Sales contract management for security

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what is the performance of Sales and Lease contracts involving personal property and to begin with personal property is any property other than land or the buildings or permanent fixtures attached to it but in general the sale or lease of goods is concerned or governed by The Uniform Commercial Code that is most states have adopted the Uniform Commercial Code nearly in its entirety thus the commercial law of each state is consistent with this uniform model wall with that being said articles 2 and 2A of the UCC The Uniform Commercial Code govern the sale of goods and the lease of goods respectively with that being said how does that apply to the performance of these contracts well let's look first at the Bare Basics of a contract in a contract you have an agreement by two parties to exchange value that value is generally um one party is paying and the other party is providing a good in exchange for that money so that is the exchange of value these are the actions or duties of each party pay money exchange value right the value might be a good that is once again sold in a single consummated transaction or it may be the provision of a good for a certain period of time and there may be secondary obligations under there such as the maintenance of that good that if the good were to break down or malfunction that it would be repaired or replaced or something like that so again an exchange of value some actions that must take place on behalf of each party in order to comply with the terms of the agreement now at the very beginning there's something called a tender of performance when you have an enforceable agreement one party has to go first that means one party has to seek to perform their obligations under the agreement and the law generally sets the order of this progression for example in the sale of goods a party is required to Tender payment before they are entitled to accept or receive the good from the other party the exact opposite would be true for a contract for services whereby the party is obligated to perform their services before the other party is obligated to pay for the goods so the party that is required under the law to execute or begin executing their duties first is must tender performance or seek offer to perform their obligation first a tender performance might simply be offering to pay money offering a check trying to send a wire transfer something of that that nature that is a tender of performance now the Tinder generally requires some level of acceptance of that offer by the other side that is the other party has to do something to perhaps receive the check to cash the check to do whatever it is to make the other parties tender of performance actual full performance of the agreement okay now any tender of performance or any attempt to perform your obligations needs to be commercially reasonable under the circumstances now that will change based upon the industry the nature of the agreement what are the what are the terms of the lease what are the terms of the sale contract in addition to Simply providing money and providing the good okay so once again the attempt to perform must be commercially reasonable based upon the context in the industry in which the uh the contract is made if one party is unsure that the other party has the ability or is going to perform that party has the right to demand Assurance of performance right from the other party and that Assurance of performance it must be reasonable but it must be some show that the party still has the ability and intention to perform their obligations under the agreement and until that party provides that demonstration of an intent to indeed perform the party that has the duty first to perform the party that wishes to Tender performance does not have to perform yet they can suspend their performance until they receive that Assurance of future performance by the other side if they never receive that that is that gives rise to what we call anticipatory repudiation the party has the right to back out of the agreement because they have a reasonable belief under the circumstances that the other party is not going to perform that their performance will go unanswered and they will be harmed by it okay so that's Assurance of performance now we need to talk about the concept of what is performance well there's the concept of substantial performance and complete performance the absence of performance is a breach but not all performance is the same sometimes a party May fully perform do exactly what they're supposed to do Under the agreement and in other scenarios the party May do most of what they're supposed to do but there'll be minor things things that are not material to the agreement that don't form the core value or the Crux of the agreement that are left undone now this level of performance is not a breach it may give rise to an action for Recovery of value or an offset of what is paid for example but it is not a breach of the agreement the underlying agreement is still in force and effect with that being said an example of complete performance if I have to pay you money for a good and you were to deliver that good to me under certain conditions I pay you the money you deliver that good to me under those conditions everything is fine you have completely performed but what if you deliver the good to me but you don't deliver it under the conditions as stated you don't delay deliver it packaged correctly you don't deliver it at the location that we announced you don't deliver it well any minor thing that is ancillary to me receiving the product you performed but you didn't completely perform now I may be able to seek some level of offset for any losses or lack of value that I did not receive or suffered as a result of your substantial performance rather than complete performance but once again you have not breached the agreement a failure to do something material like deliver the good is a breach of the agreement that's highly material that's the core or Crux of what the agreement is about okay a party if they do not perform they are in breach unless they can identify some way to get out of the contract and that means making the contract void through some provision that allows it to be voidable you can allege duress undo influence fraud misrepresentation unconscionability and practicability any of these Concepts that would make it otherwise so a valid contract is not enforceable and thus voidable by one party or both parties so there are many ways to actually get out of an agreement but that being said you must identify one of them otherwise your failure to perform is a breach with that being said Sales and Lease contracts are very similar to any other type of contract the essence of what it means to perform will be affected by the industry of course and there may be a different order as to what constitutes tender of performance and there may be additional rights of assurance of performance but with that being said otherwise the performance of these Agreements are consistent with performance of generally a contract