Key Concept 2: What is a Merchant?
●For now, we continue our overview of the UCC with four key provisions in Article 2 that will come up again later in the course. Generally, these highlighted ideas are notapplicable to contracts that are governed by common law rules.Rather, these laws are governed by Article 2 of the UCC. We are effectively presenting a series of contract rules that are special to Article 2..●Listed below are the four key provisions: ●Contract Formation○Under the firm offer rule,if a merchant signs a written promise to keep an offer open for a set amount of time, it must honor the promise even if it has received no payment for making the promise.And so, if a car dealer gives you a signed, written promise that "the offer to sell the blue sedan for $25,000 is open until Friday at 5:00 PM," then the dealer cannot revoke the offer to sell you the car until Friday at 5:00 PM.○The UCC has a series of gap-filler provisions, so that even if parties forget to include some specific things in a contract (such as when deliveries will be made or how payment will be made), they can be determined by a court. Also, battle of the forms provisions allow a court to iron out some disagreements between parties.●Contract Enforcement○Article 2 contains a statute of frauds provision, which requires that sale of goods contracts of over $500 must be in writing to be enforceable.If you andI have a verbal, handshake agreement that you will pay me $100 for my used TV, then the verbal agreement can amount to an enforceable contract. But if we have a verbal agreement that you will buy my used car for $10,000,you do not have to buy the car unless one of the special circumstances described in the reading assignment applies to the deal.
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- Spring '08
- Law, Supreme Court of the United States, Appellate court