Business Law II BA 304-01: N/A
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Chapter 27 - Remedies for Breach of Sales Contracts - Review

<< Back to Chapter 27 - Remedies for Breach of Sales Contracts

1) An action for breach of warranty generally must be brought within four years of the breach.

2) When an express warranty is made regarding future performance, the time period of the statute of limitations for a suit by the buyer begins on the date when the future performance begins.

3) The statute of limitations for breach of a sales contract may be reduced by the buyer and the seller to one year.

4) Statute of limitations is a statute that limits the period of time within which an action can be brought.

5) When a plaintiff sues on the basis of strict tort liability, the action is subject to the general tort statute of limitations.

6) When an action is based on an express guarantee theory, the contract statute of limitations applies.

7) A breach is the failure to act or perform in a manner called for in the contract.

8) A seller's right to retain possession of goods until the seller has been paid is called a seller's lien.

9) A seller's lien on goods is lost when the seller gives the goods to a carrier for shipment to the buyer.

10) When a buyer has broken a sales contract, the seller may resell the goods or the balance of them in the seller's possession.

11) When a buyer wrongfully rejects goods, the seller may cancel the contract.

12) If a buyer wrongfully refuses to accept goods, the seller may sue the buyer for the purchase price.

13) If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.

14) If a seller elects to resell the goods remaining in the seller's possession after the buyer breaks the contract, the seller need not give notice to the original buyer if the goods are perishable.

15) A seller may cancel a sales contract if the buyer wrongfully rejects the goods, repudiates the contract, or fails to make a payment due on or before delivery.

16) The commercially reasonable charges incurred by a seller in caring for goods after the buyer's breach are recoverable by the seller in an action for damages as incidental damages.

17) A seller may not sue the buyer for the full purchase price if the goods are resold at one-third of the contract price.

18) Examplesof incidental damages recoverable by a seller include expenses for the care of the goods after the buyer's breach, expenses for transportation of the goods after the buyer's breach, and expenses for resale of the goods after the buyer's breach.

19) Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance.

20) To revoke acceptance of goods the nonconformity must substantially impair the value of the goods.

21) A revocation of acceptance is effective when the buyer notifies the seller.

22) When a buyer sues the seller for failing to deliver the goods, the buyer may recover the difference between the market price on the date that the buyer learned of the breach and the contract price.

23) If a buyer procures the same or similar goods as those involved in the sales contract breached by the seller, the buyer is said to have covered.

24) When a buyer has possession of goods after rightfully rejecting them, the buyer is treated the same as a seller in the possession of goods after the default of a buyer.

25) When a seller breaches a contract for the sale of goods to a buyer, the buyer is entitled to specific performance of the contract if the goods are unique.

26) A buyer is not barred from revoking acceptance of goods because the buyer has delayed until attempts of the seller to correct the defects proved unsuccessful.

27) The giving of notice to a seller within a reasonable time after a breach of warranty has been discovered by the buyer is a condition precedent to a suit by the buyer for breach of warranty.

28) A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.

29) A buyer may sue the seller for damages caused by the seller's fraud even if the buyer is barred by the UCC from suing for damages for breach of warranty.

30) A buyer who paid for goods and then rightfully revoked acceptance of the goods has a security interest in the goods that entitles the buyer to retain possession until the seller refunds what the buyer has paid.

31) If consumer goods are sold under a contract that excludes consequential damages, and the buyer is later physically injured because of a defect in the goods, the exclusion of consequential damages is prima facie unconscionable and is not binding.

32) A liquidation-of-damages clause is valid if it reasonably attempts to estimate the actual harm caused by a breach.

33) Consumer sales contracts providing that in the case of breach no damages may be recovered are prima facie unconscionable when personal injuries are sustained and prima facie not binding when personal injuries are sustained.

34) A buyer who willfully breaks a sales contract and then sues to recover the down payment given to the seller ordinarily may recover the amount in excess of 20 percent of the sales price or $500, whichever is less.

35) Under the CISG, a buyer to whom nonconforming goods are delivered may reduce the price without giving notice of nonconformity, if the buyer has a reasonable excuse for failure to give notice.

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