Law of Perfect Tender vs. Modern UCC Cure Provisions
The contrast between the old law of perfect tender and the modern UCC cure provisions in commercial contracts. Exploring buyer rights, seller obligations, and the concept of cure in non-conforming tender scenarios. Case studies and legal implications are analyzed to highlight the impact on contract enforcement.
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Presentation Transcript
Cure Richard Warner
Old Law of Perfect Tender The old rule was "perfect tender = unless the goods delivered were exactly as ordered and delivered exactly when specified, the buyer could rescind the contract. Material breach was not required. This made it too easy for buyers to get out of a losing contract. Suppose I deliver the hula hoops late; my late delivery causes $20 in damages. So that is what you get if you sue for damages But the market has fallen, and you can now buy the hoops for way below the contract price. So you rescind, saving yourself a lost of money.
Modern Law: UCC Cure Provisions One thing is the same: There is no UCC requirement of a material breach. The concept Is not part of the UCC. The difference: When there is a non- conforming tender of goods, the buyer may not have an immediate right of recission because the seller may have a right to cure.
2-508. Cure by Seller of Improper Tender or Delivery; Replacement (1) Where any tender or delivery by the seller is rejected because non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery. (2) Where the buyer rejects a non-conforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conforming tender.
UCC 2-508 Buyer rightfully rejects goods Seller had reasonable grounds to believe delivery acceptable with or without money allowance Time for performance has not yet expired 2-508(1) Seller seasonably notifies buyer of intention to cure 2-508(2) Right to make a conforming delivery within the contract time Right to make delivery in a further reasonable time
Fred, Jones, and the Hula-Hoops, 1 Fred and Jones have a contract under which Jones is to sell 100 Super-Duper Pro Model hula hoops to Fred, delivery to be on June 13. Jones delivers on June 10 the Super Pro Model, and Fred refuses delivery. Jones immediately notifies Fred of his intention to cure. Does Fred have a right to rescind under 2-508(1)? (a) Yes (b) No
Fred, Jones, and the Hula-Hoops, 2 Fred and Jones have a contract under which Jones is to sell 100 Super-Duper Pro Model hula hoops to Fred, delivery to be on June 13. On June 13, Jones delivers 100 Super Pro models telling Fred he can have them for half of the contract price. Fred rejects the goods. Jones immediately notifies Fred of his intention to cure. Assume that the same sequence of events had happened frequently in the past and that Fred had always accepted the Super Pro model at half the price. Does Fred have a right to rescind under 2-508(2)? (a) Yes (b) No
Fred, Jones, and the Hula-Hoops, 3 Fred and Jones have a contract under which Jones is to sell 100 Super-Duper Pro Model hula hoops to Fred, delivery to be on June 13. On June 10, Jones delivers the Super Pro Model, and Fred refuses delivery. Jones immediately notifies Fred of his intention to cure. On June 15 he delivers 100 Super Pro models telling Fred he can have them for half of the contract price. Fred rejects the goods. Jones immediately notifies Fred of his intention to cure. Assume that the same sequence of events had happened frequently in the past and that Fred had always accepted the Super Pro model at half the price. Does Fred have a right to rescind under 2-508(2)? (a) Yes (b) No
