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To which contracts does the Perfect Tender Rule apply, and to which does it not apply?

Answer :

Final answer:

The Perfect Tender Rule applies to the sales of goods, requiring the seller to deliver exactly as per the contract. It does not apply to service contracts, real estate sales, and can be negotiated around. Exceptions exist under the UCC 'right to cure' provision and installment contracts.

Explanation:

The Perfect Tender Rule, a concept in contract law, typically applies to the sales of goods. It stipulates that if the goods or delivery fail in any respect to conform to the contract, the buyer may reject the whole, accept the whole, or accept any commercial unit or units and reject the rest. In simple terms, it demands the seller to deliver goods that exactly meet the contract's terms, and if not, the buyer has the right to reject the goods.

However, parties to a contract can negotiate terms that deviate from the perfect tender rule. Besides, it does not apply to service contracts or contracts for the sale of real estate. Variations from the perfect tender are also often seen in sales agreements involving custom-built goods where any small discrepancies might not result in rejection of the product.

The Uniform Commercial Code (UCC) allows some exceptions to the perfect tender rule under its 'right to cure' provision and installment contracts, where an installment can be rejected if the non-conformity significantly impairs its value to the buyer, but the whole contract can be cancelled only if the non-conformity cumulatively amounts to a breach of the entire contract.

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