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49 Cards in this Set
- Front
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2-201
Formal Requirements of the Statute of Frauds |
(1) A K for the sale of goods for $500 or more is not enforceable by way of action or defense unless there is some signed writing sufficient to indicate a K for sale has been made between the parties and is signed by the party against whom enforcement is sought. (Quantity of goods is required)
(2) Between merchants, if within a reasonable time, a writing in confirmation of the K is received, and the party receiving has reason to know its contents, (1) is satisfied unless written notice of objection is given within 10 days after it is received. (3) A K that doesn't satisfy (1)but is valid in all other respects is enforceable EXCEPT: (a) Specially manufactured goods that cant be resold in the seller's ordinary course of business; (b) Party against whom enforcement is sough admits in pleading/testimony/in court that K for sale was made; (c) Goods for which payment has been made and accepted or which have been received and accepted (2-606) |
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2-202
Final Written Expression |
Under the PER, if the writings are intended as final expression of the agreement, evidence of prior or contemporaneous agreements cannot contradict, but can /explain/supplement:
(a) course of dealing & usage of trade; (b) consistent additional terms unless writing was fully integrated. |
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2-204
Relaxed Formation |
(1) K for sale can be made in any manner sufficient to show an agreement including conduct;
(2) K may still be effective even if moment of its making is undetermined; (3) A K doesn't fail for indefiniteness, i.e. 1 or more terms left out |
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2-205
Firm Offers O, M, W, HOBT, max 90 |
An offer by a merchant to buy or sell goods in a signed writing that, by its terms, gives assurance that it will be held open is not revocable, for lack of consideration, during time stated or reasonable time. (Max=90)
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2-206
Offer and Acceptance |
(1) Unless otherwise unambiguously stated:
(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by an method reasonable under the circumstances; (b) An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance by prompt promise to ship or by the shipment of conforming or non conforming goods, but such shipment of non conforming goods does not constitute acceptance if the seller seasonably notifies the seller that the shipment is offered only as an accommodation to the buyer. (2) Where beginning of performance is reasonable acceptance, no notification within a reasonable time is a lapse. |
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2-207
Additional Terms (Battle of the Forms) |
(1) A definite and seasonable expression of acceptance, or a written confirmation sent within a reasonable time is an acceptance even if it states terms additional or different from the offer unless acceptance is expressly limited to the terms of the offer;
(2) Additional terms are to be construed as proposals to the K. Between merchants, additional terms automatically become part of the K unless: -offer expressly limits it -they materially alter it -notification of objection has already been given or is given in a reasonable time 3. Conduct by both parties which recognizes the existence of a K is sufficient to establish a K even if the writings between the parties don't. In such cases, the knock out rule acts to knock out terms on which the parties do not agree. |
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2-209
Modification, Rescission, Waiver |
1. Modifications are binding without consideration.
2. Signed writings prohibiting Mod or rescis canot be modified or rescinded EXCEPT as between Merchants such a requirement on a form supplied by a merchant and separately signed by the other party. 3. SOF must still be satisfied. 4. Attempted mod/resc that doesn't meet 1 or 2 can operate as a waiver. 5. Waiver can be retracted by reasonable notification unless retraction would be unjust in view of a material change in position. |
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2-210
Delegations and Assignments |
1. A party can perform thru a delegate unless otherwise agreed or other party has a substantial interest in having his original promisor. (Delegation doesn't absolve duty or original obligor)
2. All rights of the seller can be assigned EXCEPT: -Materially change/increase duty/risk of other party or impair his chance of receiving return performance; 4. K prohibition of "all my rights" only bars delegation to assignor's duty of performance to assignee 5. Assignment of "All my rights" is both a delegation of performance duties and acceptance by assignee constitutes promise to perform those duties. (enforceable by either assignor or other party to original k) 5. |
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2-302
Unconscionable Contract or Clause |
1. If a court determines a K or a clause to be unconscionable at the time it was made, they may refuse to enforce it or only enforce the part without the unconscionable clause
2. If a party is unconscionable, parties will be given an opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making a decision. |
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2-305
Open Price Term |
1. K can be formed without price and pay a reasonable price upon delivery if:
-Nothing is mentioned about price -price is left to be agreed by parties & they fail to do so -Price is to be determined by FMV or recorded by a 3rd person who has yet to do so 2. Price is TBD by seller or buyermeans price is to be fixed in good faith 3. If a party is supposed to set the price but doesn't, the other can cancel the K if he wants or fix a reasonable price himself. 4. If parties intend not to be bound unless price is agreed upon and they can't agree, there is no K. Goods must be returned or unable, be paid for at a reasonable amount at the time of their delivery. |
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2-306
Requirement/Output Contracts |
A term that measures the quantity by the output of the seller or the requirements of the buyer must occur in good faith. Can't be disproportionate to any stated estimate or any other normal comparable output/requirement
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2-307
Delivery of a single lot or several lots |
Unless otherwise agreed all goods called for in a K must be tendered in a single delivery and payment is due on tender.
