CHAPTER 12 Sales Contracts 3/31/2017 CHAPTER 12 Sales Contracts 12-1 Sales 12-2 Special Rules for Sales Contracts

Chapter 12 3/31/2017 12-1 Sales GOALS Define sale and explain how the UCC governs the sale of goods Explain how the UCC treats unconscionable contracts and contracts of adhesion Chapter 12

What is a sale? A sale is a contract in which ownership of goods transfers immediately from the seller to the buyer for a price. Ownership – a collection of rights that allows the use and enjoyment of property Price – consideration, money, services or other goods (barter) Chapter 12

Sales Contract Information Payment and delivery information Bill of sale – receipt, it is written evidence of the transfer of ownership Use of credit cards – buyer gets title and possession before he pays for it. Wow! Acceptance of goods – buyer has agreed either by words or conduct that the goods are received in satisfactory condition. Chapter 12

What are and are not Goods Tangible which means touchable Moveable personal property What is not goods? Money Intangible Patents and copyrights Land, and other forms of real property Chapter 12

Other forms of Sales Contracts Fax Mailing an acceptance US Mail Email Just ship the goods, if the buyer accepts you have a contract Wow Chapter 12

Legal parties to a sale Vendor- seller Vendee – the buyer Definitions we need to know Payment occurs when the buyer transfers the money and the seller accepts it. Delivery – place subject matter of sale in possession of buyer Chapter 12

What is the definition of a bill of sale? A B of S is the receipt that serves as written evidence of the transfer of ownership of goods. Chapter 12

UNCONSCIONABLE SALES CONTRACTS What are they? Offends an honest person’s conscience and sense of justice –What can the courts do? Courts may refuse to enforce Enforce without unconscionable clause Limit the clause Contracts of adhesion – one of the parties dictates all the important terms, the weaker accepts meekly. Chapter 12

12-2 Special Rules for Sales Contracts GOALS Compare the status of a casual seller with a merchant Explain how the Statute of Frauds is applied to sales Chapter 12

FOCUS How do you distinguish between a merchant and a casual seller? In life, if you do not qualify as a business merchant, you are then known as a casual seller. Chapter 12

SPECIAL RULES FOR MERCHANTS Merchant status in sales contracts If you change a contract in business law, the contract become void and unenforceable. If you change a sales contract between merchants, most of the time the contract remains enforceable and the new changes are called proposal for addition to the contract. The merchant has a reasonable time to object to the changes…..if he doesn’t it becomes enforceable unless it is a material change. Chapter 12

How do merchants differ from casual buyers in a sales situation? And the answer is different rules Chapter 12

HOW DOES THE STATUTE OF FRAUDS APPLY TO SALES….it governs them. Exceptions to the Statute of Frauds for sales contracts (when oral contracts over $500 become enforceable. Goods received and accepted by the buyer Buyer pays for goods and seller accepts payment Goods specially made not suitable for sale to others if seller starts manufacturing Party against whom enforcement sought admits oral contract made Chapter 12