Chapter15slides

8/7/2019 Chapter15slides

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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

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