But if circumstances allow the other party to demand several lots, the price is apportioned to each lot. |
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2-308
Absence of specified place for delievery |
Place of delivery is at sellers place of business or, if he doesn't have one, his residence UNLESS another the parties know of another place at the time of K, then that is the place.
Documents of Title may delivered through customary banking channels |
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2-309
Absence of specified time provisions; Notice of Termination |
If no time is stated --> Reasonable time
Where K provides for successive performances but is indefinite as to duration --> valid for a reasonable time unless terminated by either party |
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2-310
Open Time for Payments or Running Credit |
Payment is due at the time/place where the buyer is to receive the goods even though the place of shipment is the place of delivery AND
If seller is authorized to ship goods, he can ship them under reservation, but buyer gets a chance to inspect goods before payment is due unless inspection is inconsistent with the terms of the K |
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2-313
Express Warranties |
Express Warranties are just another K terms.
Any affirmation/promise by the seller relating to the goods becomes part of the K as an express warranty and the goods must conform to the affirmations/promises. Descriptions of the goods creates an express warranty that the goods will conform to the description Any sample or model made part of the basis of the bargain becomes an Express Warranty Formal words like "warrant" aren't required, but an affirmation of the seller's opinion about value doesn't create an express warranty |
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2-314
Implied Warranty of Merchantibility |
Warranty that the goods are merchantable is implied if the seller is a merchant. (Food and drink included)
Merchantable means: -pass with out objection into stream of commerce under K description -fit for ordinary purpose for which they are used -fungible goods are of fair and average quality -run like they're supposed to, like others like them do -adequately contained/packaged/labeled per K -conform to promises/affirmations on labels/packaging |
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2-315
Implied Warranty of Fitness of a Particular Purpose |
Where the seller, at the time K, knows or has reason to know of a particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods
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2-316
Exclusion or Modifications of Warranties |
Words or conduct relevant to the creation of an express warranty or words or conduct negating/limiting a warranty shall be construed wherever reasonable as consistent with each other BUT subject to the parol evidence rule, negation/limitation is inoperative to the extent that such conduct is unreasonable
To exclude an implied warranty of merchantability, the words have to say "merchantability" and any writing must be conspicuous. To exclude an implied warranty of fitness, any language saying no warranty is sufficient. All implied warranties are excluded by words like "as is" or "with all faults." When a buyer has examined goods or a sample as fully as he'd like before purchase or has refused to do so = no implied warranty for defects that were easily discoverable An implied warranty can be excluded by course of dealing/course of performance or usage of trade. Remedies for breach of warranty can be limited in accordance with provisions on liquidated damages and on contractual modifications of remedy |
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2-317
Cumulation/Conflict of Warranties |
Warranties are deemed cumulative wherever possible, or are determined by intention of the parties to see which warranty is dominant.
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2-318
3PB of Warranties Express or Implied |
Seller warrants to natural person in the household or is reasonably expected to use/consume/be effected by goods who is injured by breach. A seller may not exclude or limit this.
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2-319
FOB/FOS |
When FOB is place of shipment, seller bears risk of putting them in possession of carrier
When FOB is place of destination, seller must transport goods at his own expense and risk and there tender delivery |
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2-512
Payment by Buyer before Inspection |
Where a K requires payment before inspection, non conformity doesn't excuse the buyer from making payment UNLESS:
-nonconformity appears without inspection -circumstances would justify an injunction against honor |
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2-513
Buyer's Right to Inspect Goods |
Where goods are tendered/delivered, buyer has a right before payment to inspect them at a reasonable time and place and in any reasonable manner. If seller is to send goods to the buyer, inspection can occur after they are delivered.
A place or method of inspection fixed by the parties is presumed to be exclusive |
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2-601
Buyer's Rights on Improper Delivery |
If the goods fail to conform to the contract in any way, the buyer can:
-Reject the whole, -Accept the whole, -Accept any commercial unit(s) and reject the rest. |
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2-602
Rejection in a Reasonable Time |
Rejection has to happen in a reasonable time after tender/delivery. Rejection is ineffective unless the buyer seasonably notifies the seller.
After rejection, any exercise of ownership by the buyer is wrongful against the seller If the buyer has, before rejection, taken physical possession of goods in which he has no security interest, he is under a duty after rejection to hold them with reasonable care at the sellers disposition for a time sufficient to permit the seller to remove them. |
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2-603
Merchant Buyer's Duties as to Rightful Rejection |
Buyer is to follow sellers instructions or, if none, try to sell perishables for the seller. If sold, Buyer is entitled to reimbursement from the seller or to take reasonable expenses from the proceeds.
Commission as is usual in the trade or, if none, reasonable sum not more than 10% |
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2-606
What Constitutes Acceptance of Goods |
Acceptance of goods occurs when:
- the buyer has a chance to inspect and then signifies to the buyer that the goods are conforming or that he will retain them in spite of their non-conformity -Buyer fails to make a rejection, but such acceptance does't occur until the buyer has had a reasonable time to inspect. - Buyer does any act inconsistent with the seller's ownership, unless wrongful against the seller, it is an acceptance only if the seller ratifies it Acceptance of a part of a commercial unit is acceptance of that entire unit |
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2-607
Effect of Acceptance / Notice of Breach |
1. Buyer must pay the K rate for goods accepted.
2. Acceptance precludes rejection of goods accepted and, if acceptance is made with nonconformity, acceptance cant be revoked. 3. Buyer must notify the seller within a reasonable time after he discovers any breach or be barred from remedy. 4. Burden is on buyer to establish breach with respect to goods accepted. 5. If a buyer is sued for breach of warranty or other obligation for which the seller is answerable, buyer MAY notify the seller and give him a chance to defend himself. |
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2-608
Revocation of Acceptance in Part or Whole |
Buyer can revoke acceptance of a lot or unit whose nonconformity substantially impairs its value to him if he accepted it on a reasonable assumption that its nonconformity would be cured and it hasn't seasonably been cured, or without discovery of a nonconformity, if acceptance was reasonably induced by difficulty in discovery or seller's assurances.
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2-609
Right to Adequate Assurance of Performance |
1. Implied that each party will perform as expected. When reasonable grounds for insecurity arise, either party may demand in writing, adequate assurance of due performance and can suspend any return performance for a commercially reasonable time for which he has not already received the agreed return.
2. BETWEEN MERCHANTS, reasonableness of grounds for insecurity and the adequacy of the assurance is determined by commercial standards. 3. Acceptance of any improper delivery/payment doesn't prejudice the aggrieved party's right to demand adequate assurances of future performance. 4. After receipt of the justified demand, failure to provide adequate assurance within a reasonable time not exceeding 30 days is repudiation of the K |
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2-610
Anticipatory Repudiation |
When either party repudiates with respect to performance not yet due, the loss of which will substantially impair the value of the K to the other, the aggrieved party may:
1. wait for performance by the repudiator for a commercially reasonable time; 2. Resort to any remedy for breach even if he notified the repudiator that he would wait for his performance; 3. suspend his own performance - |
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2-611
Retraction of Anticipatory Repudiation |
Until the repudiating party's next performance is due, he can retract his repudiation unless the aggrieved party:
1. has cancelled or materially changed position in reliance on it OR 2. has indicated he considers the repudiation final 3. Retraction may be by any method that clearly indicates to the aggrieved party that the repudiator will perform 4. Retraction reinstates the repudiator's rights under the K with due excuse and allowances to the aggrieved party for the delay |
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2-612
Breach of an installment K |
1. Installment K requires or authorizes goods in separate lots to be separately accepted, even though the K contains a clause "each delivery is a separate K"
2. Buyer can reject any installment which is nonconforming if it substantially impairs the value of that installment and cant be cured. If seller gives reasonable assurances of cure, Buyer must accept the installment. 3. Whenever a nonconforming installment substantially impairs the whole K, there is breach. BUT aggrieved party reinstates K by accepting nonconforming installment without seasonably notifying of cancellation or if he brings the suit only for past installment and demands performance of future installments |
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2-613
Casualty to Identified Goods |
Casualty w/o fault of either party before risk is passed to buyer = "no arrival, no sale."
