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Chapter15slides

Apr 09, 2018

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Tushar Mehta
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    Chapter 15

    Formation of Sales and Lease andInternet Contracts

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    Uniform Commercial Code

    Promulgated by Commission on Uniform

    State LawsIt is a suggested law

    that has been adopted, at least in

    part, by all statesState law, though similar in all states

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    Uniform Commercial Code

    Covers contracts involving the sale of

    goods. (Article 2)Does not cover contracts for

    Services

    RealProperty

    Why is uniformity important?

    Why more important with goods?

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    Approach to contract cases

    What is the subject matter?

    Goods? If no, look to common law

    If yes, the UCC takes precedence over commonlaw

    Mixed Sales Part goods and part not

    How to decide which applies?

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    MixedSales

    Which is predominant?

    Based on this, entire contract isevaluated the same

    Thus, if mainly goods, the UCC applieseven to the services portion

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    UCC General Philosophies

    Commerce is good

    Easier to form contracts than undercommon law

    Merchants held to a higher standardthan nonmerchants

    Duty of good faith

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    Article 2A: Leases

    When the UCC was promulgated in1949, what could be leased?

    What can be leased today?

    Leases today are often an alternate

    form of purchaseArticle 2A is parallel to Article 2

    Consumer v. finance leases

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    Merchants

    Are held to a higher standard

    One who deals in the goods of thetransaction

    One who holds himself out by hisprofession as having special knowledge

    related to the goods of the transactionOne, not a merchant, who hires a broker

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    OffersOpen terms

    Open terms OK.gap-filling rulesPricereasonablePaymenttime and place buyer gets goods

    Deliverysellers place of business

    Timereasonable

    Assortmentbuyer can chooseQuantityContract usually fails

    No contract if too much is left open

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    Open Quantity terms OK

    Requirements contract

    all we needOutput contract

    All you produce.

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    Acceptance by Seller

    By promising to ship goods

    By shipping goodsConforming Acceptance

    Nonconforming

    Acceptance and breach

    Accommodation Shipment

    Not acceptance, but counteroffer

    Must tell buyer that it is accommodation

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    Acceptance: 2 Meanings

    Acceptance of Offer

    Determines whether a contract is formedAcceptance of Goods

    Assumes that there is a contract, andamounts to whether the buyer believesthey are conforming goods

    Conforming goods are the correct goodsand are not defective

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    Mirror Image Rule

    :Both aremerchants

    The new terms become part of the

    contract unless:Offer limits acceptance to original terms

    Additional term materially alter

    Offeror objects within a reasonable time

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    ContractModifications

    Under the UCC, no new consideration is

    needed.Must be in writing if, as modified, itmeets the writing requirement

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    Statute ofFrauds

    $500 or more

    Written confirmation ruleBoth are merchantsThere was an oral contract

    One confirms this in writing to the other

    Other does not objectWriting requirement is met without thesignature

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    Statute ofFrauds Exceptions

    Specially manufactured Goods

    Admissions ofPleadings in Court

    Part Acceptance (of goods)

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    Parol Evidence Rule

    Evidence of earlier

    agreements/statements excluded ifthere is a written agreement

    Several Exceptions

    Proof of Fraud

    Gap

    Interpretation of Ambiguities

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    Contractsfor International Sale ofGoods

    For international contracts, much like

    UCC.Does not apply to consumer transactions

    Offers can be irrevocable without a writing

    Price (incl. how determined) must be

    specified

    Mirror image rule applies