Chapter 28 Remedies for Breach of Sales Contracts Twomey, Business Law and the Regulatory Environment (14th Ed.)

Sellers’ Remedies under Article 2 [28-1] Chapter 29 *Misrepresentation of insolvency (3 mos/10 day rules) (c) 2000 West Legal Studies Chapter 28 1

Remedies of the Seller [28-2] Chapter 29 Remedy/Reaction of Seller Breach/Action of Buyer Buyer has not paid for goods Seller’s Lien Buyer wrongfully rejects goods, wrongfully revokes acceptance, Or repudiates contract Resale by Seller Buyer wrongfully rejects goods, wrongfully revokes acceptance,or repudiates contract. Buyer wrongfully rejects goods or repudiates contract. Cancellation by Seller Seller’s Action for Damages Buyer accepts goods and does not rightfully revoke acceptance; additionally, conforming goods damaged or destroyed after risk of loss passed to buyer; or after buyer’s breach, goods not resellable Seller’s Action for the Purchase Price. (Usual Remedy) Buyer fails to pay amount owed under secured transaction. Seller Takes Possession of Goods . (c) 2000 West Legal Studies Chapter 28 2

Buyer’s Remedies under Article 2 [28-3] Chapter 29 Buyer’s Remedies under Article 2 [28-3] (c) 2000 West Legal Studies Chapter 28 3

Remedies of the Buyer [28-4] Chapter 29 Remedies of the Buyer [28-4] (c) 2000 West Legal Studies Chapter 28 4

Chapter 28 Summary 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. (c) 2000 West Legal Studies Chapter 28

Chapter 28 Summary [2] 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 or, in some cases, for the purchase price. The seller may also have remedies because of secured transactions. (c) 2000 West Legal Studies Chapter 28

Chapter 28 Summary [3] Remedies of the buyer may include (1) rejection of nonconforming goods; (2) revocation of acceptance; (3) an action for damages for nondelivery of conforming goods; (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 made a material breach of the contract. (c) 2000 West Legal Studies Chapter 28

Chapter 28 Summary [4] The parties may modify their remedies by 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. (c) 2000 West Legal Studies Chapter 28

Chapter 28 Summary [5] Under the CISG, the seller may require the buyer to pay the price, take delivery, and perform obligations under the contract, or the seller may avoid the contract if there is a fundamental breach. Under the CISG, a buyer may reject goods only if there is a fundamental breach of contract. The buyer may also reduce the price of nonconforming goods. (c) 2000 West Legal Studies Chapter 28