Contractual Provisions Affecting Remedies

Contractual Provisions Affecting Remedies

üLimitation of Damages.

üLimitation of Remedies.

üWaiver of Defenses.

Lemon Law

The majority of the states have enacted lemon laws in regard to automobile sales.

Seller’s limitations were too “good.”

Buyer must:

§Give notice.

§Seller gets four chances to fix.

§Arbitration: decision binding on manufacturer, not on Buyer.

Remedies for Breach of International Sales Contracts

CISG provides remedies similar to the UCC.

Article 74 provides for money damages, foreseeable consequential damages.

§Damages are difference between contract price and market price.

Article 28 provides for specific performance where a country would normally grant it in their own law.

Parties can agree to what law they will use.

Buyer-Seller Delivers Nonconforming Goods

Buyer-Seller Delivers Nonconforming Goods

If Seller does not make perfect tender Buyer has the right to reject all or part of goods.

§Buyer must timely notify Seller of rejection and reasons and follow Seller’s directions.

§Buyer is entitled to commission for selling perishable goods.

§Buyer may store the goods and retain a security interest in the goods for his costs.

If Buyer has accepted non-conforming goods, she may:

§Sue for breach of warranty.

§Sue for ordinary damages.

§Deduct damages from purchase price.

Case 22.3:  China National Metal Products v. Apex Digital (2001).

Buyer-Goods in Seller’s Possession

Buyer-Goods in Seller’s Possession

Buyer Wants Goods

§Specific performance or replevin

§Recover goods from Seller if Seller becomes insolvent within 10 days after receiving first payment.

Buyer Does Not Want Goods

§Rescind contract.

§Cover or do not cover and sue for breach of contract.     

Case 22.2: KGM Harvesting v. Fresh Network (1995).

Lemon Laws

Lemon Laws

Automobile under warranty possesses significant defect that affects vehicles use or value that cannot be fixed within statutory period. Buyer’s remedies include:

§A new car;

§Replacement of defective parts;

§Or full refund. 

Contractual Provisions Affecting Remedies

Contractual Provisions Affecting Remedies

Parties to a contract can vary their rights and duties that preempt UCC provisions.

Parties can stipulate whether contractual provisions are “exclusive”.  However, provisions limiting consumer rights may be unconscionable.