Question

Following a mobile home show at the Meadowlands Sports Complex, Mr. and Mrs. Ramirez visited Autosport's showroom in Somerville. On July 20, 1978 the Ramirezes and Donald Graff, a alesman for Autosport, agreed on the sale of a new camper and the trade-in of the van owned by Mr. and Mrs. Ramirez. Autosport and the Ramirezes signed a simple contract reflecting a $14,100 purchase price for the new van with a $4,700 trade-in allowance for the Ramirez van, which Mr. and Mrs. Ramirez left with Autosport. After further allowance for taxes, title and documentary fees, the net price was $9,902. Because Autosport needed two weeks to prepare the new van, the contract provided for delivery on or about August 3, 1978.

The Ramirezes appeared on August 3, but the van was not ready.  Two additional weeks went by, and the Ramirezes again appeared to complete the sale, but the van was still not ready.  After several more visits, the Ramirezes ultimately rejected the van and demanded the return of their trade-in, however, unbeknownst to the Ramirezes, Autosport transferred title in the new van to the Ramirezes on August 15, and subsequently sold their trade-in to a third party for approximately $5,000. When they could not get a remedy from Autosport, the Ramirezes filed a lawsuit for breach of contract.

Analyze this problem using the Perfect Tender Rule. What remedies are available?   

Answer 1

The perfect tender rule empowers the buyer of goods to reject the goods if it is not in perfect tender, i.e. as per the specifications and descriptions as in the contract.

In this case, the contract was to deliver a van on a prescribed date, on which the company could not deliver and breached the contract with the customer who already paid for it and traded in their old van. Since the plaintiff was presumably without their van, they needed a new one as soon as possible. By breach of the delivery date, the plaintiff was forced to suffer by the company and have every right to revoke the contract and demand the return of their traded in vehicle. Since the vehicle was already sold by the company to someone, it will be liable to return the fair market price of the van to its owners besides returning them the money paid by them.