Also known as: installment contract · instalment contract · instalment contracts · installment sale · installment sales contract
Written by attorneys · grounded in primary & secondary sources — see below
A contract for the sale of goods that requires or authorizes delivery in separate lots to be separately accepted.
Ideal Solutions contracted to sell Ilana Isaacs custom circuit boards in four monthly installments. The third installment arrived with boards that failed conductivity tests. Ilana inspected the boards and rejected only that installment because the defect substantially impaired its value and could not be cured within the contract time. She accepted the remaining installments after Ideal Solutions assured future conformity.
Iris Energy agreed to supply Innovate Pharmaceuticals with specialized chemical batches in six quarterly installments. A raw-material shortage forced Iris to notify Innovate of a reduced allocation for the fourth and fifth installments. Innovate responded in writing that the shortfall substantially impaired the value of the whole contract and terminated the remaining obligations.
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Interlink Communications sold Imani Idowu networking hardware under an installment contract calling for twelve monthly deliveries. After the fourth lot arrived with a substantial defect that could not be cured, Imani rejected that installment only. Interlink later sought to reclaim accepted goods, but the court limited recovery to the value of the rejected installment alone.
Isaiah Ishikawa entered an installment contract to purchase new office equipment in four separate lots. The second delivery contained nonconforming items whose value was substantially impaired. Ishikawa rejected only that installment and accepted the remaining lots after the seller cured the defect.
In a single-delivery contract any nonconformity permits the buyer to reject the whole. In an installment contract the buyer may reject an installment only when the nonconformity substantially impairs the value of that installment and cannot be cured, or may cancel the entire contract only when the nonconformity substantially impairs the value of the whole contract.
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The buyer must give written notification to the seller. If the prospective deficiency substantially impairs the value of the whole contract, the buyer may terminate the unexecuted portion or agree to accept the seller's available quota.
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When the buyer fails to pay an installment due or repudiates with respect to an installment contract, the seller may withhold delivery of goods still in its possession and stop delivery of goods already in transit to a bailee.
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…consumers overestimated lawyers' fees by 91% for the drawing of a simple will, 340% for reading and advising on a 2-page installment sales contract, and 123% for 30 minutes of consultation). See also F. Marks, R. Hallauer, & R. Clifton, The Shreveport Plan: An Experiment in the Delivery of Legal Services 50-52 (1974). [^maj-23]: The…