Fall 2010 Business Law and the Legal Environment - Week 7

Fall 2010 Business Law and the Legal Environment - Week 7 -...

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Business Law and the Legal  Environment Week 7 Fall 2010
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What must be in a Writing/”Record” under the UCC? Under the UCC, the formation of a contract can be recognized even though one or more of the terms are left open so long as the parties clearly intend to contract. 2 requirements: Quantity (including subject matter of quantity, Ex. 3 widgets) Signature/Authentication of the defendant
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Merchant Exception to the Signature Requirement of the UCC This exception allows merchants to create a C onfirmation Memorandum of their oral agreement as written evidence of an agreement. Memorandum is a letter, fax, memo or possibly an email signed by one of the two merchant parties to an oral agreement. This memorandum can be used by either party to enforce the contract. A party must object in writing within 10 days
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Confirmation Memorandum Example Ralph, a retailer, has orally agreed to purchase 1,000 pounds of T-bone steak from Jane, a beef wholesaler, for $2.79 per pound. Jane sends Ralph a signed memo that reads, “This is to confirm our telephone conversation earlier today. I will sell you 1,000 pounds of T-bone @ $2.79 per pound.” This memo can be used by either Ralph or Jane to enforce the contract.
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Open Terms Under the UCC Price – Unless specified by the parties, a Reasonable Price at the time of delivery Quantity (Requirement and Output) – Must be done in Good Faith and cannot be disproportionate to prior dealings Delivery – Unless otherwise specified at the sellers place of business; known location Time – For delivery, shipment, or any other action is at a Reasonable Time- unless stated in the contract Payment – Unless otherwise specified, payment is due at the time and place buyer is to receive the goods; can inspect-normally anything UNLESS seller wants cold hard cash
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Hypothetical Retailer negotiated a lease with the Owner of a building in downtown Blacksburg. Retailer drafted a lease accurately reflecting all of the terms of the agreement that included the parties, exact building, condition of the store, dates of the lease and the monthly rent. Retailer signed the lease and sent it to Owner on August 1. On August 20, Owner leased the same building to another tenant for more money. Retailer is suing owner for breach of contract. Who will win?
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Answer Owner will win since the contract cannot be enforced against him since he never signed the lease agreement.
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Effect of Not Complying with the SOF A sales contract that does not satisfy the statute of frauds cannot be enforced in court (even though the parties may have a valid agreement, the SOF is a defense to enforcement). However, since the oral contract itself is not unlawful, it may be voluntarily performed by the parties.
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Parol Evidence Rule Any written or oral words outside the “four corners” of the written contract. Applies to both Common Law Contracts and the UCC
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This note was uploaded on 11/04/2010 for the course MKTG 3340 taught by Professor Smith during the Spring '10 term at Roanoke.

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Fall 2010 Business Law and the Legal Environment - Week 7 -...

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