Chapter 8 Sales, Licensing, and E-Commerce

Question 1

Article 2 of the UCC

Answer 1

Deals with contracts for the sale of goods.

Question 2

Goods

Answer 2

As defined in Article 2 of the Uniform Commercial Code, all things (including specially manufactured goods) that are movable at the time of identification to the contract for sale.

Question 3

Acceptance

Answer 3

may contain terms additional to or different from those in the offer. This is different from the common law mirror image rule

Question 4

Adhesion Contracts

Answer 4

An unfair type of contract by which sellers offer goods or services on a take-it-or-leave-it basis, with no chance for consumers to negotiate for goods except by agreeing to the terms of said contract.

Question 5

Battle of the Forms

Answer 5

A conflict between an offer and acceptance for the purchase of goods. Occurs when the parties negotiate the essential terms of the contract (for example, quantity, quality, and delivery date) but exchange standard preprinted forms that contain conflicting terms instead of executing a single, fully integrated contract.

Question 6

Browse-wrap License

Answer 6

An online license agreement that appears on a website but does not require the user to take any action to express his or her consent to the agreement.

Question 7

Click-wrap license

Answer 7

An online license agreement that presents the user with a notice on his or her computer screen that requires the user to agree to the terms of the license by clicking on an icon.

Question 8

Commercial Impracticability

Answer 8

Provision in Section 2-615 of the Uniform Commercial Code that excuses a failure to perform if performance is made impractical by an event unforeseen by the contract.

Question 9

Consequential Damages

Answer 9

Compensation for losses that occur as a foreseeable result of a breach of contract. Actual damages represent the damage, loss, or injury that flows directly and immediately from the act of the other party; in contrast, consequential damages refer to damage, loss, or injury flowing from some of the consequences or results of such act.

Question 10

Convention on Cybercrime

Answer 10

The first international treaty to address various types of criminal behavior directed against computer systems, networks, or data, including computer-related fraud and forgery.

Question 11

Cover

Answer 11

A buyer’s obligation to buy substitute goods elsewhere after the seller has defaulted.

Question 12

Direct damages

Answer 12

The difference between the market price at the time the buyer or seller learned of the other party’s breach and the contract price for goods.

Question 13

Doctrine of first sale

Answer 13

A U.S. doctrine that states that once the copyright or trademark owner places a copyrighted or trademarked item in the stream of commerce by selling it, the owner has exhausted its exclusive statutory right to control its distribution.

Question 14

Electronically supplied services

Answer 14

The electronic supply of software, music, films, and games, as well as other electronic content, web- hosting, distance maintenance of software and equipment, distance teaching, and the like.

Question 15

Express warranty

Answer 15

An explicit guarantee by the seller that the goods purchased by a buyer will have certain qualities.

Question 16

Firm Offer

Answer 16

Under the Uniform Commercial Code, an offer signed by a merchant that indicates that the offer will be kept open and is not revocable, for lack of consideration, during the time stated, or for
a reasonable period of time if none is stated, but in no event longer than three months.

Question 17

Fixtures

Answer 17

The items of personal property that are attached to real property and that cannot be removed without substantial damage to the item.

Question 18

Full Warranty

Answer 18

The warranty that gives the consumer the right to free repair or replacement of a defective product.

Question 19

Identification to the Contract

Answer 19

Setting aside or otherwise designating the particular goods for sale under a contract.

Question 20

Implied warranty of fitness for a particular purpose

Answer 20

The warranty whereby goods involving the following elements are judged satisfactory for the buyer’s purpose: (1) the buyer must have a particular purpose for the goods; (2) the seller must have known or have had reason to know of that purpose; (3) the seller must have known or had reason to know that the buyer was relying on the seller’s expertise; and (4) the buyer must have relied upon the seller.

Question 21

Implied warranty of merchantability

Answer 21

The warranty by which all goods sold by merchants in the normal course of business must meet following criteria: (l) pass without objection in the trade under the contract description; (2) be fit for the ordinary purposes for which such goods are used; (3) be within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; (4) be adequately contained, packaged, and labeled as the agreement may require; and (5) conform to the
promises or affirmations of fact made on the container or label, if any.

Question 22

Limited warranty

Answer 22

The warranty that limits the remedies available to the consumer for a defective product.

Question 23

Lost volume seller

Answer 23

A seller that can be put in as good a position as performance would have only by permitting the seller to recover the profit (including reasonable overhead) that it would have made from full performance by the buyer.

Question 24

Merchant

Answer 24

As defined in Article 2 of the Uniform Commercial Code, a person who deals in goods of the kind or otherwise by its occupation holds itself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.

Question 25

Mirror Image Rule

Answer 25

A common law contract rule that requires acceptance to contain the exact same terms as the offer.

Question 26

Offer

Answer 26

A proposal to enter into a contract. Proposal may be verbal, written, or implied by action.

Question 27

Perfect Tender Rule

Answer 27

A Uniform Commercial Code rule that gives the buyer an absolute right to reject any goods not meeting all the contract requirements, including time of delivery.

Question 28

Puffing

Answer 28

The expression of opinion by a seller regarding goods; not a warranty.

Question 29

Shrink-wrap license

Answer 29

A license that customers cannot read when they purchase software but are deemed to have accepted when they open the wrapping around the envelope containing the discs.

Question 30

Specific Performance

Answer 30

A court order to a breaching party to complete

the contract as promised.

Question 31

Statute of Frauds

Answer 31

A statute that requires that certain contracts must be in a signed writing to be enforceable in a court. Contracts that must be evidenced by some writing include (1) a contract for the transfer of any interest in real property (such as a deed, lease, or option to buy), (2) a promise to pay the debt of another person, (3) an agreement that by its terms cannot be performed within a year, and (4) a pre- nuptial agreement (that is, an agreement entered into before marriage that sets forth the manner in which the parties’ assets will be distributed and the support to which each party will be entitled in the event of divorce). (5) Contracts for the sale of goods over $500.

Question 32

Tender of delivery

Answer 32

Under Article 2 of the Uniform Commercial Code, when the seller notifies the buyer that it has the goods ready for delivery.

Question 33

Unconscionability

Answer 33

As under common law, unconscionability can be either procedural (relating to the bargaining process) or substantive (relating to the provisions of the contract).