Chapter 29: Remedies for Breach of Sales Contracts

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• Chapter 29 Remedies for Breach of Sales Contracts

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Remedies for Breach

• The law provides a number of remedies for the
  breach of a sales contract.
• Remedies based on UCC theories are subject to a
  four-year statute of limitations.
• If the remedy sought is based on a non-UCC
  theory, a tort or contract statute of limitations
  established by state statute will apply.

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Remedies of the Seller

• Remedies of the seller may include
• (1) a lien on the goods until the seller is paid,
  
• (2) the right to resell the goods,
• (3) the right to cancel the sales contract, and
• (4) the right to bring an action for damages
  (including lost profits) or, in some cases, for
  the full purchase price.
• The seller may also recover reasonable incidental
  damages.
• In secured transactions, the buyer may have
  pledged some other property to the seller in case
  of default by the buyer.

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Remedies of the Seller
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Sellers Remedies Under Article 2
Misrepresentation of insolvency (3 mos/10 day
rules)
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Remedies of the Buyer

• Remedies of the buyer may include
• (1) rejection of nonconforming goods
• (2) revocation of acceptance
• (3) an action for damages for nondelivery -- both
  incidental and consequential damages
• (4) an action for breach of warranty
• (5) cancellation of the sales contract
• (6) the right to resell the goods
• (7) the right to bring an action for conversion,
  recovery of goods, or specific performance and
• (8) the right to sue for damages and cancel if
  the seller has been negligent or fraudulent.

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Remedies of the Buyer
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Buyers Remedies Under Article 2
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Limitations on Damages

• The parties may agree on remedies through a
  contractual provision for liquidated damages, for
  limitations on statutory remedies, or for waiver
  of defenses.
• When consumers are involved, this freedom of
  contract is to some extent limited for their
  protection.

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Remedies Under CISG

• Under the CISG, if the buyer fails to perform any
  obligation, the seller may require the buyer to
  pay the price, take delivery, and perform other
  obligations under the contract.
• Under the CISG, a buyer may reject goods only if
  there is a fundamental breach of contract.
• The buyer may reduce the price of nonconforming
  goods.