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Ch 25 Sales Remedies 1 in a sales contract breach may consist of the seller s delivering defective goods too few 2 buyer may breach by not accepting conforming goods or by failing to pay for conforming goods goods the wrong goods or no goods that have been accepted 3 UCC provides distinct remedies each specifically keyed to the factual situation 4 purpose of Code is to put the aggrieved party in a position as good as the one he would have occupied had the other party fuly performed 5 damages do not have to be calculable w mathematical preciscion a need only be proved w whatever definiteness and accuracy the facts permit but no more b punitive damages generally are not available I REMEDIES OF THE SELLER 1 buyer s default may consist of any of the following a wrongfully rejected the goods b wrongfully revoking acceptance of the goods c d failing to make a payment due on or before delivery repudiating the contract in whole or in part 3 lessor may recover compensation for any loss of or damage to the lessor s residual interest in the goods caused by the lessee s default 4 if seller delivers goods on credit and buyer fails to pay price when due a seller s sole remedy unless buyer is insolvent is to sue for the unpaid price 5 if buyer receives goods on credit while insolvent a seller may be able to reclaim goods 6 Code defines insolvency to include both its equity meaning and its bankruptcy meaning a equity meaning the inability of a person to pay his debts in the ordinary course of business or as they become due b bankruptcy meaning total liabilities exceed the total value of all assets 7 Code s remedies are cumulative aggrieved party may perform more than one remedy 8 A through I are remedies of the seller A To Withhold Delivery of the Goods 1 seller may withhold delivery of goods to buyer who has wrongfully rejected or revoked acceptance of goods who has failed to make a payment due on or before delivery or who has repudiated the contract 2 installment contract any breach of an installment that impairs the value of the whole contract will permit seller to withhold the entire undelivered balance of the goods 3 upon discovery of buyer s insolvency seller may refuse to deliver goods except for cash including payment for all goods previously delivered under the contract B To Stop Delivery of Goods or in possession of a bailee 1 a seller who discovers that a buyer is insolvent may stop any delivery 2 if buyer is not insolvent but repudiates or otherwise breaches seller may stop carload truckload planeload or larger shipments 3 to stop delivery seller must notify carrier bailee soon enough to prevent delivery a after notification carrier bailee must hold and deliver goods according to directions of the b seller seller liable for any charges or damages incurred if negotiable document of title has been issued bailee need not obey a notification until the document is provided 4 seller s right to stop delivery ceases when the buyer receives the goods a b bailee of the goods except a carrier acknowledges to buyer that he holds them for buyer c carrier acknowledges to buyer that he holds them for buyer for reshipment or as warehouseman d a negotiable document of title covering the goods is negotiated to the buyer C To Identify Goods to the Contract 1 upon breach by buyer seller may identify conforming goods to the contract in her possession or control that were not so identified at the time she learned of the breach a enables seller to exercise remedy of resale of goods below 2 seller may resell any unfinished goods demonstrably intended to fulfill the particula contract a may either complete the manufacture of unfinished goods and identify them to contract b OR cease their manufacture and resell the unfinished goods for scrap or salvage value c seller must exercise reasonable commercial judgement to minimize her loss D To Resell the Goods and Recover Damages 1 seller has the remedy if buyer wrongfully rejects or revokes repudiates or fails to make timely payment 2 seller may resell the goods or the undelivered balance 3 if sale is made in good faith and commercially reasonable seller may recover from buyer diff b w contract price and resale price a plus incidental damages e g sales commissions minus expenses saved from breach 4 in choosing b w a public or private sale seller must observe relevant trade practices usages and take into account character of the goods a b if resale is private sale seller must give buyer reasonable notice of intention to sell if resale is public sale buyer must be given reasonable notice of time and place of resale i unless goods are perishable or will decline in value rapidly ii only identified goods may be resold in public sale unless market exists for future goods iii public sale must be made at usual place market for public sale if there is one iv prospective bidders should be given reasonable chance for inspection before sale c goods may be sold as a unit or in parcels 5 seller is not accountable to buyer for any profit made on any reasale of goods 6 bona fide purchaser at a resale takes the goods free of any rights of the original buyer even if the seller has failed to comply w one or more of the requirements of Code in making the resale 7 failure to act in good faith and in commercially reasonable manner deprives the seller of this remedy and relegates him to remedy of recovering damages for nonacceptance or repudiation E To Recover Damages for Nonacceptance or Repudiation 1 seller may recover damages from buyer equal to the difference b w the unpaid contract price and the market price at the time and place of tender of the goods a plus incidental damages less expenses saved b c of the buyer s breach 2 if diff b w contract price and the market price will not place the seller in as good a position as performace would have then the measure of damges is the lost profit a that is profit including reasonable overhead that the seller would have realized from full performance of buyer plus incidental damages less expenses saved by buyer s breach F To Recover the Price 1 Code permits seller to recover the price plus incidental damages in only three situations a where the buyer has accepted the goods b where conforming goods have been lost or damaged after ROL has passed to buyer c where goods have been identified to the contract and there is no ready market available for their resale at a reasonable price 2 seller who sues for the price must hold for buyer any


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FSU BUL 3350 - Sales Remedies

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