Sales and Leases Outline (First Edition)

Sales and Leases | 256

(1) set forth remedies instead of or in addition to those articulated in Article 2 or (2) limit or alter the measure of damages that a party could otherwise recover under Article 2. For instance, the agreement may limit the buyer’s remedies to return of the goods and refund of the purchase price, or to repairing or replacing any nonconforming (defective) goods or parts within a specified time frame. Indeed, the agreement may even preclude the buyer from revoking acceptance of goods, or it may limit or exclude incidental and consequential damages. [U.C.C. § 2-719(1)(a) (1951); 2 Hawkland UCC Series § 2-719:1, Westlaw (database updated June 2021).] 1. Limitation or Modification of Remedies v. Disclaimer of Liability It is crucial not to confuse (1) a limitation or modification of remedies in the agreement with (2) a disclaimer of contractual obligations, for instance, a warranty disclaimer. The former assumes that contractual obligations have been breached and limits or articulates the resulting remedies. The latter limits a party’s contractual duties and, thus, bears directly on whether a breach has occurred in the first instance. [2 Hawkland UCC Series § 2-719:1, Westlaw (database updated June 2021).] 2. Limitation or Modification of Remedies in the Agreement and Law Outside Article 2 Unlike warranty disclaimers, Article 2 imposes no particular presentation requirements for a limitation or modification of remedy in the agreement to be effective, such as conspicuousness. However, law outside Article 2 may impose requirements like these, or it may even render the limitation or modification unenforceable. For instance, a contractual limitation on liability for misrepresentation or tortious conduct may be unenforceable under law outside Article 2. Further, even within Article 2, presentation may bear upon whether a limitation or modification is unconscionable, as when the agreement purports to limit or exclude consequential damages. For example, if the limitation or modification is too inconspicuous, this fact may contribute to a finding of unconscionability. [2 Hawkland UCC Series § 2-719:1, Westlaw (database updated June 2021); Limiting or Excluding Consequential Damages, infra .] 3. General Rule That Resort to a Limited, Modified, or Alternative Remedy in the Agreement Is Optional Typically, if the agreement contemplates a limited, modified, or alternative remedy, resort to that remedy is optional. The agreement may, however, expressly (not just implicitly) provide that the limited, modified, or alternative remedy is exclusive. In this case, the limited, modified, or alternative remedy is the sole remedy. [U.C.C. § 2-716(1)(b) (1951).] 4. Exclusive or Limited Remedy That Fails of Its Essential Purpose Sometimes, if the agreement provides for an exclusive or limited remedy, that remedy will fail of its essential purpose due to the circumstances. An exclusive or limited remedy may fail of

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