Quiz 26: Obligations and Performance

Business

a) True. The UCC require all parties in a sales contract to act in good faith. b) False. Merchants and non-merchants are not treated similarly in the sales article. For example, for delivery of goods merchants must have delivered to buyer, whereas non-merchants just need to tender delivery. c) False. The UCC cover sales of goods, doesn't matter the price. d) False. For example, UCC allows warranties to be disclaimed.

Refer to the case Smith v Penbridge Associates (655 A2d 1015). Case Issue The issue is whether plaintiff (buyer ) had made a rejection in reasonable time of nonconforming goods provided by defendant (seller). The buyer was supposed to receive breeding pair (male and female) emus but received two male emus instead. Trial court held for buyer. Seller appealed the decision. Relevant Terms, Laws, and Cases UCC 2-601 2-602 - 2-601 States that buyer has the right to reject nonconforming goods, however, they must do so within reasonable time after delivery of goods (2-602) Opinion State Superior court affirmed the decision. The buyers are owed damages from seller. The seller argued that the buyers should have made an inspection earlier, but the court disagreed. Court argued that the emus' sex was not easily observable and requires a method known as "sex venting" which is dangerous to the buyers to do so. When the buyers had inspected the emus' sex they found it was nonconforming and informed the sellers immediately. Hence, the court believed the buyers inspected the product in a reasonable time. Furthermore, the court noted that seller had an express warranty which states the emus were proven breeder pair. Hence, the seller can't blame buyer for not making inspections earlier.

a) False. Collect on delivery (COD) requires that buyer pay on delivery of goods. They may still reject or revoke acceptance of the goods after payment. b) False. COD requires that buyer pay on delivery of goods. c) True. They may reject nonconforming goods. d) False. COD requires that buyer pay on delivery of goods.

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