If loss is total = K is avoided partial = can avoid or can accept goods and subtract value of deterioration from the K |
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2-614
Substituted Performance |
w/o fault of either party,agreed-upon carrier becomes unavailable or otherwise commercially impracticable, but a commercially reasonable sub is available, such performance must be substituted and tendered
If agreed means of $ fail bc of Gov, seller may withhold or stop delivery unless buyer provides a substantially equivalent means of paying |
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2-615
Delay in Delivery, Fair Allocation, Seasonable Notification |
Whole or part delay in delivery or non delivery isn't breach if the sale was made impracticable by a contingency the nonoccurrence of which is a basic assumption of K or by compliance with Gov, even if it later proves to be invalid
If only part of seller's capacity to perform is affected, he must allocate production and deliveries among his customers not then under K and his own requirements for further manufacture Seller must seasonably notify the buyer that there will be a delay or nondelivery Increased cost alone does not excuse performance bc that is exactly the type of risk which K's at fixed rates are supposed to cover. |
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Remedies
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A remedial right to which the aggrieved party is entitled to restore them to their original standing.
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2-702
Seller's Remedies for Buyer's Insolvency |
Where S discovers B's insolvency, he may refuse delivery except for cash for all goods to be delivered
Where B is insolvent and has received goods, S may reclaim goods B received on credit after demands for payment to be made within 10 days of receipt Successful reclamation of goods excludes all other remedies with respect to them |
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2-703
Seller's General Remedies |
Where B wrongfully rejects/revokes acceptance or fails to $ when due, or before delivery repudiates to part or whole K, then if breach is of the whole K, aggrieved S may:
1. Withhold goods 2. Stop goods being delivered by bailees 3. resell/recover damages 4. recover damages for non acceptance 5. cancel |
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2-705
Seller's Stoppage of Delivery in Transit |
S can stop bailee/carrier when he discovers B's insolvency until:...
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2-706
Seller's Resale |
Seller may resell the the goods or any remaining balance thereof. Auction ok. Breakdown ok
Where resale is made in good faith, S can recover DIFFERENCE BTWN resale price and original K price plus any incidental damages |
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2-708
Seller's Damages for Nonacceptance or Repudiation by the Buyer |
Difference in FMV at the time and place for tender and the unpaid K price plus any incidental damages, but less any expenses saved in consequence of buyer's breach
If above measure of damages is inadequate to make the seller whole, then measure of damages includes the profit (including reasonable overhead) which the seller would have made from full performance by the buyer plus any incidental damages including damages for costs reasonably incurred and due credit for payments or proceeds of resale |
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2-709
Action for Price |
When B fails to pay when price is die, S may recover damages for goods accepted or of conforming goods and for goods identified to the K that the seller is unable to resell plus any incidental damages
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2-710
Seller's Incidental Damages |
Include: Incidental damages including commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care, custody of the goods after buyer's breach, or in connection with the resale of the goods
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2-711
Buyer's Remedies |
Where S fails to make delivery or repudiates, or B rightfully revokes acceptance, B can cancel K and "COVER" and have damges
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2-712
COVER DEFINED |
After a breach, B may cover by making in good faith and w/out unreasonable delay, purchase of or K to purchase goods in substitution for those due from the seller
Damages will be difference between cost of cover and original K price at the time B learned of breach, plus incidental or consequential damages |
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Everything else important
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Specific Performance may be decreed where the goods are unique
B has a right to replevin to recover goods ID's in the K B can deduct all or part of damages resulting from S's breach from any part of the price still due under the same K. |
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2-718
Liquidated Damages |
Liquidated damages will be upheld if it appears that, at the time of K, an estimation of damages was very difficult to come up with and there were reasonable efforts by the parties to state a fixed compensation that resembled what probable damages would be.
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