BUS311_chapter_07

Indd 142 102612 552 pm section 71 offer and acceptance

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Unformatted text preview: rm, and shipping charges would not be a material change to the burden of the seller. They have a contract, but Lancer does not need to ship UPS and Banner may have to pay the charge. rog80328_07_c07_134-156.indd 142 10/26/12 5:52 PM Section 7.1 Offer and Acceptance of the Sales Contract CHAPTER 7 Example 7.14. Lancer makes the same offer, and Banner makes their usual acceptance. The cost of shipping is not a material change, but Lancer doesn’t like UPS, and is giving all their business to FedEx these days. Lancer informs Banner that they will ship FedEx. They have a contract, and Banner’s term is not part of it, since Lancer objected within a reasonable time. If the offeree attempts to add different, rather than additional terms, the UCC provides that the contradictory terms cancel each other out. Example 7.15. Alpha offers to sell 1,000 widgets to Beta, with a 30-day warranty. Beta accepts, with a 60-day warranty. There is a contract. What, then, is the term of the warranty? What if once Beta has the widgets, some of them break 40 days later? Remember, neither party’s time period applies. The UCC would consider what a typical, reasonable warranty is for the type of goods involved, and put that term in to fill the gap. This may all seem very convoluted, but what the UCC is attempting to do is establish rules that will govern the contract when the parties clearly have agreed on the essential matters (type of goods, price, etc.) but do not agree on all the possible contract terms. Often these situations arise because of what is known as the “battle of the forms.” What happens is that an order for goods is placed using the buyer’s standard, preprinted form, and all the buyer has done is fill in the sections that describe the goods. The seller accepts the order using seller’s own invoice, which has its own multiple paragraphs of small print. The forms don’t match when it comes to some of the terms. Many times, the seller and buyer may not even realize the forms are in conflict (many people dont read the small print) until a particular controversy arises, for example, over the length of the warranty period. Auction Sales (§ 2-328) Article 2 of the UCC also clarifies the common law regarding acceptance in auction sales, which are completed when the auctioneer’s hammer falls. In an auction contract, a bidder makes the offer, which is then accepted by the auctioneer when he announces the item sold. An auction without reserve is one in which the auctioneer agrees to take the highest bid, and gives up the right to withdraw an item if he believes the bidding to be too low. But if sales at auction are specified to be with reserve, the seller reserves the right to withdraw any item offered for sale at auction at any time before accepting a bid. rog80328_07_c07_134-156.indd 143 At an auction, the auctioneer is soliciting offers, and the bidder makes the offer. PR Newswire/Associated Press 10/26/12 5:52 PM Section 7.2 Statute of Frauds (§ 2-201) CHAPTER 7 De...
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