1. 1 George Mason School of Law Contracts II Warranties This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu

2. Next day  Finish Warranties  Mistake: 709-47 2

3. 3 Conditions and Warranties Promises ConditionsWarranties Election Forfeiture DamagesDamages only

4. Warranties  With a warranty a seller assumes a risk as to the product  The prior question is whether the risk should be born by the seller or the buyer 4

5. 5 Let’s say seller sells a whizbang $999.99 at Home Depot

6. 6 The whizbang 50% chance of a whiz It might go whiz

7. 7 The whizbang 50% chance of a whiz, 50% of a bang It might go whiz … or it might go bang …

8. 8  The expected monetary value of an accident is p*L Evaluating risk: Expected Values

9. 9  The expected monetary value of an accident is p*L where p is the probability of occurrence And L is the cost of the accident on occurence Evaluating risk: Expected Values

10. 10  So the expected monetary value for an accident with a 50 percent probability of a loss of $250 is $125 Evaluating risk: Expected Values

11. 11  The least cost risk avoider, in contract and tort law Joined at the hip historically with the action on the case Assigning risk

12. 12  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs The Least-Cost Risk Avoider

13. 13  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125 The Least-Cost Risk Avoider

14. 14  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125  So Buyer has a whizbang at a cost of (1,000 + 125 =) $1125 The Least-Cost Risk Avoider

15. 15  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125  Assume that seller (but not Buyer) can eliminate this risk at a cost of $100 The Least-Cost Risk Avoider

16. 16  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  Do we see a Coasian bargain here? How will the parties assign the risk? The Least-Cost Risk Avoider

17. 17  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expect cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  Seller is the least-cost risk avoider and buyer will pay seller to assume the risk The Least-Cost Risk Avoider

18. 18  Assume that the expect cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  How will the parties assign the risk? Buyer will pay seller to assume the risk And what will this do to the purchase price? The Least-Cost Risk Avoider

19. 19  Assume that the expect cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  How will the parties assign the risk? Buyer will pay seller to assume the risk What is the range of prices between which the parties will bargain? The Least-Cost Risk Avoider

20. 20  Assume that the expect cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  How will the parties assign the risk? Buyer will pay seller to assume the risk Seller will not accept less than $100 and (risk-neutral) buyer will not pay more than $125 The Least-Cost Risk Avoider

21. 21  Assume that the expect cost of a bang is $125  Seller (but not Buyer) can eliminate this risk at a cost of $100  Let’s say that seller offers a warranty for the risk at a price of $110 Buyer pays an extra $110 and saves $125 The Least-Cost Risk Avoider

22. 22  How it looks to buyer: No warranty: 1,000 + 125 = $1125 With the warranty: $1110 The Least-Cost Risk Avoider

23. 23  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125  Buyer (but not Seller) can eliminate this risk at a cost of $100 What happens now? Let’s flip this Buyer as Least-Cost Risk Avoider

24. 24  Seller sells a whizbang to Buyer for $1,000, with no warranties as to bangs  Assume that the expected cost of a bang is $125  Buyer (but not Seller) can eliminate this risk at a cost of $100 Buyer will spend $100 to eliminate a risk with an EMV of $125 Let’s flip this Buyer as Least-Cost Risk Avoider

25. 25  Buyer’s options; Take no care: 1000 + 125 = $1125 Take care: 1000 + 100 = $1100 Let’s flip this Buyer as Least-Cost Risk Avoider

26. 26  The parties will seek to assign the risk to the party who can most efficiently eliminate it. The Least-Cost Risk Avoider

27. 27  The parties will seek to assign the risk to the party who can most efficiently eliminate it.  An application of the Coase Theorem If bargaining is costless, does it matter how the law assigns the risk? The Least-Cost Risk Avoider

28. 28  The parties will seek to assign the risk to the party who can most efficiently eliminate it.  An application of the Coase Theorem And if bargaining isn’t costless? The Least-Cost Risk Avoider

29. 29  You’re a judge. You have a pretty good idea who the least-cost risk avoider is. The parties have left the question of risk silent in their contract. How do you assign the risk? The Least-Cost Risk Avoider

