Contract Law Regarding Sales Transaction

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In contract law concerning sales transaction, a Right to Cover is a remedy that is available to a buyer under Article 2 of the Uniform Commercial Code (UCC), which governs the sales of goods. The UCC states a buyer may use a cover as a protection in an action of a breach in a sales contract. The buyer, in good faith, would purchase substitute goods when the seller violated the contract and fail to deliver the goods the buyer has asked for. The buyer can recover from the seller the difference of the cost of cover and contract price with any additional incidental or consequential damages. In other words, after the seller breaches the contract, the buyer is able to look for reasonable substitute goods. Then the buyer would have the damages recover from the seller. For example Bob, the buyer owns a hair salon. Bob orders 15 boxes of shampoos from John, the seller. John runs a hair supply store. Bob specifically orders the Green Tea scented shampoos. In his order, Bob states that he must have the shampoos by January 21. Bob pays the full contract price of $30 per box (a total of $450) to John. However on January 21, John delivers 15 boxes of peppermint-scented shampoos. The goods are nonconforming because the shampoos are not what Bob has ordered. One option that Bob has is to cover or purchase reasonable replacement goods. Bob then decides to contact another supplier; Susan to order the Green Tea scented Shampoos and having it deliver on the same day. But Susan’s hair supply

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