Universes: CL/UCC Flashcards
What are the 2 “universes” of law that govern contracts
- Article 2 of UCC - sale of goods (all things movable)
2. Common Law - everything else
What is a merchant?
Someone who regularly deals in goods of the kind sold OR someone who has special knowledge or skills as to the practices or goods involved
NOTE: MUST be acting in their mercantile capacity in order for mercantile rules to apply (ex: shoe merchant who is selling a lamp at a garage sale is NOT a merchant regarding the lamp)
What are key differences b/w CL and UCC
- Terms of an offer
- How an offer is accepted
- Terms of acceptance
- Contract modification
- Performance Rules
What terms are required in a valid offer?
CL: all essential terms (parties, subject, quantity, price)
UCC: parties, subject, quantity (price not req.)
NOTE: a requirements or output contract will NOT fail for lack of quantity as long as (1) made in good faith and (2) not unreasonable disproportionate to stated estimate or prior comparable output
How is an offer accepted under CL/UCC
CL:
Unilateral contract: full performance
Bilateral contract: a promise to perform OR by beginning performance
UCC: by either promising to ship the goods OR shipping the goods
NOTE: shipping defective goods WITH an accommodation letter constitutes a rejection and counter offer, W/O a letter constitutes breach
What are the terms of acceptance under CL?
Acceptance must mirror the offer “mirror image rule”
How does the UCC handle additional or different terms?
B/W Merchants: the add’l term will be part of the contracts UNLESS (1) it materially alters it, (2) the offeror objects w/i a reasonable time, OR (3) the offeror limits acceptance to the terms of the offer.
NOTE: under the majority rule, a different term is knocked out and replaced w/ gap fillers
When 1 is NOT a merchant: add’l or different terms are proposals to modify and are NOT part of the contract unless the offeror expressly agrees
What law governs acceptance for the sale of goods?
UCC 2-207: Battle of the Forms
No mirror image required.
What is the difference b/w CL and UCC regarding contract modification?
CL: must be supported by consideration otherwise violates the pre-existing duty rule (a promise to do something you are already have a legal duty to do is not consideration)
UCC: no consideration, just requires good faith
What are the different performance rules for CL and UCC?
CL: substantial performance
UCC: perfect tender
What are the requirements for substantial performance under CL?
Performance will be found when a party substantially performs as long as there is not a material breach
What are the requirements for perfect tender under the UCC?
A seller must deliver perfectly conforming goods according to the K; any nonconformity. gives the buyer a right to reject ALL OR a PORTION of the goods. The buyer MUST give the seller a chance to cure the nonconformity IF:
- the time hasn’t expired under the K, OR
- the seller has reasonably grounds to believe that the buyer would accept a replacement for the nonconformity