30. 30  “Mimicking the market” The Least-Cost Risk Avoider

31. 31  Same example. But now neither party can eliminate the risk for less than $125. On whom should the risk fall? Does it matter? A second way of thinking about Least-Cost Risk Avoiders

32. 32  Same example. But now neither party can eliminate the risk for less than $125. Suppose one party is in a better position to value the loss? A second way of thinking about Least-Cost Risk Avoiders

33. 33  Same example. But now neither party can eliminate the risk for less than $125. Suppose one party is in a better position to value the loss? As between a manufacturer and a consumer, who is this likely to be? A second way of thinking about Least-Cost Risk Avoiders

34. 34  Suppose that seller is a large corporation and buyer is an impecunious consumer. Does that make a difference? A third way of thinking about Least-Cost Risk Avoiders

35. 35  Suppose that seller is a large corporation and buyer is an impecunious consumer. Does that make a difference?  Do risk preferences matter? A third way of thinking about Least-Cost Risk Avoiders

36. Are you an EMV’er?  An EMV’er always selects the payoff with the highest expected monetary value (p*O) 36

37. Are you an EMV’er?  An EMV’er always selects the payoff with the highest expect monetary value (p*O)  Suppose I offer you a lottery ticket with a.5 probability of 0 and a.5 probability of $2. Would you pay me 50¢ for the ticket? 37

38. Are you an EMV’er?  An EMV’er always selects the payoff with the highest expect monetary value (pO)  Suppose I offer you a lottery ticket with a.5 probability of 0 and a.5 probability of $2. Would you pay me 50¢ for the ticket? EMV =.5($2) = $1.00 38

39. Are you an EMV’er?  An EMV’er always selects the payoff with the highest expect monetary value (pO)  Suppose I offer you a lottery ticket with a.5 probability of 0 and a.5 probability of $10,002. Would you pay me $5,000.50 for the ticket? 39

40. Are you an EMV’er?  An EMV’er always selects the payoff with the highest expect monetary value (pO)  Suppose I offer you a lottery ticket with a.5 probability of 0 and a.5 probability of $10,002. Would you pay me $5,000.50 for the ticket? EMV =.5($10,002) = $5,001 40

41. 41 Three kinds of people  EMV’ers are risk neutral They always take the gamble with the highest EMV

42. 42 Three kinds of people  EMV’ers are risk neutral  Most people are risk averse They’ll pass on some opportunities with a positive EMV

43. 43 Three kinds of people  EMV’ers are risk neutral  Most people are risk averse  Risk lovers are risk prone They will accept some gambles with a negative EMV

44. 44 Recall what we said about utility  Utility is the economist’s measure of well-being (cf. utilitarianism)  Ordinal Utility measures preferences without weighing them (first, second, third are ordinal numbers)  Cardinal Utility (Bentham’s “utils”) weighs utility (one, two, three are cardinal numbers)

45. 45 Cardinal Utility plotted against EMV Utility $EMV For EMV’ers, utility is linear with money

46. 46 Cardinal Utility Utility $EMV For the risk averse, the marginal utility of money declines (more money generates increasingly smaller increases in utility).

47. 47 Cardinal Utility  Start with someone with 1,000 Utility $ 1,000

48. 48 Cardinal Utility  Would he be willing to take a fair bet of 250? [.5(0) +.5(250)] Utility $ 1,000

49. 49 Cardinal Utility  Would he be willing to bet 250? Utility $ 1,0007501250

50. 50 Cardinal Utility  Mapping this into utilities Utility $ 1,0007501250

51. 51 Cardinal Utility  Mapping this into utilities Utility $ 1,0007501250

52. 52 Cardinal Utility  What is the utility if he rejects the gamble? Utility $ 1,0007501250

53. 53 Cardinal Utility  What is his expected utility if he takes the gamble? Utility $ 1,0007501250

54. 54 Cardinal Utility  What is his expected utility if he takes the gamble? Utility $ 1,0007501250

