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Unformatted text preview: on firm
offers and the UCC rule with regard to
3. Explain how the UCC treats additional
terms in an acceptance and distinguish
the effect of such terms under the UCC
and under common law.
4. Describe the concept of unconscionability
and its effect on a contract.
iStockphoto Chapter Overview 5. Explain how the UCC rule for modification of a contract differs from the common law rule.
6. Describe when sales of goods contracts
must be in writing, and when oral contracts are enforceable.
7. Explain the parol evidence rule. Chapter Overview
7.1 Offer and Acceptance of the Sales Contract
• • • • • • Merchant’s Firm Offers (§ 2-205)
Method of Acceptance (§ 2-206)
Additional Terms in Acceptance (§ 2-207)
Auction Sales (§ 2-328)
Defenses to Contract Formation
Unconscionable Contracts (§ 2-302) 7.2 Statute of Frauds (§ 2-201)
7.3 Modification of the Sales Contract
• Voluntary Modification (§ 2-209) rog80328_07_c07_134-156.indd 137 7.4 Modification by Operation of Law
• Casualty to Identified Goods (§ 2-613)
• Substituted Performance (§ 2-614)
• Unforeseen Circumstances, or Excuse by Failure of
Presupposed Conditions (§ 2-615) 7.5 The Parol Evidence Rule (§ 2-202)
• Course of Dealing (§ 1-205(1))
• Usage of Trade (§ 1-205(2))
• Course of Performance (Practical Construction)
• Interpretation of Sales Contract 10/26/12 5:52 PM Introduction CHAPTER 7 7.6 Chapter Summary
• Focus on Ethics
• Case Study: Kahn Lucas Lancaster, Inc. v.
Lark International Ltd.
• Case Study: Cook Grains, Inc., v. Fallis
• Critical Thinking Questions
• Hypothetical Case Problems
• Key Terms A rticle 2 of the UCC applies to contracts involving the sale of goods. Goods are tangible movable (portable) objects that can be owned. This definition excludes many
types of subject matter that is subject to personal ownership, such as real estate,
fixtures (things permanently attached to land), and intangible property, such as patents,
copyrights, and commercial paper. The category of goods includes such things as a pen,
a car, a pair of shoes, a dog, a boat, a cheeseburger, and a jet airplane. Contracts for such
items will fall under UCC rules.
Example 7.1. Sarah contracts to
sell Ben a laptop computer, a fur
coat, a thoroughbred racehorse,
and a house. The contract for
the house will be governed by
the common law; the other items
will be under the UCC. To determine whether a specific item is
classified as goods, simply determine
whether it is movable tangible personal
property. A mobile home that rests on
wheels or a temporary foundation, for
example, is goods, since it is tangible
personal property and movable; however if it is attached to real estate on a
Goods take many forms.
permanent foundation, then it no longer
George Doyle & Ciaran Griffin/Stockbyte/iStockphoto/Thinkstock
is goods because it is no longer movable;
instead, it becomes real estate. Likewise,
a wild deer standing on a person’s land is not goods, but it becomes so once it is legally
shot or trapped and captured (wild animals are not owned by anyone until they are lawfully captured or killed, and...
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