LPP 457 Exam 2 Note Sheet.docx - Chapter 20 Scope of article 2 o You must always first establish how you know article 2 applies to a transaction before

LPP 457 Exam 2 Note Sheet.docx - Chapter 20 Scope of...

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Chapter 20: Scope of article 2 o You must always first establish how you know article 2 applies to a transaction before you use code provisions to support your analysis! o Governs contracts for sale of “goods.” o Article 2 ONLY applies to sales of goods . CODE SECTION 2-102 o A “Sale” is the passing of title from seller to a buyer for a price (payable in cash, goods, services) CODE SECTION 2-106(1) o What are goods? A “good” must be tangible and movable . CODE SECTION 2- 105(1) Tangible: has physical existence. Movable: carried from place to place. o If contract deals with both goods & services then “Predominant Factor” Test – if goods, then UCC governs, if services then common law governs entire contract. Merchant ”? CODE SECTION 2-104(1) Art. 2 imposes special standards upon a “merchant” who has special business expertise and is not a casual buyer/seller. Deals in goods of the kind in the sale. Holds herself out as having special expertise, knowledge, or skill. A person who employs a merchant as a broker, agent or other intermediary. Offer: At common law once a valid offer is unequivocally accepted, a binding contract is formed. (Formation of Sales and Lease Contracts) UCC allows for open pricing, payment, and delivery terms, even if terms undefined UCC 2-204 , 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. 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 ). (If no time or date specified, court will impose a reasonable time.) Open Quantity : generally courts will not impose a quantity and there is no remedy, unless: the contract is either a requirements or output contract. Merchant’s Firm Offer (2-205 ), Offer made by merchant in a signed writing is irrevocable for reasonable period of time. No consideration necessary. The Offer Must be in Writing and Signed by the Offeror. Methods of Acceptance: offeror can specify a means of acceptance. Any reasonable means of acceptance under the circumstances is permissible. CODE SECTION 2 - 206 : A promise to ship or prompt shipment is acceptance. Shipment of non-conforming goods is both an acceptance and a breach unless goods were sent as an “accommodation ” to buyer, with prompt notice.
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CODE SECTION 2 - 207 – ADDITIONAL TERMS PROVISION – THE UCC DISPENSES WITH THE MIRROR IMAGE RULE (If offeree’s assent contains additional or different terms, and it is conditioned on offeror’s assent, it is not an acceptance).
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