ch19

West's Business Law with Online Research Guide, 9th Edition

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SCOPE OF UCC ARTICLE 2 Article 2 of the UCC governs contracts for the sale of goods , pursuant to which (1) title (formal right of ownership) of (2) goods (tangible, movable property) is transferred from the seller to the buyer (3) in exchange for money . Article 2 governs only contracts for the sale of tangible, movable property – that is, property that (a) has inherent physical value and (b) can be moved from place to place . Article 2 does not govern: contracts for services , real property , or intangible personal property ( e.g. , intellectual property, stocks and bonds), or barter contracts, where goods or services are exchanged for other goods or services. Ch. 19: The Formation of Sales and Lease Contracts - No. 1 West’s Business Law (9th ed.)
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“MIXED” CONTRACTS A large number of disputes involving goods also involve services, real property, or intangible or immovable personal property – none of which are within the scope of Article 2. In such cases, courts decide whether to apply Article 2 to the dispute using one of two tests: Predominant Purpose: What was the predominant purpose of the underlying transaction; that is, what was the buyer most interested in buying? If goods , then Article 2 applies to the whole transaction (including the non-goods part of it). If non-goods , then Article 2 does not apply to any part of the transaction . “Gravamen of the Action” : What part of the underlying transaction gives rise to the dispute? If goods , then Article 2 applies to the dispute , even if the predominant purpose of the transaction was to sell or buy non-goods. Ch. 19: The Formation of Sales and Lease Contracts - No. 2 West’s Business Law (9th ed.)
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If non-goods , then Article 2 does not apply to the dispute , even if the predominant purpose of the transaction was to sell or buy goods. Ch. 19: The Formation of Sales and Lease Contracts - No. 3 West’s Business Law (9th ed.)
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MERCHANTS Merchant: A person who (1) regularly deals in goods of the kind involved in the sales or lease contract; (2) holds herself out as having unique knowledge and skill ; or (3) employs a merchant as a broker, agent, or other intermediary. Ch. 19: The Formation of Sales and Lease Contracts - No. 4 West’s Business Law (9th ed.)
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SCOPE OF UCC ARTICLE 2A Article 2A of the UCC governs contracts for the lease of goods, the sale of which would be governed by Article 2. Namely, an agreement whereby (1) one person (the lessor ) (2) transfers the rights of possession and use of tangible, movable property (3) to another person (the lessee ) (4) in exchange for rental payments . Ch. 19: The Formation of Sales and Lease Contracts - No. 5 West’s Business Law (9th ed.)
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TYPES OF LEASES Consumer Lease: A lease involving (1) a lessor who regularly engages in the business of leasing or selling goods, (2) a lessee who leases the goods primarily for personal , family , or household use , and (3) total lease payments
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ch19 - SCOPE OF UCC ARTICLE 2 Article 2 of the UCC governs...

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