High School

Breeze Manufacturing agrees to purchase goods from Hawkins Inc. In what situation could Breeze reject a shipment of goods from Hawkins under the perfect tender rule?

Answer :

The situation that would make breeze reject a shipment of goods from hawkins under the perfect tender rule is when the goods do not meet the specifications detailed in the contract.

What is a perfect tender rule?

In U.S., the perfect tender rule means the legal right for a buyer of goods to insist upon "perfect tender" by the seller. As provided under Article 2 of the Uniform Commercial Code, when we are dealing with the sale of goods, the rule states that a buyer is permitted to reject goods shipped or delivered to it from a seller if the seller's tender of the goods is in some way not perfect

Some of the rights that the perfect tender rule give a buyers of goods are the right to accept delivery of all of the goods and the right to reject the seller's goods if the goods are not exactly as described in the contract.

However, some exceptions to the perfect tender rule are when the seller provides a non-conforming tender but notifies the buyer that it will cure it prior to the expiration of its performance delays or if the parties had entered into an installment contract.

Missing options

a. If Breeze accepted flawed goods from Hawkins in the past.

b. The goods do not meet the specifications detailed in the contract.

c. The industry practice is to allow for minor flaws, but Breeze and Hawkins did not specifically agree to that.

d. If Hawkins Inc. hires a carrier to deliver the goods that was different from the carrier the parties included in the contract.

b. The goods do not meet the specifications.

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Final answer:

Breeze Manufacturing can reject a shipment from Hawkins Inc. under the perfect tender rule if the goods or delivery do not exactly meet the terms of their contract, such as not being ready by March 30th or not meeting the agreed specifications for the discount price of $10.5 million.

Explanation:

Under the perfect tender rule, Breeze Manufacturing could reject a shipment of goods from Hawkins Inc. if the goods or the delivery fail to conform precisely to the terms of their contract. The perfect tender rule is an aspect of the Uniform Commercial Code that provides the buyer the right to expect perfect fulfillment of the contract terms as agreed upon. Should there be any discrepancy, such as damaged goods, incorrect quantities, or delivery issues, the buyer is entitled to reject the shipment.

Considering the business scenario provided, if Hawkins Inc. does not have the products ready to ship by the agreed date of March 30th or if the products do not meet the specified terms agreed upon for $10.5 million, Breeze Manufacturing can exercise their right under the perfect tender rule to reject the shipment.