If goods or their delivery fail to conform to the contract in any way, the buyer generally may:
A unit by which the commercial usage treats as a single whole which, if divided, materially diminishes its value.
I can't take two eggs out of the carton and return ten.
Remember that UCC acceptance is more than just taking delivery—there's a right to inspect for conformance. Right is cut off by:
Rejections will not be evidence of a seller's breach if:
Limited right to revoke. Defect of goods that substantially diminishes value and:
Don't follow Perfect Tender Rule. Similar to substantial performance at common law.
Installment can only be rejected if nonconformance substantially impairs value of that installment and cannot be cured.
Considered a breach of contract only if the nonconformance substantially impairs value of the entire contract.
If a buyer rejects and the time of performance is not yet due, the seller can give reasonable notice of intent to cure and make a new tender of conforming goods.
Generally no right. Allowed additional time when:
barbri examples make these clear
Generally allow for defects to be cured.
Seller can treat any of these as material breach
To put the non-breaching party in the position they would have been had there been no breach.
A plaintiff must show that: the breach caused the damages, the damages were foreseeable at the time of contract, that the damages are certain, and that they were unavoidable. (CFCU)
Damages that put plaintiff in the place they would have been had the other party performed.
Damages that put plaintiff in the place they would have been had contract never been formed.
Usually when:
Damages reasonably foreseeable at the time of contract that reflect losses over and above expectation damages (typically lost profits). Plaintiff must show that breaching party knew or had reason to know of special circumstances.
"arising naturally … from such breach of contract itself" Hadley v. Baxendale 558 6th Edition
What are some possible reasons for this rule on Consequential Damages?
The notes after Hadley v. Baxendale are an excellent condemnation of capitalism, even if that's not what the editor intended.
Reasonable expenses associated with goods rejected under the Perfect Tender Rule (e.g. storage, return shipping, reselling, etc.)
Damages must be certain and ascertainable, not speculative.
Generally not awarded. Where these has been tortious conduct by the other party (e.g. fraud, intentional or negligent misrepresentation, etc.) in conjunction with the contract, a party may sue in tort under those theories.
Breach, but no proven loss. Typically $1.00
Expressly defined in the contract. The requirements for enforcement: the damages must have been difficult to estimate or ascertain at the time of formation; must have been a reasonable forecast of damages; must not function as a penalty.
The reasonable test will compare actual damages of the breach at the time of formation to forecasted amount. Under the UCC can be compared to breach at the time of breach.
Questions, then Cases.
Hawkins v. McGee
Restatement 2d § 344 (p 22 in 6th Ed.)
Hadley v. Baxendale
Mader v. Stephenson
Rockingham County v. Luten Bridge Co.
Kvassay v. Murray