Next Generation Bar Exam Quiz
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CONTRACTS
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Buyer contracted to buy from Seller 12,000 liters of industrial adhesive, delivered in 12 equal monthly installments on the first business day of each month. Each installment was separately priced and separately invoiced. For 11 months, Seller delivered conforming adhesive. The November 1 installment contained a contaminant that rendered the entire 1,000-liter installment unusable and forced Buyer to shut down a packaging line for one day. Buyer notified Seller on November 2 that it rejected the November installment and canceled the entire contract. Seller's November production was uniformly contaminated and could not be reworked, and Seller had no other November inventory; however, Seller had corrected the manufacturing process and expected December and later installments to conform.
The jurisdiction has adopted UCC § 2-612, which provides:
(1) An 'installment contract' is one which requires or authorizes the delivery of goods in separate lots to be separately accepted.
(2) The buyer may reject any installment which is nonconforming if the nonconformity substantially impairs the value of that installment and cannot be cured; but if the nonconformity does not substantially impair the value of the whole contract, the buyer may not cancel the whole contract.
(3) Whenever nonconformity or default with respect to one or more installments substantially impairs the value of the whole contract, there is a breach of the whole contract.
In Buyer's action against Seller for breach of the entire contract, which of the following is the most likely result?
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