Commercial Law Ucc Article 2

Front 1

2-104

Back 1

Someone who deals in the goods of the kind, or by occupation holds himself out as having knowledge peculiar to the goods involved in the transaction or to whom such knowledge may be attributed by his employment or an agent/intermediary who by his occupation hods himself out as having such knowledge/skill

Front 2

2-314- Implied Warranty of Merchantability

Back 2

-Warranty that goods are merchantable; fit for ordinary purpose of which such goods are used.
-Seller must be merchant of goods of the kind.
-Created by selling the goods...always given unless disclaimed.
-Does not have a to plead/prove reliance
-For goods except serving for value of food/drink to be consumed either on premises or elsewhere

Front 3

2-205- Firm Offer

Back 3

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not recoverable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event should exceed three months; but any such term of assurance on a form supplied by the offer.
o Comment: just be characterized or expressed as a firm offer …Firm Offers

Front 4

2-207(1) - (3) Additional or Different Terms in Acceptance or Confirmation (Battle of the Forms)

Back 4

1. A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms
2. The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

o The Offer expressly limits acceptance to the terms of the offer,
o They materially alter it,
o Notification of objection to them has already been given or is given within a reasonable amount of time after notice is received

3. Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writi

Front 5

2-209 Modification...Absence of Specific Provision Notice of Termination

Back 5

1. The time for shipment or delivery or any other action under a contract if not provided in this article or agreed upon shall be a reasonable

2. Where the contract provides for successive performance but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.

3. Termination of a contract by one party except on the happening of an agreed event required that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable….Absence of Specific Time Provisions; Notice of Termination

Front 6

2-201 Statute of Frauds

Back 6

1-A contract for the sale of goods for $500 or more is not enforceable unless there is a writing sufficient to show that a contract has been made, which is signed by the party against whom enforcement is sought.

-A writing may omit or incorrectly state a term, but the contract is not enforceable beyond the quantity of goods shown in the writing.
1*The writing must evidence a contract for the sale of goods
2*The writing must be signed by the party to be charged
3* The writing must specify a quantity

(2)Between merchants, if a writing in confirmation of the contract sufficient against the sender is received within a reasonable time and the party receiving it has reason to know its contents, it satisfies the SOF unless written notice of objection is given within 10 days of receipt.

(3)A contract that does not satisfy § 2-201(1), but which is valid in other respects, can still be enforced under certain conditions:

Specially manufactured goods

Admission in plea

Front 7

2-202 Parol Evidence Rule

Back 7

-Triggers
-Terms on which the confirmatory memorandum o the parties agree; or

-Terms set forth in a writing intended as a final expression of the parties’ agreement

-Such terms may not be contradicted by evidence of prior agreements or contemporaneous oral agreements

-Such terms may be explained or supplemented by:
-Course of performance, course of dealing, or usage of trade (always) (§ 2-202(a)); or

-Evidence of consistent additional terms, unless the writing was intended to be the complete and exclusive statement of the terms of the agreement (§ 2-202(b))

Front 8

§ 2-509(1): Risk of Loss in Absence of Breach; Shipment by Carrier

Back 8

Where the seller ships goods by carrier:

-If the contract does not require him to deliver the goods at a particular destination, the risk of loss passes to the buyer when the seller duly delivers the goods to the carrier.
(Shipment Contract)

-If the contract does require the seller to deliver the goods at a particular destination, the risk of loss only passes to the buyer when the goods are duly tendered by the carrier at that location so as to enable the buyer to take delivery.
(Destination Contract)

Front 9

2-509(2): Risk of Loss in Absence of Breach; Goods Held by Bailee

Back 9

-On his receipt of a negotiable document of title covering the goods;

-On acknowledgment by the bailee of the buyer’s right to possession of the goods; or

-After the buyer’s receipt of a non-negotiable document of title or other written direction to deliver.

Front 10

§ 2-509(3), (4): Risk of Loss in Absence of Breach; Other Situations

Back 10

-In any case not covered by subsection (1) or (2), the risk of loss passes to the buyer on his receipt of the goods if the seller is a merchant; otherwise on tender of delivery. (§ 2-509(3))

-The above rules are default rules, and are always subject to contrary agreement by the parties. (§ 2-509(4))

Front 11

§ 2-510: Effect of Breach on Risk of Loss

Back 11

Where the buyer has a right to reject a delivery of goods due to non-conformity, the risk of loss remains on the seller until cure or acceptance. (§ 2-510(1))

Where the buyer rightfully revokes acceptance he may, to the extent of any deficiency in his insurance coverage, treat the risk of loss as having been on the seller from the beginning. (§ 2-510(2))

Where the buyer repudiates or otherwise breaches before risk of loss has passed to him, the seller may, to the extent of any deficiency in his insurance coverage, treat the risk of loss as resting on the buyer for a commercially reasonable time. (§ 2-510(3))

Front 12

§ 2-313: Express Warranties by Affirmation, Promise, Description, Sample

Back 12

A seller creates express warranties by:
Affirmation of fact or promise (§ 2-313(1)(a))
Description of the goods (§ 2-313(1)(b))
Sample or model (§ 2-313(1)(c))

-Affirmation, description, sample, or model must be part of the basis of the bargain to create a warranty. (§ 2-313(1))

-Do not have to use words such as “warrant” or “guarantee.” (§ 2-313(2))

-Need not have specific intention to make a warranty. (§ 2-313(2))

-Opinion or commendation of the goods does not create an express warranty. (§ 2-313(2))

Front 13

§ 2-314: Implied Warranty: Merchantability

Back 13

Warranty that goods are merchantable is implied in contracts where seller is merchant with respect to goods of that kind. (§ 2-314(1))

To be merchantable, goods must be fit for their ordinary purposes and pass without inspection in the trade. (§ 2-314(2))

Serving for value of food and drink to be consumed on premises or elsewhere is a sale for purposes of this section. (§ 2-314(1))

Can be excluded or modified under certain conditions. (See § 2-316)

Front 14

§ 2-315: Implied Warranty: Fitness for Particular Purpose

Back 14

Seller must have reason to know any particular purpose for which the goods are required.

Seller must have reason to know that buyer is relying on seller’s skill or judgment to select or provide suitable goods.

If these requirements are met, there is an implied warranty that the goods shall be fit for such purpose.

Can be excluded or modified under certain conditions. (See § 2-316)

Front 15

PRIVITY

Back 15

NORMAL DISTRIBUTION CHAIN:
 
[component parts mfr]

Manufacturer (winery)
↓ (vertical privity)
Distributor
↓
Seller (store that sold wine)
↓
Ultimate Buyer → family/household members, guests, employees, bystanders (horizontal privity in § 2-318)

Front 16

§ 2-318: Alternative A

Back 16

Extension of warranties limited to family members, household members, or guests of the buyer

Extension of warranties limited to natural persons

Must be reasonable to expect person to use, consume, or be affected by good

Limited to personal injury

Seller cannot contract around this extension

Front 17

§ 2-318: Alternative B

Back 17

Significant expansion in scope by extending warranties to any natural person reasonably expected to use, consume, or be affected by goods

Extension still limited to personal injury

Seller cannot contract around this extension

Front 18

§ 2-318: Alternative C

Back 18

Extends warranties to any person reasonably expected to use, consume, or be affected by goods

Extends horizontal privity beyond natural persons

Recovery not limited to personal injuries

Seller cannot contract around this extension as to personal injury