Sales Contract Formation Flashcards
UCC 2-204 – Broad Contract Formation Principles
Mutual Assent: Sales contracts can be made in any manner sufficient to show agreement, including conduct
Time of Formation: A contract may still be found to exist even when the moment of formation cannot be pinpointed
Remedy: The only crucial detail is that there is some basis for calculating a remedy for breach
UCC 2-205 – Firm Offers
Lack of Consideration: firm offers without consideration are considered valid if the offeror is a merchant and the offer is in writing
Time: the offer remains for a reasonable time (unless stated); gratuitous offers only irrevocable for up to three months
UCC 2-206 – Acceptance of Offers
Sales Contract Offers: may be accepted in any manner and by any medium reasonable under the circumstances
Shipment of Goods: An offer to purchase goods for immediate shipment can be accepted by promising the goods, or shipping them–even if the shipment contains non-conforming goods (unless offered merely as an accommodation–therefore being considered a counter-offer)
UCC 2-207 – “Battle of the forms”
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states additional or different terms–unless made expressly conditioned on assent to the additional or different terms
(2) Between merchants–additional terms are added to the contract unless
(a) The offer expressly limits acceptance to the terms of the offer
(b) They materially alter the contract
(c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received
(3) Conduct by both parties which 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 case, the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.
UCC 2-201 – Statute of Frauds as applied to the Sale of Goods
Instances where writing is not needed:
Sale of goods less than $500
Requirements when writing is available – UCC 2-201(2):
- A sufficient indication that the contract for sale has been made
- Signature of the party trying to avoid the contract
- A quantity term
Writing Exceptions – UCC 2-201(3):
- When the seller relied to its detriment on the existence of an oral contract in beginning the manufacture of specifically manufactured goods
- When the party seeking to avoid admits in a pleading, testimony, or otherwise in court that a contract for sale was made
additionally, when the parties carry out the contract [course of dealing]
Parol Evidence (UCC 2-202)
Rule: Terms set forth in a writing intended as a final expression of their agreement cannot be contradicted by a prior agreement, or contemporaneous oral agreement, but may be explained and supplemented by . . .
(a) Course of dealing, usage of trade, or course of performance
(b) Evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement
Types of Agreements (Re: Parole Evidence)
Integrated: intended to be a final expression of terms contained
Completely Integrated: intended to be a complete and exclusive statement of the agreement’s terms (as a whole)
Statute of Frauds (2-201) Merchant’s Exception
An unsigned, confirmatory writing setting out the terms of the agreement is sufficient to prove the existence of an agreement if the recipient fails to object in writing, within 10 days
