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Uniform Commercial Code
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=== Contract repudiation and breach === * Nonconforming goodsâIf non-conforming goods are sent with a note of [[Accommodation (law)|accommodation]], such tender is construed as a counteroffer, and if accepted, forms a new contract and binds the buyer at previous contract price. If the seller refuses to conform and the buyer does not accept, the buyer must return all non-conforming goods at sellers expense within 30 days of receipt. * Perfect tenderâThe buyer however does have a right of "perfect tender" and can accept all, reject all, or accept conforming goods and reject the rest; within a reasonable time after delivery but before acceptance, he must notify the seller of the rejection. If the buyer does not give a specific reason (defect), he cannot rely on the reason later, in legal proceedings (akin to the cure before cover rationale). Also, the contract is not breached per se if the seller delivered the non-conforming goods, however offensive, before the date of performance has hit. * "Reasonable time/good faith", four weeks' minimum lead time, standardâSuch standard is required from a party to a contract indefinite as to time, or made indefinite by waiver of original provisions. * Requirements/Output contractsâThe UCC provides protection against disproportionate demands, but must meet the "good faith" requirement. * Reasonable grounds for insecurityâIn a situation with a threat of non-performance, the other part may suspend its own performance and demand assurances in writing. If assurance is not provided "within a reasonable time not exceeding 30 days", the contract is repudiated.<ref>{{UCC|2|609}}</ref> * Battle of formsâNew terms will be incorporated into the agreement unless: ** the offer is limited to its own terms, ** they materially alter the original terms (limit liability etc.), ** the first party objects to new terms in a timely manner, or the first party has already objected to new terms. Whether the new terms "materially alter" the original offer may depend on the nature of the item (e.g. a delay in delivery of nails is not the same as for fish). * Battle of formsâA written confirmation of an offer sent within a reasonable time operates as an acceptance even though it states terms that are additional to or different from those offered, unless acceptance is expressly made conditional to the additions. * Statute of frauds as applicable to the sale of goodsâThe actual contract does not need to be in writing. Just some note or memo must be in writing and signed. However, the UCC exception to the signature requirement is where written confirmation is received and not objected to within 10 days.<ref>{{UCC|2|201}}</ref> * Cure/coverâThe buyer must give the seller time to cure the defective shipment before seeking cover. * [[FOB (shipping)#North America|FOB]] place of businessâThe seller assumes risk of loss until the goods are placed on a carrier. FOB destination: the seller assumes risk of loss until the shipment arrives at its destination. If the contract leaves out the delivery place, it is the seller's place of business. * Risk of lossâEquitable conversion does not apply. In the sale of specific goods, the risk of loss lies with the seller until tender. Generally, the seller bears risk of loss until the buyer takes physical possession of the goods (the opposite of realty). * ReclamationâSuccessful reclamation of goods excludes all other remedies with respect to the goods.<ref name="UCC|2|702">{{UCC|2|702}}</ref> The seller can reclaim goods upon demand within 20 days after the buyer receives them if the seller discovers that the buyer received the goods while insolvent. * Rightfully rejected goodsâA merchant buyer may follow reasonable instructions of the seller to reject the goods. If no such instructions are given, the buyer may<!-- must/shall? This word was missing --> make a reasonable effort to sell them, and the buyer/bailee is entitled to 10% of the gross proceeds. * Implied warranty of fitnessâImplied warranty of fitness arises when the seller knows the buyer is relying upon the seller's expertise in choosing goods. Implied warranty of merchantability: every sale of goods fit for ordinary purposes. Express warranties: arise from any statement of fact of promise. * UCC damages for repudiating/breaching sellerâDifference between 1) the market price when the buyer learned of breach and the 2) contract price 3) plus incidental damages. An aggrieved seller simply suing for the contract price is economically inefficient.<ref>{{UCC|2|713}}</ref> * Specially manufactured goodsâSpecially manufactured goods are exempt from statute of frauds where manufacturer has made a "substantial beginning" or "commitments for the procurement" of supplies.
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