UCC Sales Contracts

Question 1

Battle of the Forms

Answer 1

Happens when two parties exchange multiple documents in the process of negotiating a transaction. Naturally, one party’s document (or documents) will have different terms than the other’s.

Question 2

Under Battle of the forms ask yourself two questions:

Answer 2

1. Was there a definite and seasonable expression of acceptance?
2. If yes, what are the terms of the contract?

Question 3

Additional Terms

Answer 3

Additional terms or merchant memo confirming oral contract become PART OF THE PARTY’S AGREEEMENT

Question 4

Exceptions to Additional Terms

Answer 4

O CAN

Offeror objects to additional terms within a reasonable time

Conditioned the acceptance exclusively to those terms contained in the offer

Additional terms MATERIALLY ALTER (Surprise or hardship)

Non-merchants

Question 5

Materially Alter

Answer 5

Would cause “surprise or hardship” if the offeror was not made of its existence

Terms that do not alter:

1. Sales tax
2. Standard credit terms by seller
3. Charging interest on overdue invoices
4. Restricting buyers right to reject

Question 6

Different Terms

Answer 6

Different terms create a contract

Different conflicting terms = KNOCK OUT and use terms of article II

NOT PDQ (price, delivery, quantity, or quality), unless other party accepts then conduct = contract

Question 7

Tender

Answer 7

Requires that a seller place and hold conforming goods and give the buyer any necessary notification of its readiness to perform the contract to enable the buyer to take delivery.

Question 8

Perfect Tender Rule

Answer 8

If the goods or the tender of the delivery fail to conform to the contract then the buyer may reject the goods and upon a proper rejection the buyer may terminate the contract and may sue the seller for breach of contract

Question 9

PTR Limitations (4):

Answer 9

I COP

Installment contracts = divisible contracts

Commercially impractical (delay in timely delivery by event not considered, Hurricane)

Seller in good faith sends non conforming goods objectively and reasonably believe the goods would be accepted by the buyer with or without an adjustment

Seller not in breach if cures non conforming prior to the date of performance

Question 10

Seller’s Remedies

Answer 10

SPARKLE

STOPPING goods in transit

Suing for the entire contract PRICE (buyer accepts but no $, ROL on buyer, and buyer wrongful acceptance)

Demanding ASSURANCES of performance (reasonable doubt of untimely perf.)

RE-SELLING to another buyer and sue for resulting damages, must be good faith and reasonable

KEEPING part of a breaching buyer’s deposit (less than $500)

Suing for LOST profit, difference between contract price and the resale price fails to put the seller in as good a position

Right to reclaim goods against an insolvent buyer (demand return w/n 10 days)

Question 11

Buyer’s Remedies

Answer 11

CIDS WAR

COVER, purchase similar goods in substitution for those goods due under the contract and sue for difference

INCIDENTAL (reasonable effort to avoid loss) & Consequential ( Lost profits on collateral business relationships)
- Must show causation, damages, reasonably certain

DAMAGES for lost bargain, or for price paid (doesn’t cover)

SPECIFIC performance (unique goods)

WARRANTIES

• Merchantability
• Particular purpose
• Encumbrances
• Express warranties (NY: plead and prove reliance)
• Title

ACCEPTANCE of revocation, accepted w/o known of latent defect, later revoke w/n a reasonable time

REJECTING and non-conforming goods (reject, accept and sue, latent defect revocation)