An installment contract states that the Seller will deliver 12 monthly shipments. The first shipment is slightly late. Can the Buyer cancel the whole contract?

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UCC Contracts QUESTION #5850

Question 1

Yes, under the 'Perfect Tender Rule'.
No, unless the delay substantially impairs the value of the whole contract.✔️
Yes, but only if the Buyer is a non-merchant.
No, because installment contracts cannot be canceled.

Correct Answer Explanation

The Perfect Tender Rule does not apply to installment contracts. Under UCC §2-612, the buyer can only reject an installment or cancel the contract if the defect substantially impairs the value.

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