55. 55 Cardinal Utility  So there is a utility loss from the gamble Utility $ 1,0007501250

56. 56 Are there policy implications?  So there is a utility loss from the gamble Utility $ 1,0007501250

57. 57 No utility loss for an EMV’er who takes a fair bet Utility $EMV For EMV’ers, utility is linear with money

58. 58  Would you assume that firms are risk-neutral and consumers risk averse as to a loss of $250? This suggests a third way of thinking about Least-Cost Risk Avoiders

59. 59  There is a 50 percent probability of a loss of $250  Same example. But now neither party can eliminate the risk for less than $125 Would you assume the firms are risk- neutral and consumers risk averse? Would you expect the risk to be born by the wealthier party? This suggests a third way of thinking about Least-Cost Risk Avoiders

60. Further readings?  http://cyber.law.harvard.edu/bridge/ LawEconomics/risk.htm 60

61. 61  Suppose that seller sells 10,000 whizbangs and buyer buys only one? Does that make a difference? Now--A fourth way of thinking about Least-Cost Risk Avoiders

62. Probability distribution for buyer 62 $EMV 7501,000 %.5 Mean = 875

63. Probability distribution for seller of 60 whizbangs 63 875 % 1.0

64. Probability distribution for seller of 200 whizbangs 64 875 % 1.0 All Curves have the same mean value ($875) but different risk (dispersion from the mean).

65. Probability distribution for seller of 10,000 whizbangs 65 $EMV 875 % 1.0

66. The “insurance idea” in tort and contract law 66

67. 67 1.Where one party is better able to reduce the risk or the harm 2.Where one party is better able to value the loss 3.Assuming risk aversion, where one party is wealthier than the other 4.Assuming risk aversion, where one party is a better insurer because he can diversify the risk Four kinds of Least-Cost Risk Avoiders

68. 68  There’s something called State Farm…  Who then would you expect to bear a loss, as between: Seller (manufacturer) Buyer (self-insurance) Third party insurance company Let’s add the possibility of third party insurance

69. 69  Who would you expect to bear the loss for: Liability for a faulty transmission? Emotional Distress World War III? Three kinds of Least-Cost Risk Avoiders

70. Express and Implied Terms  What does UCC § 2-313 require before a statement becomes a warranty? 70

71. Sessa v. Riegle at 660  Was there a finding that the horse that was sold was defective? 71 Riegle Sessa

72. Sessa v. Riegle  Was there a finding that the horse that was sold was defective? Tendenitis might have resulted from the drive, or from unclean conditions in Sessa’s stable  In the later case, buyer took the risk 72

73. Sessa v. Riegle  Was there a finding that the horse that was sold was defective? Tendenitis might have resulted from the drive, or from unclean conditions in Sessa’s stable  In the former case, who took the risk? UCC §§ 2-501(1)(a), 2-504 73

74. Sessa v. Riegle  Why not within UCC §2-313? 74

75. Sessa v. Riegle  Why not within UCC §2-313 Not “an affirmation of fact”  Statements of opinion: UCC §2-313(2) Mere puffs 75

76. Sessa v. Riegle  Why not within UCC §2-313 “an affirmation of fact”  Statements of opinion: UCC §2-313(2) Mere puffs A special rule for horse traders?  “horses are fragile creatures” 76

77. Sessa v. Riegle  Why not within UCC §2-313 “an affirmation of fact”  Statements of opinion: UCC §2-313(2) Mere puffs Is there never a warranty in such cases? 77

78. Sessa v. Riegle  Why not within UCC §2-313 “an affirmation of fact”  Statements of opinion: UCC §2-313(2) Mere puffs Is there never a warranty in such cases?  Frederickson at 665  McNair at 665  Flood at 663 78

79. Royal Business Machines at 665 79

80. Royal Business Machines at 665  Representations: Copy machine… Was of high quality Frequency of repair was very low Would remain so Will bring buyer substantial profits 80

81. Royal Business Machines  Copy machine: Machines were tested 81

82. Royal Business Machines  Copy machine: Machines will not cause fire 82

83. 83 George Mason School of Law Contracts II Warranties This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu

