1. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms sale (p. 268) price (p. 268) goods (p. 268) Uniform Commercial Code (UCC) (p. 268) contract to sell (p. 269) merchant (p. 270)

2. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms usage of trade (p.270) firm offer (p. 272) output contract (p. 272) requirement contract (p. 272) auction with/without reserve (p. 274) bulk transfer (p. 275)

3. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The law of sales governs contracts for the sale and lease of goods. Sales

4. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A sale is a contract in which ownership of goods is transferred from the seller to the buyer for consideration. The consideration is also known as the price, or the money that is paid for goods. Sales

5. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Goods are all things that are moveable, such as your clothing, books, pens, food, car, and even the gas you put in your car. Money, stocks, and bonds are not considered goods. Sales

6. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods $ ShirtStore ShirtStore 13.1 Sales

7. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The Uniform Commercial Code (UCC) is a collection of laws that governs various types of business transactions. When you have a contract involving goods, the UCC will apply. The UCC

8. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A sales contract may involve either a sale or a contract to sell. The Sales Contract

9. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Every time you buy goods and take ownership of them, a sale occurs. However, if you will take ownership at some future time, the agreement is a contract to sell, not a sale. The Sales Contract

10. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods When a contract includes both goods and services, the dominant element determines the type of contract. Contracts for Both Goods and Services

11. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the sale of goods dominates, the laws of the UCC apply. If the performance of service dominates, the common law of contract applies. Contracts for Both Goods and Services

12. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts With some exceptions, the UCC applies to all sellers and buyers of goods.

13. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts A merchant is a business or person who deals regularly in the sale of goods or who has a specialized knowledge of goods. A non-merchant is a casual or occasional seller.

14. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts A sales contract must contain the same elements as other contracts, but the UCC has relaxed some of the strict rules of contract law.

15. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Good Faith Parties to a sales contract must treat each other fairly.

16. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Methods of Dealing and Usage of Trade When parties have previously dealt with each other, those methods of dealing may be used to supplement or qualify the terms of their sales contract.

17. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Methods of Dealing and Usage of Trade This rule is true with any usage of trade, which is the method of dealing that is commonly used in the particular field.

18. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Formation of a Sales Contract You may make a contract in any manner that shows that the parties have reached an agreement.

19. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Acceptance of an Offer In most situations, you may accept an offer by any means and in any reasonable manner.

20. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Different or Additional Terms An acceptance may have different or additional terms added without a complete rejection of the offer.

21. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Firm Offer A firm offer is a merchant’s written promise to hold an offer open for the sale of goods. It does not require payment to be binding.

22. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Open-Price Terms A sales contract may be made without a settled price. Unless the parties agree on a price prior to delivery, a reasonable price can be settled at the time of delivery.

23. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Output and Requirement Terms Output and requirement contracts are allowed even if they are not definite.

24. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Output and Requirement Terms An agreement to buy all of the manufacturer’s goods is an output contract. A requirement contract occurs when a seller agrees to supply the needs of a buyer.

25. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Modification No consideration is necessary to change a contract for the sale of goods. The modification may be oral, unless the original agreement is in writing and states that it must be modified in writing.

26. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Leasing Goods You can apply the sale-of-goods rules to the leasing of goods, with a few modifications.

27. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Many sales contracts are oral rather than written. As long as the price is less than $500, an oral contract for the sale of goods is enforceable. Form of Sales Contracts

28. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the price is $500 or more, a sales contract must be in writing to be enforceable with the following exceptions: Form of Sales Contracts

29. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Written confirmation of an oral contract between two merchants is sent within a reasonable time, and no objection is made within ten days. Exceptions to the $500 rule

30. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The contract involves specially manufactured goods that cannot be resold easily. Exceptions to the $500 rule

31. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The buyer receives and accepts the goods or pays for them. The parties admit in court that they entered into an oral contract. Exceptions to the $500 rule

32. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Other sales governed by the UCC rules include auction sales and bulk transfers. Other Sales Governed by UCC Rules

33. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales In an auction with reserve, the auctioneer doesn’t have to sell the goods for the highest bid if it’s lower than the reserve amount. The auctioneer may withdraw the goods at any time before a sale is completed.

34. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales In an auction without reserve, the auctioneer must sell the goods to the highest bidder. The goods cannot be withdrawn from bidding unless no bid is made.

35. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales An auction sale is with reserve unless it is expressly stated that it is without reserve.

36. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Bulk Transfers Sometimes a business transfers all merchandise and supplies at once, known as a bulk reserve.

37. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Bulk Transfers The UCC rules require that the buyer of the bulk goods notify all of the seller’s creditors at least ten days before the transfer will take place.