Notes Flashcards
What is the Uniform Commercial Code (UCC) primarily concerned with?
The UCC governs contracts for the sale of goods and commercial transactions.
What are the three types of contracts covered by common law?
- Services
- Goods
- Land
What is required for a contract for the sale of goods?
- Offer
- Acceptance
- Consideration
- Compliance with the UCC
What does Article 2 of the UCC govern?
Transactions in goods.
Define ‘goods’ according to §2-105 of the UCC.
Movable items at the time of identification to the contract for sale, excluding money and investment securities.
What is the distinction between a course of performance and a course of dealing?
- Course of Performance: Sequence of conduct in a specific transaction
- Course of Dealing: Sequence of conduct in previous transactions
What does ‘good faith’ mean under §1-201 of the UCC?
Honesty in fact and adherence to reasonable commercial standards of fair dealing.
What is the predominant purpose test used for?
To determine the nature of hybrid contracts involving goods and services.
True or False: UCC remedies are strictly limited and cannot be liberalized.
False.
What does §1-303 of the UCC discuss?
Course of performance, course of dealing, and usage of trade.
Fill in the blank: The UCC is to be _______ to promote its purposes and policies.
liberally construed
What is the main focus of the course regarding federal law in commercial matters?
Instances of conflicts between federal and state provisions.
What does §2-314 of the UCC address?
Implied warranty of merchantability.
What is the legal significance of the case Brooklyn Bagel Boys, Inc. v. Earthgrains Refrigerated Dough Products, Inc.?
Reinforced that a buyer can seek remedies for non-conforming goods under the UCC.
What is a hybrid contract?
A contract that includes both goods and services.
What is the Gravamen test?
A minority rule used to determine the predominant purpose of a complaint in hybrid contracts.
What does §1-301 of the UCC allow parties to do?
Select the governing law of a state with a reasonable relation to the transaction.
What are the implications of the UCC’s liberal construction?
It allows for flexibility and adaptation to modern commercial practices.
What type of damages are not recoverable under the UCC unless specified?
Consequential or special damages.
What does §1-304 of the UCC require from parties in a contract?
An obligation of good faith in performance and enforcement.
What does ‘usage of trade’ refer to?
Practices or methods of dealing that justify expectations in commercial transactions.
What is the purpose of the Official Comments on the UCC?
To explain the drafters’ intentions and provide guidance on interpreting provisions.
In Wallace v. Tri-State Assembly, LLC, what was the core issue?
Breach of contract for failure to deliver and assemble goods as agreed.
True or False: Money, including cryptocurrency, is considered a good under the UCC.
False.
What was the outcome of the trial court’s decision in the case involving Tri-State Assembly?
The trial court’s decision was reversed, holding Tri-State Assembly liable for breach of contract and warranty.
Wallace was awarded monetary damages for incomplete assembly and defective goods.
Under which code did the court rule that the goods supplied by Tri-State Assembly did not conform?
Uniform Commercial Code (UCC)
This ruling emphasized that a seller’s failure to deliver conforming goods can lead to a breach of contract.
In the case of Audio Visual Artistry v. Tanzer, what was the main issue regarding the contract?
Whether Tanzer was obligated to pay the full contract price despite failing to make payments.
The enforceability of the contract was also questioned.
What are the requirements for a contract to be enforceable?
- Mutual assent
- Consideration
- Lawful subject matter
Referenced case: Daugherty v. Heritage Enterprises, Inc.
What did the court rule regarding Tanzer’s obligation to pay Audio Visual Artistry?
The court ruled that Tanzer was required to pay the full contract price.
This was due to the absence of a valid defense against the contract’s enforcement.
What was a key legal principle established in the case of Simulados Software, Ltd. v. Photon Infotech?
A breach of contract occurs when a party fails to perform as agreed under the terms of the contract.
This case also involved claims of fraud and negligence.
What is the economic loss doctrine?
It bars recovery of tort damages for purely economic losses in contractual disputes unless an independent duty is breached.
This principle was applied in the case of Simulados Software, Ltd. v. Photon Infotech.
What was the outcome of the case Anthony Pools v. Sheehan?
The Maryland Court of Appeals ruled in favor of Anthony Pools, requiring Sheehan to pay the remaining balance due under the contract.
The court emphasized that payment cannot be withheld unless the performance is substantially deficient.
Under what conditions can a party withhold payment in a contract?
A party can only withhold payment if the other party’s performance is substantially deficient, not merely imperfect.
This principle was highlighted in the case of Anthony Pools v. Sheehan.
What was the main issue in the case of Frix v. Integrity Medical Systems, Inc.?
Whether Integrity Medical Systems qualified as a ‘merchant’ under the UCC and breached the implied warranty of merchantability.
The court found that the medical imaging equipment was defective.
What is the definition of a merchant under UCC §2-104(1)?
A merchant is one who regularly deals in goods of the kind or holds themselves out as having specialized knowledge related to the goods involved in the transaction.
This definition was crucial in the case of Frix v. Integrity Medical Systems.
What does the CISG govern?
- Contract formation
- Rights and duties of parties in international sales of goods
The CISG excludes products liability issues and matters of contract validity.
What must parties do to exclude the application of the CISG?
Parties can exclude the CISG by agreement and apply their chosen law instead.
This is mentioned in CISG Article 6.
What types of goods does the CISG exclude under Article 2(a)?
Items bought for personal, family, or household use.
This exclusion is relevant when determining whether the CISG applies to a transaction.
What is the predominant purpose test used by courts?
It determines whether the contract’s primary purpose is the sale of goods or the provision of services.
This test helps differentiate between transactions in goods versus services.
