Cheat Sheet TEST 3.docx

Cheat Sheet TEST 3.docx - Formation of Sales and Lease...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Scope of Article 2 (Sales) Article 2 establishes rules that govern the sale of goods All states except Louisiana have adopted some version of Article 2 (Sales) of the UCC Article 2 is also applied by federal courts to sales contracts governed by federal law Article 2 has recently been revised Has been adopted by most states (either in part Article 2 —Sales What Is a Sale? Sale: the passing of title to property from seller to buyer for a price What Are Goods? must be tangible and movable (not land, services or intangibles). Goods Associated with Real Estate Goods and Services Combined . (Predominant Factor test. If primarily for goods, UCC applies) Who is a “Merchant”? Generally, Article 2 deals with sale of ALL goods. However certain higher standards apply to merchants as opposed to casual sellers or “consumers”. A merchant is one who deals in goods of the kind sold, and is presumed to posses a high degree of expertise. A merchant holds himself out as having special skill or knowledge. A person who employs a merchant as a broker or agent has the status of merchant in that situation. Article 2A Leases Definition of a Lease Agreement Lease agreement: lessor agrees to transfer right and use of possession in exchange for rental payments Consumer Leases A lessor who regularly engages in the business of leasing or selling. A lessee who leases the goods “primarily for a personal, family, or household purpose.” Total lease payments that are less than a dollar amount set by state statute. Formation of Sales and Lease Contracts UCC modifies the common law of contracts as follows: Where UCC speaks, it preempts the common law; Where UCC is silent, the common law governs. Offer: Open Terms OFFER: UCC valid offer may include “open” (missing) terms: Open Price Term : court will determine a reasonable price at time of delivery and enforce the contract. Open Payment Term : payment is due at the time and place at which buyer is to receive goods. Open Delivery Term : buyer takes delivery at seller’s place of business. Offer: Open Terms The only term the court will not create is the quantity. If quantity is not specifically stated, a court will deem the contract unenforceable because it cannot objectively determine the quantity. If no quantity is specified, there is NO contract, unless: Requirements Contract: buyer has agreed to purchase all he needs from seller. Output Contract: buyer has agreed to purchase all the products the seller manufactures or produces. Merchant’s “Firm Offer” Under common law, an offer can be revoked at any time before acceptance, unless there is an option contract (offeree pays consideration for offeror’s irrevocable promise). UCC creates a second exception: Firm offer occurs when merchant-offeror gives assurances in a signed writing that the offer will remain open.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern