Chapter 18 Flashcards
Article 2 (Sales)
an article fo the UCC that governs the sale of goods.
Sale
the passing of title of goods from a seller to a buyer for a price. Article 2 of the UCC applies to transactions in goods.
Goods
tangible things that are movable at the time of their identification to a contract (UCC 2-105). *specially manufactured goods and the unborn young of animals are examples of goods.
Items not considered goods:
- not subject to Article 2. Include:
1) money and intangible items are not tangible goods.
2) real estate is not a tangible good because it is not movable. However, minerals, structures, growing crops, and other things that are severable from real estate may be classified as goods subject to Article 2.
Who is a Merchant?
Article 2 contains several provisions that either apply only to merchants or impose a greater duty on merchants. UCC 2-104 defines a merchant as
1) a person who deals in the goods of the kind involved in the transaction or
2) a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the goods involved in the transaction.
Article 2A (Leases)
an article of the UCC that governs leases.
Definition of lease
transfer of the right to the possession and use of named goods for a set term in return for certain consideration.
*can be anything from an automobile leased to an individual to a complex line of industrial equipment leased to a multinational corporation.
Finance Lease
a three-party transaction consisting of a lessor, a lessee, and a supplier.
*lessor does not select, manufacture, or supply the goods. Instead, the lessor acquires title to the goods or the right to their possession and use in connection with the terms of the lease.
UCC Firm Offer Rule
a merchant who
1) offers to buy, sell, or lease goods and
2) gives a written and signed assurance on a separate form that the offer will be held open cannot revoke the offer for the time stated or, if no time is stated, for a reasonable time.
* the maximum amount of time permitted under this rule is three months.
UCC Additional Terms
in certain circumstances, the UCC permits an acceptance of a sales contract to contain additional terms and still to act as an acceptance rather than a counteroffer.
Written Confirmation Rule
if both parties to an oral sales or lease contract are merchants the SOF writing requirement can be satisfied if
1) one of the parties to an oral agreement sends a written confirmation of the sale or lease within a reasonable time after contracting and
2) the other merchant does not give written notice of an objection to the contract within 10 days after receiving the confirmation.
* this situation is true even though the party receiving the written confirmation has not signed it.
* confirmation must be sufficient and the party to whom it was sent has reason to know its contents.
Parol Evidence Rule
a rule that says that if a written contract is a complete and final statement of the parties’ agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.