What does Article 2 of the UCC govern?
Transactions involving the sale of goods between parties.
Which case is most likely governed by Article 2?
Van Dyne Apps sold Gately Construction a standard software package, identical to the package sold to many businesses.
Does Article 2 apply to a contract for leasing a car, with an option to purchase?
No. The transaction is governed by UCC Article 2A, Leases.
Does Article 2 apply to a contract to design and build a custom wheelchair?
Yes, because the wheelchair is a specially made good.
What law governs a contract between an American purchaser and a Canadian seller for the sale of a security system?
UCC Article 2, because the parties have chosen it, per CISG Article 6.
What are the benefits of UCC Article 2 compared to common law?
UCC Article 2 provides:
* Implied warranties
* More flexible contract formation rules
* The perfect tender rule.
Is eBay liable in the case of a fraudulent sale of a painting?
No, eBay is not liable, as it is not the seller of the goods.
What does UCC s.2-201 state about the necessity of writing in contracts?
If there is no writing, proving the existence of a contract can be challenging.
What is the only necessary term for a sufficient memorandum under s.2-201?
Quantity.
What does s.2-202 (The parol evidence rule) state?
A written agreement cannot be contradicted by evidence of a prior agreement/oral agreement.
In the case of Ellig v. Molina, did the Dear Brother letter satisfy the statute of frauds?
Yes, it confirmed the existence of the oral agreement.
What are the exceptions to the statute of frauds under New Jersey law?
Exceptions include:
* Merchants Exception
* Specially Manufactured Goods Exception.
What was the ruling in Becton, Dickinson & Co v. BioMedomics, Inc?
No enforceable written contract was found under New Jersey law for the sale of the Export Product.
Does a printed name in an email constitute an ‘electronic signature’ under California’s UETA?
No, it does not meet the UETA definition of an electronic signature.
What does UCC § 2-202 allow regarding extrinsic evidence?
Extrinsic evidence may be used to explain or supplement a written agreement.
What did the Fourth Circuit hold in Columbia Nitrogen Corp v. Royster Co.?
Evidence of trade usage and course of dealing should have been admitted.
What is the significance of UCC s.2-204 in contract formation?
A contract for the sale of goods may be made in any manner sufficient to show agreement.
What does UCC s.2-205 state about firm offers?
An offer by a merchant to sell goods, signed in writing, is irrevocable for the time stated.
What is the ‘battle of the forms’ rule under UCC s.2-207?
Acceptance with additional terms can form a contract unless acceptance is conditional on the offeror’s agreement.
What is the significance of beginning performance in contract acceptance?
Beginning performance is a valid form of acceptance
Shipment can also serve as a valid method of acceptance.
What does U.C.C. §2-207 state about offer and acceptance?
Acceptance with additional terms is allowed if acceptance is definite and timely
Acceptance can include terms different from or additional to the offer unless expressly conditional.
Under what conditions do additional terms become part of a contract?
Additional terms become part of the contract unless:
* Offer expressly limits acceptance to its terms
* They materially alter the contract
* The offeror objects within a reasonable time
What is the knockout rule in contract law?
The knockout rule removes conflicting terms and substitutes default UCC provisions
This can apply in cases where acceptance includes additional or differing terms.
What is the ‘good guy’ provision mentioned in U.C.C. §2-206(b)?
‘Good guy’ provision allows acceptance by performance without a mirror image requirement
This provision emphasizes the offeror’s control over the offer.
What was the outcome of Diamond Fruit Growers, Inc. v. Krack Corp. regarding Metal-Matic’s disclaimer?
Metal-Matic’s disclaimer of liability did not become part of the contract
The court found that Krack’s conduct did not amount to specific assent.
What is required for assent to additional terms under U.C.C. §2-207?
Assent requires clear, unequivocal acceptance
Continued performance is insufficient to demonstrate assent.
In Bayway Refining Co. v. Oxygenated Marketing and Trading A.G., what was the main issue regarding the Tax Clause?
Whether the Tax Clause materially altered the contract under N.Y. U.C.C. §2-207(2)(b)
The court ruled that it did not materially alter the contract.
What defines a material alteration in a contract?
A material alteration results in surprise or hardship without the other party’s express awareness
Subjective surprise is based on the party’s perspective, while objective surprise considers industry norms.
What does U.C.C. §2-207 state about conflicting jurisdiction and governing law clauses?
Conflicting clauses are typically nullified under the ‘knockout rule’
The U.C.C. provisions apply instead.
In Klocek v. Gateway, Inc., why was the arbitration clause not enforceable?
The arbitration clause was not part of the sales contract due to lack of express agreement
Gateway’s standard terms were not adequately communicated to Klocek.
What are warranties according to the U.C.C.?
Warranties are promises regarding the quality and title of goods
There are general warranties defined under U.C.C. §2-312 to §2-315.
What is the difference between procedural and substantive unconscionability?
Procedural unconscionability involves unfair bargaining power; substantive unconscionability involves unfair contract terms
Both types must be proven for a contract to be voided.
What is the purpose of disclaiming warranties?
To limit the seller’s liability for breach of warranty
Disclaiming may affect buyer perceptions of the seller’s reputation.
What is the U.C.C. §2-315 warranty of fitness?
It protects buyers from sellers benefitting from sales without being merchants
This warranty applies even if the seller is not a merchant.
What is the time frame for contracting the sale of an animal to be born?
The animal must be due to be born within 12 months
This relates to contracts for purchase at the point of conception.
What does U.C.C. §2-507 state regarding performance of a contract?
It applies when parties intend a contemporaneous swap
If otherwise agreed, provisions may not apply.
