UCC Formation

Question 1

Goods

Answer 1

All tangible chattels, which are movable at the time of identification to the contract for sale.

Question 2

Goods & Services Contract

Answer 2

Predominant Factor Test - Look to actual value of contract.

Gravamen of Injury - Was breach goods or services related.

Because UCC is liberally construed, the Courts are more likely to apply the UCC.

Question 3

Merchant

Answer 3

One who regularly deals in goods of the kind or who holds himself as having special knowledge or skill. Held to higher standard of good faith.

Good Faith Duty - Duty of honesty in fact and reasonable commercial standards of fair dealing.

Question 4

Non-Merchant

Answer 4

Implied obligation of good faith, less than that of a merchant.

Question 5

Uniform Commercial Code

Answer 5

Applies to contracts for sale or transaction of goods.

Question 6

Offer

Answer 6

Any manner sufficient to indicate a contract has been made. The UCC will imply all open terms except quantity.

Missing terms will be supplied by:

1) Course of Performance - conduct within contract
2) Course of Dealing - conduct before contract
3) Usage of Trade - Regular practice in particular market
4) Gap Fillers - reasonable time, reasonable price, etc.

Question 7

Firm Offer

Answer 7

Irrevocable signed written offer by a merchant without consideration for reasonable time or time specified in offer, not longer than 3 months.

Question 8

Acceptance

Answer 8

Any reasonable mode under the circumstances unless specified in offer.

Ambiguous order to buy goods for prompt shipment can be accepted by promise or performance.

Question 9

Non-Conforming Goods

Answer 9

When accompanied by notice that goods are an accommodation they are a counter offer

If shipped without notice, it is an acceptance and breach

Question 10

Additional Term

Answer 10

Acceptance contains term not mentioned in the offer.

If both parties are Merchants, terms will be added, unless:

1) Offer expressly limits
2) Material alteration
3) Objection within reasonable period of time

One or both non-merchants not part of contract unless assented to in writing by offeror.

Question 11

Different Term

Answer 11

Acceptance changes term of original offer.

Majority
If both parties are Merchants, terms will be added, unless:
1) Offer expressly limits
2) Material alteration
3) Objection within reasonable period of time

Minority - 1) Do not come in, offer is master; or 2) conflicting terms are knocked out

One or both non-merchants not part of contract unless assented to in writing by offeror

Question 12

Contract by Conduct

Answer 12

Conduct by both parties that recognizes the existence of a contract is sufficient to establish a contract, even if writings to do not.

Question 13

Consideration

Answer 13

Bargain made in exchange for a legal detriment. Both parties view their promise or performance as the price for the other’s promise or performance.

Modifications do not require consideration, only mutual assent and good faith. Oral modifications are effective unless writing required by contract or statute of frauds.
Non-merchant must separately assent to no-oral-modification clause.

Question 14

Statute of Frauds

Answer 14

Sufficient Memo - Indicates sale of goods, parties, quantity and is signed by party to be charged.

Merchants - Oral contract where one merchant sends written confirmation and the other does not object within 10 days, contract avoids statute of frauds.

Added terms become part of contract unless they are a material alteration.

Exceptions:

1) Partial performance or payment
2) Specially Manufactured for Buyer
3) Admission
4) Estoppel

Question 15

Unconscionabiity

Answer 15

CL supra

Question 16

Parol Evidence Rule

Answer 16

Unless writing is fully integrated to exclude parol evidnce. The UCC liberally construes parol evidence and allows course of dealing, performance or trade usage to explain a contract.

Question 17

Express Warranty

Answer 17

Representation or sample provided by seller, must be a part of the basis for the bargain.

Question 18

Implied Warranty of Merchantability

Answer 18

Fair and average quality, fit for ordinary use, conforming with any statements on the container and passing without objection in the trade.

Question 19

Implied Warranty of Fitness

Answer 19

Warranty for special use arises when seller has reason to know the buyers special purpose or buyer is relying on seller to select goods suitable for special purpose

Question 20

Disclaimer of Warranties

Answer 20

Express Warranty cannot be disclaimed

Implied Warranty of Merchantability can be disclaimed by conspicuous writing and use of term merchantability.

Implied Warranty of Fitness - Conspicuous writing, does not need to use term fitness.

All implied warranties can be disclaimed by language similar to “As Is”

Question 21

Breach of Warranty

Answer 21

Buyer must notify seller in reasonable time of after discovery of breach of warranty.

If buyer fails to inspect and reasonable inspection would have discovered defect, no recovery allowed.

Question 22

Privity

Answer 22

Generally only parties to contract can sue however a 3rd party who is beneficiary or assignee or satisfies statutory requirements to sue.