84. Next day  Finish Warranties  Mistake up to Scott 718 84

85. 85 1.Where one party is better able to reduce the risk or the harm 2.Where one party is better able to vale the loss 3.Assuming risk aversion, where one party is wealthier than the other 4.Assuming risk aversion, where one party is a better insurer because he can diversify the risk Four kinds of Least-Cost Risk Avoiders

86. IncentivesInsurance 1Risk or Harm Avoiders 2Lower Information Costs 3Differential Risk Aversion 4Risk Diversification 86

87. Express and Implied Terms  What does UCC § 2-313 require before a statement becomes a warranty? 87

88. Express and Implied Terms  What do each of these exclude? Affirmation of fact Relates to the goods Part of the basis of the bargain 88

89. Express and Implied Terms  Cf. UCC § 2-313(1)(b) Description of the goods Part of the basis of the bargain 89

90. Contract and Tort  The abolition of privity of contract in UCC §§ 2-313A and 2-313B  Cf Prosser at 672 90

91. Specificity: Searls v. Glasser at 668  “recession resistant”?  Keith: “sure-footed seaworthiness”? 91

92. Implied Warranties  Merchantability: 2-314  Fitness: 2-315  Title: 2-312 92

93. Merchantability  Flippo at 669 Implied warranty in UCC 2-314 93

94. Merchantability  What is “merchantability”? Cf. UCC § 2-314(2) 94

95. Merchantability  Qu. expected impurities Cf. Coffer at 671 95

96. Merchantability  I sell you a car whose transmission fails six months later? What’s the issue? 96

97. Merchantability  I sell you a car whose transmission fails six months later? Qu. Lapse of time UCC § 2-314, cmt. 13 97

98. Fitness for Purpose  Merchantabilty: UCC § 2-314  Fitness: UCC § 2-315 98

99. Implied UCC Warranties  I sell you a car which proves unsuitable for off-terrain driving 99

100. Fitness: UCC § 2-315  How is this different from merchantability? 100

101. Fitness: UCC § 2-315  How is this different from merchantability?  What more is needed? Seller knows or has reason to know  Particular purpose  Buyer’s reliance 101

102. Fitness: UCC § 2-315  Why no warranty in Lewis and Sims at 674? 102

103. Implied Warranties  What’s the problem in Gulash at 675? 103

104. Warranty of Workmanlike Performance  Construction and services contracts Could any contractor be thought to resist such a duty? 104

105. Exemption Clauses  UCC §§ 2-314, 2-315: “Unless excluded or modified”  UCC § 2-316 What does (1) mean? 105

106. Exemption Clauses  Pelc v. Simmonds at 676 106 1978 Sunbird

107. Exemption Clauses  Pelc v. Simmonds at 676 Who was the seller 107

108. Exemption Clauses  Pelc v. Simmonds at 676 Oral statements by Simmons  Only thing wrong is the a/c  Good little car, above average 108

109. Exemption Clauses  Pelc v. Simmonds at 676 History of the car 109

110. Exemption Clauses  Pelc v. Simmonds Oral statements by Simmons  Only thing wrong is the a/c  Good little car, above average “As is” clause. UCC § 2-316(3)(a) 110

111. Exemption Clauses  Pelc v. Simmonds Oral statements by Simmons  Only thing wrong is the a/c  Good little car, above average “As is” clause. UCC § 2-316(3)(a) Should UCC § 2-316(1) have been invoked? 111

112. Exemption Clauses  What if it had been proven that seller knew it was a clunker?  Morris at 679 112

113. Exemption Clauses  The “doomed” car 113

114. Exemption Clauses Weisz v. Parke-Bernet at 680  Can you spot the fake Van Gogh? 114

115. Weisz v. Parke-Bernet  Why was the exemption clause ignored? 115

116. Weisz v. Parke-Bernet  What is a “Raoul Dufy”? 116

117. Weisz v. Parke-Bernet  Might a breach be so fundamental as to wipe out the contract? Suisse Atlantique, [1966] 2 All E.R. 61 (H.L.) 117

