Article 2 - Sale of Goods Flashcards
I. K FOR SERVICES OR SALE OF GOODS? CL or UCC transaction?
A. predominant purpose test: look at overall K as a whole, whether sale of goods or services predominate
Statute of Frauds
II. STATUTE OF FRAUDS?
A. when sale of goods of $500 or more AND someone is saying there is no K
B. 2-201 requirements?
- writing sufficient to indicate K for sale
- quantity
- signed by party against whom enforcement is sought
Exceptions to the Statute of Frauds
C. EXCEPTIONS? (if you only see one exception, only talk about it in your rule statement)
- Merchant Confirmation Memo
- Estoppel of Assertion of SoF Defense
- Part Performance
- Specially Manufactured Goods
- Judicial Admission
Merchant Confirmation Memo
- merchant confirmation memo
a) merchant: by his occupation has knowledge or skill with regard to the goods or practices
(1) narrow definition: person who deals in goods of that kind (for IWM)
b) elements:
(1) k between merchants
(2) party seeking enforcement sent confirmation of sale to other party
(3) confirmation was received within a reasonable time
(4) is sufficient against the sender and
(5) written objection is not given within 10 days after MCM is received
c) not conclusive as to terms of K, just proves existence of K
Estoppel to Assert SoF
- estoppel to assert SoF ∆se: party lost more than their expected benefit under the K &
a) competent proof of the existence of the oral K
b) party invoking estoppel has suffered a definte, substantial, detrimental change of position in reliance on the K
c) no remedy except enforcement of bargain is adequate to restore his former position
Specially Manufactured Goods
- specially manufactured goods: goods not suitable for sale to others and
a) circumstances reasonably indicate that the goods are for the buyer and
b) seller had substantially begun the process of manufacturing prior to the buyer’s repudiation
Part Performance
- part performance: need acceptance on both sides:
a) if buyer arguing there’s a K, buyer must have paid and seller accepted payment
b) if seller arguing there’s a K, seller has to have delivered goods and buyer accepted them
Parol Evidence
III. PAROL EVIDENCE ISSUE?
A. when someone tries to add to K
B. agreed to prior to or at the same time as the writing (agreements after are K modification issues) parol evidence is what did we originally agree to
C. partially integrated v. completely integrated:
- partially integrated: writing sets forth some but not all of the terms of the K
a) this is the presumption under UCC, rebutted by merger clause
b) can’t contradict terms of writing but can ADD consistent terms, COD, COP, UOT
(1) COP: prior behavior of the parties themselves,
(2) COD: behavior of the parties themselves in this particular K
(3) UOT: industry standards, rules & practices→ how industry behaves
- completely integrated: writing sets forth all the terms, is a final expression of everything agreed to
a) can’t contradict OR add terms to K, can prove something else other than term of K
D. Consistent v. Inconsistent Additional Terms
- consistent: can come in when partially integrated writing: may be a term that was just taken for granted, look to overall K price compared to term/add-on
- inconsistent: if additional terms are such that, if agreed on, they would certainly have been included in the document
- contradictory terms: contradict a term the K addresses→ can’t come in
Offer and Acceptance
A. Unless otherwise unambiguously indicated, an offer invites acceptance in any manner and by any medium reasonable in the circumstances
- if you can accept by performance, shipment of non-conforming goods is acceptance & a breach UNLESS accompanied w/ accommodation letter
Merchant Firm Offer
B. Merchant Firm Offer:
1. promise to keep an offer open does not have to be supported by consideration if
a) signed writing by a merchant
b) terms of offer give assurance that it will be held open & is not revocable
2. can’t be for longer than 3 months; irrevocable for time stated or if none then for a reasonable time
C. No Mirror Image Rule: acceptance w/ additional or different terms is only a rejection and counter-offer if the acceptance is expressly conditioned upon the asset to the additional/different terms→ 2-207
