Chapter 22 part II - Summary Business Law: Text and Cases PDF

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Cristina Adum April 13, 2017 Chapter 22 Part 2: Performance and Breach of Sales 1. What must the nonbreaching party prove to recover consequential damages under the Code? Parties to a contract can limit or exclude consequential damages, provided the limitation is not unconscionable. When the buyer is a consumer, any imitation of consequential damages for personal injuries resulting from consumer goods is presumed to be unconscionable. The limitation of consequential damages is not necessarily unconscionable when the loss is commercial in nature. 2. Assume that two parties have a binding contract for the sale of a crane. Brandeis, the seller delivers a conforming crane. a. Assume for this part that Capitol, the buyer, wrongfully rejects, sending the crane back to Brandeis. Brandeis sues for breach of contract. What is the appropriate measure of compensatory damages in this case? (Hint--refer to 2-708.) In this case, the appropriate measure of compensatory damages is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages. b. Would the appropriate amount of compensatory damages be different if Capitol had simply kept the crane and not paid? Explain, and cite the appropriate code section that supports your answer. The seller has the right to recover the purchase price by bringing an action for the price, plus incidental damages, if the buyer accepts the goods but refuses to pay. 3. Assume that McDonald has contract to buy 500 pairs of shoes from Vetter. Vetter manufactures the shoes and delivers them to McDonald. McDonald accepts the shipment. Later, on inspection, McDonald discovers that 10 pairs of the shoes are poorly made and will have to be sold to the customers as "seconds." If McDonald decides to keep all 500 pairs of shoes, what remedies are available to her? If McDonald accepts the nonconforming goods to sell them to customers as “seconds”, she has the right to recover damages for the accepted poorly made products. The notice of the breach has to be in a reasonable time. Then, the measure of damages is the difference between the value of the goods as accepted and the value if they had been as promised....