentions of parties to agreement, give them the benefit of the bargain negotiated
Remedies available to sellers and lessors under UCC
1. Cancel the Contract (must notify buyer/lessee)2. Withhold Delivery 3. Sell or otherwise dispose of goods (allows seller to recover difference between resale price and contract price, plus incidental damages minus expenses saved)4. Sue to get the "benefit of the bargain" (recover purchase price, lease payments due, or some other measure of damages that gives seller/lessor "benefit of bargain")5. Liquidated Damages6. Stop Delivery7. Reclaim the Goods
Liquidated Damages
damages identified before the breach occurs
Parties are free to negotiate a liquidated damages clause, but it cannot be punitive and must be reasonable
If not negotiated, UCC allows non-breaching seller to claim against breaching buyer twenty percent of purchase price of $500, whichever is less. 
Remedies available to Buyers and Lessees under the UCC
1. Cancel Contract2. Obtain Cover (subsititute goods for those due under the sales or lease agreement)3. Sue to recover damages (entitled to incidental and consequential damages)4. Recover Goods (if seller is insolvent within 10 days after receiving first payment due under the agreement)5. Obtain specific Performance (when: 1. goods are unique, 2. remedy at law is inadequate)6. Reject Nonconforming Goods7. Revoke Acceptance of nonconforming goods8. Accept nonconforming goods and recover damages (must give reasonable notice of defect)
Elements necessary to obtain legal cover
Buyer must:1. Demonstrate good faith in obtaining the substitute goods2. Pay a reasonable amount for the substitute goods3. Act without unreasonable delay in purchasing the substitute goods4. purchase goods that are reasonable substitutes
Modification of/Limitation to Remedies Otherwise Provided by UCC
Parties to sales and lease contracts are allowed to modify/limit remedies
Courts uphold modifications/limitations to remedies, unless remedies fail in their essential purpose.