2-207 - Battle of the Forms
A. Is there a K formed?
B. If so, what are the resulting terms of that K?
- k between merchants: additional term becomes part of the K unless:
a) offer expressly limits acceptance to its terms
b) additional term materially alters the K or
(1) maybe arbitration term, disclaimer of implied warranties
c) offeror notifies offeree of objection to the term within a reasonable time
2. k not between merchants: additional terms are merely proposals for inclusion in K, need to be assented to by the other side
3. if acceptance expressly conditional, and not consented to, have K based on conduct:
a) terms: those on which the parties agree + UCC gap-fillers (won’t fill in arbitration, disclaimer of warranties)
b) knock-out rule: terms the parties disagree on are knocked out
c) acceptance is only expressly conditional if the party notifies the offeror that they are unwilling to proceed with the transaction unless the additional or different terms are included→ not just a proviso clause in purchase order/acceptance saying its expressly conditional- Mace Industries
Oral K + Written Confirmation: 2-207
- oral K, then written confirmation: 2-207 applies even though only one form:
a) between merchants: terms of confirmation are terms of K unless recipient objects w/I a reas. time or the term materially alters the K
Modification of K - Written Confirmation with Different Term
- modification of K: when there’s written confirmation w/ a different term: is a modification
a) needs no consideration, just has to be obtained in good faith (rest upon a legitimate commercial reason- one outside the control of the party seeking modification) & satisfy the SoF
b) if it doesn’t satisfy the SoF, it operates as a waiver and can be retracted unless the other party has changed his position materially in reliance upon the waiver
SC 2-207 Law
C. SC 2-207 law:
- Columbia Hyundai, Inc. v. Carll Hyundai Inc.: 2-207 doesn’t actually apply where parties fully negotiated each term of the K- applies only in cases where standard forms are exchanged w/ inconsistent boiler plate provisions
- Weisz Graphic: 12 mo. release term is not a material alteration based on prior course of dealing & trade usage→ was an implied term based on prior course of dealings and trade usage that becomes a term of the K if it doesn’t materially alter or isn’t objected to
Unconscionable Terms
D. Unconscionable terms are unenforceable:
- unconscionable if:
a) absence of meaningful choice AND
b) terms that are so oppressive that no reas. person would make them and no fair and honest person would accept them - mandatory arbitration clause in a sales K bw car dealer & customer was unconscionable and unenforceable bc it precluded buyer from recovering damages mandated for violation of consumer protection statutes
Creation of Express Warranty
A. Express Warranty
- Creation:
a) elements
(1) an affirmation of fact, sample, model or description of the goods
(2) related to the goods AND
(3) becomes part of the basis of the bargain
b) argue its mere puffing/sales talk, opinion
c) affirmations of fact on labels or containers create express warranties in SC
d) post-sale warranties: are modifications of the original K: must be in GF & in writing to satisfy SoF→ can add a binding term to the agreement
e) if prior oral representations do not contradict the writing, and the parties did not intend the writing to be completely integrated, the buyer should be able to introduce evidence of the oral representation to establish an express warranty (even though written K doesn’t have W or has merger clause)
Disclaimer of Express Warranty
- Disclaimer of Express Warranties: can’t be disclaimed in SC! words disclaiming are inoperative
a) under Magnuson-Moss, if there is a written express warranty, can’t disclaim implied w’s
Implied Warranty of Merchantability
B. Implied Warranty of Merchantability
- Creation: only by merchant in goods of the kind sold (narrow definition)
a) implied by law: goods must be:
(1) fit for their ordinary purpose
(2) pass without objection in the trade under the K description
b) goods must be properly packaged and contained
Disclaimer of Implied Warranty of Merchantability
- Disclaimer: must be specific and not create ambiguity in K, which will be resolved against seller
a) must mention term “merchantability” AND if its in writing it must be conspicuous
b) alternative method of disclaiming IWM & IWFPP:
(1) by specific language which in common understanding calls the buyer’s attention to the exclusion of w’s and makes it plain there is no implied warranty
(2) presale inspection of goods or refusal to inspect
(3) COD, COP, and between merchants UOT may establish disclaimer
(4) if buyer gives precise & complete specifications to a seller
c) post-sale disclaimer of implied warranties: ineffective in SC! can’t disclaim IW’s after the parties have concluded sale agreement, CAN create express warranties after sale → Goldkist
Implied Warranty of Fitness for a Particular Purpose
C. Implied Warranty of Fitness for a Particular Purpose:
- Creation: by merchant or non-merchant that at the time of K has reason to know:
a) the particular purpose for which the goods are required
b) that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods
c) buyer must in fact rely upon seller’s skill or judgment
Disclaimer of IWFPP
- Disclaimer: must be specific and not create ambiguity in K, which will be resolved against seller
a) must be in writing and conspicuous
b) alternative method above
c) no post-sale disclaimer
Buyer’s Remedies - Rejection
- Rejection: perfect tender rule: buyer can reject a tender of goods if the tender fails in any respect to conform to the K including when goods fail to meet warranted standard
Rejection of an Installment Contract
a) installment K’s: non-conformity must substantially impair the value of installment
(1) if S gives adequate assurance of cure, B must accept installment
(2) can cancel entire K only if nonconformity w/ 1 or more installments subst. impairs value of whole K→ must give notice to seller of cancellation
Seller’s Right to Cure
b) subject to seller’s right to cure: seller must seasonably notify buyer of his intent to cure
(1) before performance is due: unqualified right to cure
(2) after performance is due: cure if seller reasonably believed goods would be suitable with our without money allowance→ gets further reasonable time
