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Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 11
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
PAYMENT AND INSPECTION
Payment Term: When goods are sold on credit, the buyer
means specified by the parties, or by any reasonable means
if the parties do not specify a method of payment. If the
seller/lessor insists on cash when a buyer/lessee tenders a
check or credit card, the seller/lessor must give the
buyer/lessee reasonable time to obtain cash.
Unless otherwise agreed, inspection can take place at
any reasonable place and time and in any reasonable
manner, in light of the customs of the trade, past
practices of the parties, and the like.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 13
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACCEPTANCE
A buyer/lessee can accept the delivered goods by
(1) expressly accepting the shipment by words or by
conduct,
If some, but not all, of the goods delivered are
nonconforming, and the seller/lessor has failed to cure, the
buyer/lessee may make a partial acceptance, provided that
the buyer/lessee cannot accept less than a single commercial
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 14
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ANTICIPATORY REPUDIATION
(3) wait and see if the repudiating party retracts his
repudiation and performs as called for, or
(4) seek adequate assurances from the repudiating
promisor that he will, in fact, perform as and when
performance is due.
changes her position in reliance on the repudiation, the
repudiating promisor may retract his repudiation and
perform as and when promised.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 15
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE SELLER’S/LESSOR’S POSSESSION - PT. I
If the buyer/lessee breaches the contract before it has received
the goods, the seller/lessor may:
(1) cancel the contract, giving the buyer/lessee notice of
cancellation,
(2) withhold delivery,
(3) resell or otherwise dispose of the goods, in a
commercially reasonable, cease manufacturing the
goods and dispose of them for salvage value.
Notice: Unless the goods are perishable or threaten
to rapidly decline in value, the seller/lessor must
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 16
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE SELLER’S/LESSOR’S POSSESSION - PT. II
(4) if the seller/lessor is unable to dispose of the goods in a
commercially reasonable manner, sue to recover the
purchase price or payments due, plus incidental
(b) the seller’s/lessor’s lost profits, including a
reasonable allowance for overhead and other
expenses.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 17
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES:
GOODS IN TRANSIT
from delivering the goods to the buyer/lessee, or
(2) if the buyer/lessee has breached the contract but is
not insolvent, stop the carrier or bailee from delivering
the goods only if the quantity shipped is at least a
carload, truckload, planeload, or a larger shipment.
(b) the carrier or bailee acknowledges the buyer’s/
lessee’s right to possession; or
(c) in a sales transaction, the buyer possesses the
document of title.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 18
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE BUYER’S/LESSEE’S POSSESSION
When a buyer/lessee breaches a contract after receiving the
goods, the seller may:
(1) if the buyer/lessee refuses to pay, sue for the purchase
price or payments due, plus incidental damages; or
(b) at any time if the buyer misrepresented her
solvency in writing within 3 months prior to the
delivery of the goods.
If the seller elects to reclaim, she will be barred
from seeking any other remedy, such as incidental
damages.
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
PAYMENT AND INSPECTION
Payment Term: When goods are sold on credit, the buyer
means specified by the parties, or by any reasonable means
if the parties do not specify a method of payment. If the
seller/lessor insists on cash when a buyer/lessee tenders a
check or credit card, the seller/lessor must give the
buyer/lessee reasonable time to obtain cash.
Unless otherwise agreed, inspection can take place at
any reasonable place and time and in any reasonable
manner, in light of the customs of the trade, past
practices of the parties, and the like.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 13
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ACCEPTANCE
A buyer/lessee can accept the delivered goods by
(1) expressly accepting the shipment by words or by
conduct,
If some, but not all, of the goods delivered are
nonconforming, and the seller/lessor has failed to cure, the
buyer/lessee may make a partial acceptance, provided that
the buyer/lessee cannot accept less than a single commercial
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 14
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
ANTICIPATORY REPUDIATION
(3) wait and see if the repudiating party retracts his
repudiation and performs as called for, or
(4) seek adequate assurances from the repudiating
promisor that he will, in fact, perform as and when
performance is due.
changes her position in reliance on the repudiation, the
repudiating promisor may retract his repudiation and
perform as and when promised.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 15
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE SELLER’S/LESSOR’S POSSESSION - PT. I
If the buyer/lessee breaches the contract before it has received
the goods, the seller/lessor may:
(1) cancel the contract, giving the buyer/lessee notice of
cancellation,
(2) withhold delivery,
(3) resell or otherwise dispose of the goods, in a
commercially reasonable, cease manufacturing the
goods and dispose of them for salvage value.
Notice: Unless the goods are perishable or threaten
to rapidly decline in value, the seller/lessor must
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 16
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE SELLER’S/LESSOR’S POSSESSION - PT. II
(4) if the seller/lessor is unable to dispose of the goods in a
commercially reasonable manner, sue to recover the
purchase price or payments due, plus incidental
(b) the seller’s/lessor’s lost profits, including a
reasonable allowance for overhead and other
expenses.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 17
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES:
GOODS IN TRANSIT
from delivering the goods to the buyer/lessee, or
(2) if the buyer/lessee has breached the contract but is
not insolvent, stop the carrier or bailee from delivering
the goods only if the quantity shipped is at least a
carload, truckload, planeload, or a larger shipment.
(b) the carrier or bailee acknowledges the buyer’s/
lessee’s right to possession; or
(c) in a sales transaction, the buyer possesses the
document of title.
Ch. 17: Performance and Breach of Sales and Lease Contracts - No. 18
Clarkson et al.’s Business Law: Commercial Law for Accountants (1E)
SELLER’S/LESSOR’S REMEDIES: GOODS IN
THE BUYER’S/LESSEE’S POSSESSION
When a buyer/lessee breaches a contract after receiving the
goods, the seller may:
(1) if the buyer/lessee refuses to pay, sue for the purchase
price or payments due, plus incidental damages; or
(b) at any time if the buyer misrepresented her
solvency in writing within 3 months prior to the
delivery of the goods.
If the seller elects to reclaim, she will be barred
from seeking any other remedy, such as incidental
damages.
