Chapter Summary

Performance by the Seller

Tender of Deliverythe seller makes available to the buyer goods conforming to the contract and so notifies the buyer

• Buyeris obligated to accept conforming goods
• Selleris entitled to receive payment of the contract price

Time and Manner of Tendertender must be made at a reasonable time and kept open for a reasonable period of time

Place of Tenderif none is specified, place for delivery is the seller's place of business or, if he has no such place, his residence

• Shipment Contractsseller is required to tender delivery of the goods to a carrier for delivery to buyer; shipment terms include the following:F.O.B. (free on board)place of shipment,F.A.S. (free alongside ship)port of shipment,C.I.F. (cost, insurance, and freight),C.&F. (cost and freight)
• Destination Contractsseller is required to tender delivery of the goods at a named destination; destination terms include the following:F.O.B. place of destination,ex-ship, andno arrival, no sale
• Goods Held by Baileeseller must either tender to the buyer a document of title or obtain an acknowledgment from the bailee

Perfect Tender Rulethe seller's tender of performance must conform exactly to the contract, subject to the following qualifications:

• Agreement by the Partiesthe parties may contractually limit the operation of the perfect tender rule
• Cure by the Sellerwhen the time for performance under the contract has not expired or when the seller has shipped nonconforming goods in the belief that the nonconforming tender would be acceptable, a seller may cure or correct her nonconforming tender
• Installment Contractswhen the contract calls for the goods to be delivered in separate lots, the buyer may reject a nonconforming installment if it substantially impairs the value of that installment and cannot be cured, but if nonconformity or default of one or more of the installments substantially impairs the value of the whole contract, the buyer can treat the breach as a breach of the whole contract

Performance by the Buyer

Inspectionunless otherwise agreed, the buyer has a reasonable time in which to inspect the goods before payment or acceptance to determine whether they conform

Rejectionbuyer's manifestation of unwillingness to become the owner of the goods; must be made within a reasonable time after the goods have been tendered or delivered and gives the buyer the right to (1) reject all of the goods, (2) accept all of the goods, or (3) accept any commercial unit(s) and reject the rest

Acceptancebuyer's express or implied manifestation of willingness to become the owner of the goods

Revocation of Acceptancerescission of buyer's acceptance of the goods if nonconformity of the goods substantially impairs their value, provided that the acceptance was (1) premised on the assumption that the nonconformity would be cured by the seller and it was not or (2) the nonconformity was an undiscovered hidden defect

Obligation of Paymentin the absence of an agreement, payment is due at the time and place the buyer is to receive the goods

Obligations of Both Parties

Casualty to Identified Goodsif the contract is for goods that were identified when the contract was made and those goods are totally lost or damaged without fault of either party and before the risk of loss has passed to the buyer, the contract is avoided

Nonhappening of Presupposed Conditionthe seller is excused from the duty of performance on the nonoccurrence of presupposed conditions that were a basic assumption of the contract, unless the seller has expressly assumed the risk

Substituted Performancewhere neither party is at fault and the agreed manner of goods becomes commercially impracticable, a substituted manner of performance must be tendered and accepted

Right to Adequate Assurance of Performancewhen reasonable grounds for insecurity arise regarding either party's performance, the other party may demand written assurance and suspend his own performance until he receives that assurance

Right to Cooperationwhere one party's required cooperation is untimely, the other party is excused from any resulting delay in her own performance

Anticipatory Repudiationif either party clearly indicates an unwillingness or inability to perform before the performance is due, the other party may await performance for a reasonable time or resort to any remedy for breach

Questions:

Answer the following questions below by referring to the Chapter Summary above. All answers must be written in your own words and AI Generated answers are not allowed.

1) AJM Manufacturing is a company located in Billings, Montana. It contracted to make 10,000 bottle openers for Tree House Enterprises, a business in Gary, Indiana.

• Give a definition of Shipment Contracts and explain in detail, then give an example of Shipment Contract language using the facts above.
• Give a definition of Destination Contracts and explain in detail, then give an example of Destination Contract language using the facts above.

Explain in detail for each of the questions and analyze the applicable law.

2) MaryJo agreed to sell Bruce a new machine that makes Magic 8-Balls. As part of their contract, Bruce agreed to pay MaryJo $400,000 and MaryJo agreed to manufacture, sell, deliver, and install the machine. On the day MaryJo delivered, set up, and put the machine in running order, Bruce discovered that approximately once every 3 hours, the machine would make a defective Magic 8-Ball. Based on this, Bruce immediately called MaryJo and notified her that he determined that rejected the machine. MaryJo promised that she would send a technician over the next day to fix the machine. MaryJo never sent a technician to fix the machine. Bruce continued to use the machine for six months, but he called MaryJo at least once a week to complain. For the first couple of months, MaryJo continued to promise she would fix the machine, but then eventually stopped returning Bruce's calls. Six months after the initial delivery date, Bruce sent MaryJo a letter demanding his money back and telling MaryJo to come and get the machine.

Has Bruce lost his right:

• to reject the machine?
• to revoke acceptance of the machine?

Explain in detail to answer the questions and analyze the applicable law.