118. 118 George Mason School of Law Contracts II Warranties This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu

119. Next day  Mistake 119

120. Substantial Performance vs. Perfect Tender  Sales Law: Perfect Tender Rule UCC § 2-601  Non-sales Law: Substantial Performance Restatement § 229 (no disproportionate forfeiture unless “material” event) Restatement § 237 (a condition that “no uncured material failure 120

121. Substantial Performance in Non-sales Law  Non-sales Law: Substantial Performance Materiality defined in Restatement § 241 121

122. 122 Substantial Performance  Jacob & Youngs v. Kent at 65 122

123. Substantial Performance in Jacob & Young 123

124. 124 Substantial Performance  Jacob & Youngs v. Kent at 65 Was there a breach? How serious was it? 124

125. 125 Substantial Performance  Jacob & Youngs v. Kent What remedy does the Π seek? 125

126. 126 Substantial Performance  What are Dependent vs. Independent Promises, and why did it matter? 126 Benjamin Cardozo

127. 127 Substantial Performance  What are Dependent vs. Independent Promises? Dependent promises as “conditions”  Tender of price and of delivery under Article 2 Independent promises as mere “promises” 127

128. 128 Substantial Performance  What are Dependent vs. Independent Promises? Dependent promises as “conditions”  Tender of price and of delivery under Article 2 Independent promises as mere “promises” I know Cardozo called it a “promise” but I’m going to call it a “warranty”. 128

129. 129 Conditions and Warranties Promises ConditionsWarranties (Dependent Promises) (Independent Promises) Forfeiture Damages Damages only

130. 130 Substantial Performance  So how does one tell whether it’s a condition or warranty? 130

131. 131 Substantial Performance  How does one tell? “Intention not otherwise revealed may be presumed to hold in contemplation the reasonable and probable.” 131

132. 132 Substantial Performance  How does one tell? Do considerations of “equity and fairness” get one to the same place? 132

133. Substantial Performance  Could the parties to a building contract bargain for perfect tender? “This is not to say that the parties are not free …” 133

134. Substantial Performance  Could the parties to a building contract bargain for perfect tender?  Did they in Jacob & Young? 134

135. Substantial Performance  Could the parties to a building contract bargain for perfect tender?  Did they in Jacob & Young?  Could you draft a clause that would have given Kent a right to rescind? 135

136. Substantial Performance  Could the parties to a building contract bargain for perfect tender?  Did they in Jacob & Young?  Would the parties have agreed to such a clause? Why not? 136

137. 137 Substantial Performance  Wait a minute—what about Coasian bargaining? 137

138. 138 Substantial Performance  Wait a minute—what about Coasian bargaining? Assume: Value of house with Reading pipe is $77,000 Value of house with Cohoes pipe is $76,900 Cost of replacement is $10,000 138

139. 139 Substantial Performance  Assume: Value of house with Reading pipe is $77,000 Value of house with Cohoes pipe is $76,900 Cost of replacement is $10,000  So what would a Coasian bargain look like, given those numbers? 139

140. 140 Substantial Performance  Assume: Value of house with Reading pipe is $77,000 Value of house with Cohoes pipe is $76,900 Cost of replacement is $10,000  So will the pipe be replaced? 140

141. 141 Substantial Performance  Assume: Value of house with Reading pipe is $77,000 Value of house with Cohoes pipe is $76,900 Cost of replacement is $10,000  Will this satisfy the builder? 141

142. Substantial Performance  Is Grun Roofing at 682 consistent with Jacob and Youngs? 142

143. Substantial Performance  Grun Roofing What is substantial performance for a roof? 143

144. Substantial Performance  Grun Roofing What would it cost the owner to install a completely new roof? 144

145. Substantial Performance  Grun Roofing What would it cost the owner to install a completely new roof? How did the court arrive at damages of $122? 145

146. Substantial Performance  Remedies in Plante v. Jacobs at 688 Cost of repair or diminished value?  What is the proper measure of Πs loss? 146

