INTRODUCTION TO SALES

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INTRODUCTION TO SALES
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Law Governing Contracts
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Article 2 of the UCC applies to the sale of goods

• Sale
• Passing of title from a Seller to a Buyer for a
  price
• Goods
• Tangible
• Moveable

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MERCHANT

• Person who deals in goods of the kind involved in
  the transaction.
• Person who by his occupation holds himself out as
  having knowledge or skill.
• Employs someone who is a merchant.

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Principles that are frequently repeated in the
Code

• Good faith
• Fair dealing
• Reasonableness
• Commercial reasonableness

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Commercial reasonableness is determined by

• prior performance by the parties
• trade usage
• facts of a particular case

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OFFER

• U.C.C
• Open Terms Contract may
  be enforced under Sec. 2-204(3) if
• a. parties intend to make a contract
• b. reasonably certain basis for Court to grant
  appropriate remedy

• COMMON LAW
• If terms were missing,
• contract frequently failed
• for indefiniteness

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OFFER

• Quantity missing
• cannot enforce unless it is an output or
  requirements contract under Sec. 2-306

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OFFER

• Price missing
• -Court can determine a reasonable price at time
  of delivery. Sec 2-305(1)
• -If one party is to determine, must be done in
  good faith. Sec. 2-305(2)
• -If that party fails to fix price, the other
  party may treat the contract as cancelled or fix
  the price. Sec. 2-305(3)

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OFFER

• Delivery terms not specified
• -B takes at S's place of business.
• -If none, takes at S's home.
• -No time set, courts can infer a reasonable time.
• Ongoing K - does not specify when contract will
  end
• -either side can terminate, but good faith and
  sound commercial practice require reasonable
  notice.

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OFFER

• No shipping arrangements
• -S can make using good faith and commercial
  reasonableness.
• Assortment of goods omitted
• -B can make selection using good faith and
  commercial reasonableness

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PROMISE TO KEEP OFFER OPEN

• COMMON LAW
• Can revoke anytime, unless consideration is paid,
  creating an OPTION CONTRACT.
• U.C.C.
• Can create a FIRM OFFER without consideration
• -offeror is a merchant
• -in writing
• -open for a specified time or reasonable time,
  but not more than 3 months.

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COUNTEROFFERS

• COMMON LAW-
• Acceptance must mirror the offer.
• A counteroffer rejects and terminates the offer
• U.C.C.
• Additional terms of an acceptance become part of
  the contract if they
• -do not materially alter the terms of the offer
  and
• -the offeror does not object within a reasonable
  time after reviewing the acceptance Sec. 2-207

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ACCEPTANCE

• Sometimes, can accept by shipping or promising to
  ship.
• If ship NONCONFORMING goods
• It is an acceptance, and a contract is formed AND
• It is also a breach of contract, and the injured
  party may sue for damages

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ACCEPTANCE

• BUT, if seller send notice that it is shipping
  nonconforming goods
• It is an ACCOMMODATION
• There has been no acceptance and no contract is
  formed
• COUNTEROFFER

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MODIFICATION

• COMMON LAW
• Consideration is required.
• U.C.C.
• Consideration is not required. Sec. 2-209

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STATUTE OF FRAUDS

• COMMON LAW
• Writing must be signed by the party against whom
  enforcement is sought.

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STATUTE OF FRAUDS

• U.C.C.
• Writing may be enforced against a party who has
  not signed if
• both parties are merchants
• one party sends a written confirmation of their
  oral agreement within a reasonable time after
  contracting, and
• the other party does not give written notice of
  objection within ten days after receiving the
  confirmation. Sec. 2-201

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EXCEPTIONS TO THE STATUTE OF FRAUDS

• Specially manufactured goods, if
• Goods are not suitable for sale in Ss ordinary
  course of business AND
• S has made a substantial beginning of the
  manufacture of goods.
• Admissions in Pleadings in court
• Partial payment or partial acceptance has taken
  place

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AMBIGUOUS LANGUAGE may be explained by looking at

• Course of performance
• Course of dealing
• Usage of trade

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PROBLEM

• Mark is a football player at college. He was
  furnished with a uniform and helmet by the
  school. He was injured while playing football.
  He claimed that the helmet was defective and
  contributed to his injuries.
• He wants to sue the college and the head football
  coach under the U.C.C.
• Does Article 2 apply?