Contracts - UCC Article 2 - Application & Formation

Question 1

What is the result of a shipment of a nonconforming goods delivery?

Answer 1

1. Acceptance and automatic breach;

2. Not an acceptance if shipper notifies that shipment is only an accommodation.

Question 2

What happens to additional terms in acceptance-non-merchants?

Answer 2

Additional terms do not become part of the contract - original offer terms control.

Question 3

What is the Uniform Commercial Code (UCC) supplied term (i.e., assumed term) if a contract term has an open payment term?

Answer 3

Payment is due at time and place buyer is to receive the goods.

Question 4

Define “merchant.”

Answer 4

A person who deals in goods of the kind being sold, or a person who by occupation holds himself or herself out as having knowledge or skill.

Question 5

Is consideration required for the modification of a contract?

Answer 5

No consideration required; good faith is required.

Question 6

What is the Uniform Commercial Code (UCC) supplied term (i.e., assumed term) if a contract term has an open time for contracted performance?

Answer 6

In absence of agreement, it is a reasonable time.

Question 7

What happens to additional terms in acceptance-merchants?

Answer 7

Additional terms become part of the contract unless they are material, the offer is limited, or the party objects.

Question 8

What is the Uniform Commercial Code (UCC) supplied term (i.e., assumed term) if a contract term has an open price term?

Answer 8

A reasonable or market price at the time of delivery will apply or if price is to be fixed by either party good faith is required in doing so.

Question 9

List the three methods by which a seller can accept a buyer’s shipment order.

Answer 9

1. Delivery of conforming goods to carrier;
2. A prompt promise to ship; or
3. Shipment of nonconforming goods delivery without notice of accommodation.

Question 10

In what special circumstances will an offeree’s additional terms not be valid when both parties in the transaction are merchants?

Answer 10

1. The offeror limits acceptance to his or her terms;
2. The additional terms materially alter the contract;
3. The offeror specifically with notice objects to the additional terms.

Question 11

Describe the elements of a merchant’s firm offer.

Answer 11

1. Offer by a merchant;
2. States that it will be kept open (max of 3 months);
3. Signed or authenticated by merchant. Irrevocable for time stated or max of 3 months.

Question 12

Define “goods.”

Answer 12

All movable and tangible personal property other than money, investments, securities and things in action.

Question 13

Define “sale of goods.”

Answer 13

1. Passage of title to goods (personal property) from a seller to a buyer for a price.
2. No passage of title required for a bailment.
3. No price required for a gift.

Question 14

What law governs the sale of goods?

Answer 14

Uniform Commercial Code - Article 2.

Question 15

List the requirements for a sale of goods contract.

Answer 15

1. Intent;
2. Object;
3. Quantity.

Question 16

What is the Uniform Commercial Code (UCC) supplied term (i.e., assumed term) if a contract term has an open place of payment term?

Answer 16

Seller’s place of business or if none residence.

Question 17

Describe the concept of a merchant’s battle of the forms.

Answer 17

Formation situation in which boiler plate language in merchant’s individual forms adds terms to the original offer.