1. UCC Article 2 Chapter 20
Sale of Goods

2. The Uniform Commercial Code
Facilitates commercial transactions.
UCC Article 2: Sale of Goods.
Modifies common law of contracts of some areas.
UCC 2 preempts common law.
Where UCC2 is silent, common law governs.

3. The Scope of Article 2
Does not apply to real estate unless there is a “good” that can be severed by the Seller. If the good is severed by the Buyer, then UCC2 does not apply.
Generally contracts for services are not governed by UCC2.

4. Scope of Article 2 Merchant deals in good of kind, special knowledge.
Article 2 applies to the “sale of goods.”
A “sale” is the passing of title of “goods” to/from a “merchant” (seller or buyer) for a price (money, goods, services,etc).
“Goods” are tangible and movable (not real estate).
What if Goods and Services combined?
A “merchant” has special business expertise and is not a casual buyer/seller.
Merchant deals in good of kind, special knowledge.

5. Contract has both sale and services
Gravamen of the action..
John K’s with Paul’s Windows to put in 50 windows in an old barn. Paul puts the windows in, at each, the sale of each window was $ Later, the windows leak and John sues Paul’s windows. Will this K fall under UCC,Article 2?

6. Scope of Article 2A—Leases
Contract for lease of personal goods between a lessor and a lessee.
Consumer Leases (total payments less than $25,000).
Finance Leases (involves a 3rd party-supplier).

7. Offer: Open Terms
UCC 2-204: even if terms of are undetermined, a contract may still exist.
Open Terms: “Indefiniteness” is OK as long as the parties intended to make a contract and there is a reasonable basis for a court to grant a remedy.
Very different from contract law…definiteness of terms.

8. Offer: Open Terms
Open Price Term: If parties have not agreed on pricing, court can determine “reasonable price at the time of delivery.” UCC2-305.
Open Payment Term: Unless otherwise agreed, payment is due on delivery (COD). UCC2-310(a).
Open Delivery Term: Unless otherwise agreed, buyer takes delivery at the Seller’s place of business. UCC2-308(a).

9. Offer: Open Terms
Open Quantity: generally courts will not impose a quantity. UCC2-306.
Exceptions:
Requirements Contract: buyer agrees to purchase what the buyer needs or requires.
Output Contract: buyer agrees to buy all of seller’s production or output.

10. Merchant’s Firm Offer
At common law, an offer could be revoked any time prior to acceptance, unless there was some consideration.
At UCC, offer made by merchant in a signed writing is irrevocable for reasonable period of time. No consideration necessary.

11. Merchant’s firm offer
Sam’s used car is located in small town. Sam knows Susan buys a lot of used cars and leases them out to construction workers. Sam sends Susan a letter that states:
I have used 2004 Ford (myx545) that will sell you for $10, from now until Nov1. Signed Sam
On Oct 31, Nancy comes in and offers Sam $10, for the Ford. Sam sell her the car. On Nov 1 at 10: 00 A.M. Susan comes into Sam’s office and hands him a check for $10, for the Ford.
Was there a contract? Consideration? Is Sam in breach of K?

12. Acceptance
Any reasonable means of acceptance under the circumstances is permissible.
Promise to ship or prompt shipment is acceptance.
Shipment of non-conforming goods is both an acceptance and a breach unless goods sent as an “accommodation” to buyer (UCC2-206).

13. Acceptance: Additional Terms
If either party is a non-merchant, the contract is formed according to original terms of the offer.
If both parties are merchants, contract incorporates new terms unless:
(1) original offer expressly limits terms, or
(2) material change, or
(3) offeror objects within reasonable time.

14. Consideration
UCC requires consideration and modifications must be made in good faith.
Modification must be in writing if required by Statute of Frauds.

15. Statute of Frauds
Sale of goods over $500 must have a signed writing to be enforceable.
Exceptions to this rule:
Specially manufactured goods.
Admissions by breaching party.
Partial performance.
Merchant doesn’t object within 10 days.
Oral agreement enforceable after written confirmation between merchants.

16. Parol Evidence
Terms of a written agreement intended to be the final expression of parties’ intentions, cannot be contradicted by prior or contemporaneous agreements.
Exceptions: consistent terms, course of dealing and trade.

17. Unconscionability
Contract is one that is so unfair and one-sided it is unreasonable to enforce it.
Court can: set it aside, refuse to enforce the unconscionable provision, limit the contract.

18. Contracts for the International Sale of Goods
Applicability of the CISG.
Comparison of CISG and UCC.
Mirror Image Rule.
Irrevocable Offers.
Statute of Frauds.
Necessity of a Price Term.
Time of Contract Formation.

19. Special Provisions in International Contracts
Language and legal differences create special difficulties. Parties should agree to:
Choice of Language.
Choice of Forum (country).
Choice of Law.
Force Majeure Clause.(War in country)
circumstances beyond control