At common law the contract is interpreted strictly. This means that any deviation, no matter how minor, is a material breach, entailing the right to damages and relieving the non-breaching party of their duty to perform. Deviations from the harsh common law rule could only be attained through resort to the courts of equity: equity is an exceptional discretionary remedy offered by the court in the interest of justice as a corrective of the harsh and unforeseen operation of law. There is no "right" to equity. If the legal remedy is adequate the equitable remedy will not obtain.
The uniform commercial code, probably influenced by Interessenjurisprudenz, sought to codify the common law of the various states and to soften the harsh common law rule. The UCC applies to contracts for the sale of goods and includes particular rules for contracts between merchants.
The core rule complexes to understand in UCC sales of goods cases are 1) non-conforming goods 2) opportunity to cure 3) installment sales contracts
Non-conforming goods are goods which do not meet a quantity or quality term specified in the contract. In principle, the seller should be given a reasonable chance to cure the defective delivery. However, no chance to cure is offered where the breach is "material". Late delivery is presumed to be a material breach, unless the customof the parties in practice had been to allow late delivery. The issue is whether the breach is "material" or "non-material", which will depend on the facts of the case. At common law, unlike the UCC, all breaches are material! The issue whether a breach is "immaterial" and liable to cure or "material" and thus "incurable" only arises under the UCC in a sale of goods between merchants. Services contracts are governed by common law, not UCC. In a case of a mixed sale of goods plus installation services the UCC governs only if the predominant element of the contract is a sale of goods, otherwise the common law applies.
The canonical UCC case will test § 2-612. "Installment contract" because installment contracts raise all these issues. § 2-612 provides
(1) An "installment contract" is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contractcontains a clause "each delivery is a separate contract" or its equivalent.
(2) The buyer may reject any installment which is non-conforming if the non-conformity substantially impairs the value of that installment and cannot be cured or if the non-conformity is a defect in the required documents; but if the non-conformity does not fall within subsection (3) and the seller gives adequate assurance of its cure the buyer must accept that installment.
(3) Whenever non-conformity or default with respect to one or more installments substantially impairs the value of the whole contract there is a breach of the whole. But the aggrieved party reinstates the contract if he accepts a non-conforming installment without seasonably notifying of cancellation or if he brings an action with respect only to past installments or demands performance as to future installments.
The first issue is the installment contract is ONE contract with multiple deliveries -- not a series of contracts. This was a recurring question at common law, where multiple deliveries often raised the question whether there was only one contract or several. Because of the material breach rule at common law such installment contracts would sometimes be interpreted as multiple contracts. (1) thus simplifies this issue.
(2) provides that the buyer may reject a non-conforming delivery without breaching the contract or ending the contractual relationship, unlike common law where all breach is material and end the contract. Buyer may only reject an incurable non-conforming installment.
(3) provides that the non-conforming delivery can be a breach of the entire contract; however, if the buyer accepts a non-conforming delivery without notice of cancellation or does not sue for material breach of the entire contract but only for partial breach.
Suppose a seller has delivered non-conforming goods. What are the buyers options?
1) accept some or all of the goods and sue for damages
2) accept none of the goods and sue for damages
3) accept all of the goods and sue for damages
however, the seller must first be given a reasonable chance to cure the non-conforming delivery.
The uniform commercial code, probably influenced by Interessenjurisprudenz, sought to codify the common law of the various states and to soften the harsh common law rule. The UCC applies to contracts for the sale of goods and includes particular rules for contracts between merchants.
The core rule complexes to understand in UCC sales of goods cases are 1) non-conforming goods 2) opportunity to cure 3) installment sales contracts
Non-conforming goods are goods which do not meet a quantity or quality term specified in the contract. In principle, the seller should be given a reasonable chance to cure the defective delivery. However, no chance to cure is offered where the breach is "material". Late delivery is presumed to be a material breach, unless the customof the parties in practice had been to allow late delivery. The issue is whether the breach is "material" or "non-material", which will depend on the facts of the case. At common law, unlike the UCC, all breaches are material! The issue whether a breach is "immaterial" and liable to cure or "material" and thus "incurable" only arises under the UCC in a sale of goods between merchants. Services contracts are governed by common law, not UCC. In a case of a mixed sale of goods plus installation services the UCC governs only if the predominant element of the contract is a sale of goods, otherwise the common law applies.
The canonical UCC case will test § 2-612. "Installment contract" because installment contracts raise all these issues. § 2-612 provides
(1) An "installment contract" is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contractcontains a clause "each delivery is a separate contract" or its equivalent.
(2) The buyer may reject any installment which is non-conforming if the non-conformity substantially impairs the value of that installment and cannot be cured or if the non-conformity is a defect in the required documents; but if the non-conformity does not fall within subsection (3) and the seller gives adequate assurance of its cure the buyer must accept that installment.
(3) Whenever non-conformity or default with respect to one or more installments substantially impairs the value of the whole contract there is a breach of the whole. But the aggrieved party reinstates the contract if he accepts a non-conforming installment without seasonably notifying of cancellation or if he brings an action with respect only to past installments or demands performance as to future installments.
The first issue is the installment contract is ONE contract with multiple deliveries -- not a series of contracts. This was a recurring question at common law, where multiple deliveries often raised the question whether there was only one contract or several. Because of the material breach rule at common law such installment contracts would sometimes be interpreted as multiple contracts. (1) thus simplifies this issue.
(2) provides that the buyer may reject a non-conforming delivery without breaching the contract or ending the contractual relationship, unlike common law where all breach is material and end the contract. Buyer may only reject an incurable non-conforming installment.
(3) provides that the non-conforming delivery can be a breach of the entire contract; however, if the buyer accepts a non-conforming delivery without notice of cancellation or does not sue for material breach of the entire contract but only for partial breach.
Suppose a seller has delivered non-conforming goods. What are the buyers options?
1) accept some or all of the goods and sue for damages
2) accept none of the goods and sue for damages
3) accept all of the goods and sue for damages
however, the seller must first be given a reasonable chance to cure the non-conforming delivery.
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