Sales of Goods Flashcards
Uniform Commercial Code = ?
What does UCC cover?
In nearly all states, the common law has been replaced by the Uniform Commercial Code (statute) in matters of:
Sales of Goods (moveable personal property)
Transactions involving Software (e.g., licensing)
UCC covers sales/purchases of goods by average joes and by merchants:
Merchant = person who deals in goods of the kind in the K, or otherwise by occupation, holds himself out as having special knowledge or skill regarding the goods involved.
But, UCC treats merchants & non-merchants differently due to levels of sophistication.
Battle of the Forms
What if terms conflict
How to avoid conflict
Most sales are done through purchase orders and invoices, which often contain a party’s standard boilerplate terms (e.g., arbitration, damages available, etc.).
What if the terms conflict? Is there a K?
Under common law, no. Mirror Image rule says offer and acceptance must match.
But, UCC eliminates mirror image rule, in case of sale of goods contracts. Under UCC, K for sale of goods is reached and enforceable upon definite and timely acceptance, even if acceptance contains additional or different terms, provided there is intent to conclude a deal.
To avoid entering K without your new terms, offeree’s acceptance form should state “Acceptance is expressly made conditional on assent to the additional or different terms.”
Warranties = ?
What are the 3 types?
Warranty: An express or implied representation that goods sold have certain qualities or would perform in certain way.
May be found even if seller never uses term warranty. Be careful about your advertising, including statements made by marketing and sales team.
UCC provides for 3 types of warranties:
Express Warranty
Implied Warranty of Merchantability
Implied Warranty of Fitness for Particular Purpose
Implied Warranty of Fitness for Particular Purpose = ?
Implied only if: ?
Hint 4
• Guarantees that goods are fit for particular purpose beyond ordinary purpose for which seller recommended them.
• Applies to merchants & non-merchants
• Implied only if: *purchase/sale in retail as example
1 Buyer had particular purpose.
2 Seller knew or had reason to know Buyers purpose.
3 Buyer relied on seller’s expertise
4 Seller knew or had reason to know of Buyer’s reliance.
Implied Warranty of Merchantability
Applies when?
• Guarantees that goods are reasonably fit for the general purpose for which they are sold, and that they’re properly packaged & labeled.
• Do the goods do what a reasonable person in buyer’s position would expect them to do.
Applies to all goods sold by merchants in ordinary course of business, regardless of any other statements made or samples
