Formation/Interpretation under the UCC Flashcards
Formation under UCC § 2-204
Makes formation easier –> don’t want contract disputes to get in the way of commercial dealing
UCC § 2-204
(1) A contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract
* If the parties act like they have a contract, they have a contract
(2) An agreement sufficient to constitute a contract may be found even though the moment of making it is undefined
3) Even though one or more terms are left open, the contract does not fail for lack of definiteness IF a) the parties intended to make a contract AND b) there is a reasonably certain basis for giving an appropriate remedy
- In a contract for the sale of goods, it is usually pretty easy to fashion a remedy –> price of goods
Offer and Acceptance in the Formation of a Contract
UCC § 2-206
(1) Unless otherwise unambiguously indicated by the language or circumstances:
(a) An offer to make a contract shall be construed as inviting acceptance in any manner reasonable in the circumstances
(b) An order or other offer to buy goods for prompt shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer
(2) Where the beginning of a requested performance is a reasonable mode of acceptance, an offeror who is notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.
UCC § 2-207 IS
- NOT used to _________________.
- IS USED to ___________________.
UCC § 2-207
- is NOT USED to determine whether there was a contract or not
-
IS USED to determine
- what terms the parties agreed to
- “Battle of the Forms”
- Written confirmation of an oral agreement
UCC § 2-207 (1)
UCC- 2-207
(1) A definite and seasonable acceptance acts as an acceptance even though it states terms additional or different from those offered or agreed upon, UNLESS acceptance is expressly made conditional on assent to the additional or different terms.
UCC § 2-207 (2)
(2) The additional terms are to be construed as proposals for addition to the contract.
-
Between merchants, such terms become part of the contract unless:
- The offer expressly limits acceptance to the terms of the offer, OR
- They materially alter it, OR
- Notification of objection to the terms has already been given or is given within a reasonable time after notice of them is received
- If parties are not merchants, the terms become part of the contract if the plaintiff expressly agreed to them
UCC § 2-207 (3)
(3) Conduct by both parties that recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.
* In such a case, the terms of the contract consist of those terms on which the writings of the parties agree.
What is the Mirror Image Rule under the UCC?
Under UCC, there is no such thing as the Mirror Image Rule
- Whereas common law sees new/different terms as a counter offer, UCC will construe acceptance with new/different terms as acceptance, unless the acceptance is conditional on the new terms
Under UCC § 2-207
In order to show that acceptance was conditional on new terms, the offeror _____________.
In order to show that acceptance was conditional on new terms, the offeror must show it was unwilling to go forward with transaction without terms.
Under UCC § 2-207
Material alteration = __________.
Material alteration = unreasonable surprise/hardship
- Parties can accept a material alteration in one of two ways: (1) expressly or (2) by silence
- Note: Silence only works if there is a prior course of dealing that indicates that silence will be reasonably understood as acceptance.
UCC § 2-207 has two major changes
from the common-law approach:
This has two major changes from the common-law approach:
- It provides that a document can constitute an acceptance “even though it states terms additional to or different from those offered or agreed upon,” thus abolishing the common-law “mirror image” rule; AND
- It provides that between merchants, the additional terms proposed in the acceptance can become part of the contract in certain circumstances if the other party (the offeror) merely remains silent.
- §2-207(2) thus effectively modifies the common-law rule that a proposal for a contract cannot be accepted by silence
Who is a merchant?
“Merchant” is defined in §2-104(a) to mean
“a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.”
If both parties to the transaction are merchants, the additional term automatically becomes a part of the contract as a general rule.
3 Exceptions to this:
If one of three exceptions is triggered does the addition fail to become part of the contract.
- the offer expressly limits the acceptance to the terms of the offer;
- they materially alter it; OR
- notification of objection to them has already been given [by the offeror] or is given within a reasonable time after notice of them is received.
Under 2-207, who is the offeree?
Under 2-207, the general rule is that the VENDOR is the offeree
- Just makes sense
- Buyer makes the offer…to buy
When does 2-207(3) apply?
This applies in limited circumstances…when the contract itself precludes a contract from the writing
- If one writing is a rejection of the offer, but that party still performs, OR
- When the offeror expressly limits power of acceptance to the offer (you may only accept my offer on these terms)
- this means without the terms, it is not acceptance…but if the parties still perform, we use 2-207