147. Substantial Performance  Plante v. Jacobs at 688 Cost of repair or diminished value?  Does the latter undercompensate? 147

148. Substantial Performance  Plante v. Jacobs at 688 Cost of repair or diminished value?  Does the former open the door to opportunism? 148

149. Haymore v. Levinson at 685  Was there a breach? 149

150. Haymore v. Levinson at 685  Was there a breach?  The two standards? 150

151. Grun Roofing vs. Haymore  Personal taste or fancy vs. operative fitness “mere taste may be controlling” in the former case 151

152. Willful deviations  Cf Grun Roofing at 684 “Contractor must have intended to comply”  Material Movers at 687 Can you justify this on efficiency grounds? 152

153. 153 1.Where one party is better able to reduce the risk or the harm 2.Where one party is better able to value the loss 3.Assuming risk aversion, where one party is wealthier than the other 4.Assuming risk aversion, where one party is a better insurer because he can diversify the risk Recall the Four kinds of Least-Cost Risk Avoiders

154. Four kinds of Least-Cost Risk Avoiders IncentivesInsurance 1Risk or Harm Avoiders 2Lower Information Costs 3Differential Risk Aversion 4Risk Diversification 154

155. 155  Warranties also signal product quality The informational asymmetry between seller and buyer Now: Warranties as a signaling strategy

156. 156  Warranties also signal product quality As between two sellers, one of whom offers a warranty and the other of whom doesn’t, you have more information about the former Recall the Four kinds of Least-Cost Risk Avoiders

157. Warranties as a signalling strategy  If a dealer offers you an extended warranty at a premium price, why does Consumers Reports tell you to reject this? 157

158. Warranties as a signalling strategy  If a dealer offers you an extended warranty at a premium price, why does Consumers Reports tell you to reject this? The offer of the extended warranty gives you the information, even if you don’t take it up 158

159. Warranties as a signalling strategy  If a dealer offers you an extended warranty at a premium price, why does Consumers Reports tell you always to reject this? Absence of screening and competitive pricing? 159

160. Warranties as a signalling strategy  If a dealer offers you an extended warranty at a premium price, why does Consumers Reports tell you always to reject this? Judgment biases? 160

161. Warranties as a signalling strategy  If a dealer offers you an extended warranty at a premium price, why does Consumers Reports tell you always to reject this? Adverse selection problems? 161

162. Adverse selection: Flood insurance and Lower Town 162 Flood insurance isn’t such a good deal in la ville en haut, and extended car warranties are such a good deal for low maintenance drivers

163. Can someone explain this to me? 163 Do we think that Sean Connery drinks Japanese Scotch?

164. If a warranty can operate as a signal, what about a breach? 164

165. Why did Van Halen ban brown M & Ms? 165

166. If a warranty can operate as a signal, what about a breach?  An argument for the perfect tender rule? 166

167. 167 George Mason School of Law Contracts II Warranties This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu

168. Next day  Finish Mistake  Excuse (plus Scott 84-93)  Frustration 168

169. Substantial Performance vs. Perfect Tender  Sales Law: Perfect Tender Rule UCC § 2-601  Non-sales Law: Substantial Performance Restatement § 229 (no disproportionate forfeiture unless “material” event) 169

170. 170 Presumption against forfeiture in non- sales contracts Promises ConditionsWarranties Perfect TenderSubstantive Performance Forfeiture Damages Damages only

171. 171 Perfect Tender in Sales Law Promises ConditionsWarranties Perfect TenderSubstantive Performance Forfeiture Damages Damages only

172. But what Sales Law gives the buyer, it also taketh away  Buyer gets a perfect tender rule, BUT: Modification, waiver, estoppel, Seller’s right to cure 172

173. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Conforming goods 2-106 173

174. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Accept2-606Reject 2-602 174

175. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Accept2-606Reject 2-602 Damages 2-714, 2-715 175

176. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Accept2-606Reject 2-602 Damages 2-714, 2-715Revocation of Acceptance 2-608 176

177. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Accept2-606Reject 2-602 Damages 2-714, 2-715Revocation of Acceptance 2-608 Cancel 2-711, 2-106(4) Damages 2-711, 2-713 177

178. Buyer’s Remedies in the UCC 2-601 Perfect Tender required Accept2-606Reject 2-602 Action for price paid 2-711 Incidental Damages 2-711, 2-713 Cover plus damages 2-711, 2-712 178

179. Cure by Seller 2-601 Perfect Tender required Accept2-606Reject 2-602 Cure 2-508Don’t cure 179

180. Seller’s Remedies Goods not deliveredGoods delivered Withhold delivery 2-703 Stoppage in transitu 2-705 Damages 2-703, 2-708 180

181. Seller’s Remedies Goods not deliveredGoods delivered Action for the price 2-709 181

182. Opportunism and Perfect Tender?  The problem of buyer opportunism is addressed by the seller’s right to cure 182

183. Opportunism and Perfect Tender?  TW Oil at 691 Why did buyer reject? 183

184. Opportunism and Perfect Tender?  TW Oil at 691 Why did buyer reject?  25% price drop 184

185. Opportunism and Perfect Tender? 185

186. Opportunism and Perfect Tender?  TW Oil: What was the breach and was the seller aware of it? 186

187. Opportunism and Perfect Tender?  TW Oil: Why did buyer reject? Cure: 2-508  When was delivery to take place? 187

188. Opportunism and Perfect Tender?  TW Oil: Why did buyer reject? Cure: 2-508  When was the substitute delivery to occur? 188

189. Opportunism and Perfect Tender?  Cure after delivery date: 2-508(2) Seasonable notice Reasonable time Seller had reasonable grounds to believe would be acceptable, with or without money allowance 189

190. Opportunism and Perfect Tender?  TW Oil: Why did buyer reject? Cure: 2-508 If he would cure, must seller know that tender will be non-conforming? Nordstrom on Sales  Cf. footnote 40 190

191. Opportunism and Perfect Tender?  Could cure rights permit a seller to act opportunistically? 191

192. Opportunism and Perfect Tender?  What if first tender is junk? Ramirez at 697: an unconditional right to cure before the delivery date 192

193. Opportunism and Perfect Tender?  If the delivery date has passed, in what way might this be unfair to the buyer? 193

194. Opportunism and Perfect Tender?  If the delivery date has passed, in what way might this be unfair to the buyer? The delay by itself? Seller’s incentive problem 194

195. Ramirez at 695  Delivery scheduled for August 3  Trial Court finds rejection on Aug. 14 195

196. Why no cure permitted in Ramirez?  After rejection, seller still has a right to cure under 2-508(2)

197. Why no cure permitted in Ramirez?  Delivery scheduled for August 3  Rejection on Aug. 14  Did sellers effect a cure? 197

198. Why no cure permitted in Ramirez?  Delivery scheduled for August 3  Rejection on Aug. 14  Did sellers effect a cure?  Did buyers accept the goods in 2- 606? 198

199. Why no cure permitted in Ramirez?  Delivery scheduled for August 3  Rejection on Aug. 14  Did sellers effect a cure?  Did buyers accept the goods in 2- 606? Semble not, so no need to revoke acceptance 199

200. Why no cure permitted in Ramirez?  Delivery scheduled for August 3  Rejection on Aug. 14  Did sellers effect a cure?  Can the buyer revoke acceptance for a trivial defect? 200

201. Can 2-508 be waived by seller?  Qu. Consumer goods where seller specifies “goods satisfactory or money refunded” 201

202. When is buyer opportunism most a problem, and when are cure rights most needed? 202

203. When is buyer opportunism most a problem, and cure rights most needed?  Idiosyncratic, custom-made goods 203

204. When is buyer opportunism most a problem, and cure rights most needed?  Volatile markets 204

205. How might sellers behave opportunistically, given cure rights? 205

206. How might sellers behave opportunistically, given cure rights?  Sloppiness as to delivery?  Sloppy repair: Ramirez, Zabriskie at 702 206