Lecture Dynamic business law - Chapter 23: Performance and obligations under sales and leases

After reading this chapter, you will be able to answer the following questions: What is the perfect tender rule? What is the difference between conforming and nonconforming goods? What is the right to cure? What is a revocation of the contract as compared to rejection of nonconforming goods? What is commercial impracticability?

Performance and  Obligations Under  Sales and Leases

The Basic UCC Performance Obligation

 Sellers and lessors are obligated to transfer and deliver 

conforming goods

 Buyers and lessees are obligated to accept and pay for 

conforming goods in accordance with terms of contract

 “Good faith” required in performance and enforcement of 

every contract

 Definition:  Honesty in fact

 In transaction between merchants, UCC also imposes 

obligation of reasonable commercial standards of fair dealing 

(“commercial reasonableness”)

“Perfect Tender” Rule

   States that if goods or tender of delivery fail in any respect to 

conform to contract, buyer/lessee has right to:

  1) accept the goods;

  2) reject entire shipment; or 

  3) accept part and reject part

of parties

Doctrine

Delay in delivery or non­delivery may not, in 

court’s discretion, constitute breach if  performance made impracticable because  contingency has occurred that was not  contemplated when parties reached agreement

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revoke acceptance

inspection