University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

249

Pages:

2
Author:

bratrochanter

Summary of Appendix B: UCC Article 2 - Buyer's and Seller's Remedies and Key Provisions Buyer's Remedies (§ 2–711 to § 2–717) 1. General Remedies (§ 2–711): o Buyers can cancel the contract if the seller fails to deliver, repudiates, or delivers non-conforming goods. o Buyers may:  "Cover" by purchasing substitute goods and recover damages.  Claim damages for non-delivery.  Recover paid amounts or hold rejected goods with a security interest. 2. Cover and Substitute Goods (§ 2–712): o Buyers can procure substitute goods in good faith and within a reasonable time. o Damages include the difference between the cover cost and the contract price, plus incidental and consequential damages. 3. Damages for Non-Delivery (§ 2–713): o Buyers can recover the difference between market price at breach discovery and the contract price, plus incidental and consequential damages. 4. Damages for Accepted Goods (§ 2–714): o For accepted but non-conforming goods:  Damages equal the difference between goods' value as delivered and as warranted.  Buyers can also claim incidental and consequential damages. 5. Incidental and Consequential Damages (§ 2–715): o Incidental damages: Costs for inspection, transport, care, or covering substitute goods. o Consequential damages:  Losses from specific needs the seller knew at contracting.  Injury to property or person from breach of warranty. 6. Specific Performance or Replevin (§ 2–716): o Buyers may demand specific performance for unique goods or goods they cannot reasonably cover. o Replevin (recovery of goods) is permitted when substitute goods are unattainable. 7. Offset Damages (§ 2–717): o Buyers can deduct damages from amounts owed to the seller, provided the seller is notified. Seller's Remedies (§ 2–702 to § 2–710) 1. General Remedies (§ 2–703): o Sellers may:  Withhold delivery or stop goods in transit.  Resell goods and recover damages.  Seek damages for non-acceptance.  Cancel the contract. 2. Resale of Goods (§ 2–706): o Sellers can resell goods in a commercially reasonable manner. o Damages include the difference between resale and contract prices plus incidental damages. 3. Damages for Non-Acceptance (§ 2–708): o Damages equal the difference between the market price and the contract price plus incidental damages. o If this is insufficient, sellers can claim lost profits, including overhead. 4. Action for Price (§ 2–709): o Sellers can sue for the contract price if:  Goods are accepted or lost after the buyer assumes risk.  Identified goods cannot be resold after reasonable effort. 5. Incidental Damages (§ 2–710): o Includes costs for stopping delivery, transportation, storage, and resale. Key Concepts 1. Market Price and Damages (§ 2–723): o Market price is determined at the place and time of breach discovery. o Evidence of prevailing prices must prevent unfair surprise. 2. Statute of Limitations (§ 2–725): o Contract breach claims must be filed within four years, adjustable to one year by agreement but not extendable. 3. Remedies for Fraud (§ 2–721): o Buyers and sellers retain all remedies under the UCC for fraudulent or non-fraudulent breaches. 4. Cancellation and Rescission (§ 2–720): o Cancellation of a contract does not waive claims for prior breaches unless explicitly stated.