Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

17 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined
formation in general
Unless the context otherwise requires, this Article applies transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only a security transaction nor does this Article impair or repeal any stature regulating sales to consumers, farmers or other specified classes of buyers.
Scope; Certain Security and Other Transactions Excluded from this article:
(1)”Merchant” means a person who deal in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment agent or broker or other intermediary who by his own occupation holds himself out as having such knowledge or skill.
(2) “Financing Agency” means a bank, finance company or other persons who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller’s draft or making advances against it or by merely taking it for collection whether or not documents of title accompany the draft. “Financing agency” includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods
(3) “Between merchants” means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.
Definitions: “Merchant”; “Between Merchants”; “Financing Agency”.
(1) “Goods” means all things (including manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in an action. “Goods” also includes the unborn young of animals and growing crops other identified things attached to realty as described in the section on goods to be severed from realty
(2) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are “future” good. A purported present sale of future goods or of any interest therein operates as a contract to sell.
(3) There may be a sale of a part interest in existing identified goods.
(4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller’s interest in bulk be sold to the buyer who then becomes an owner in common.
(5) “Lot” means a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.
(6) “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (such as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity ( as a bale, gross, or carload) or any other unit treated in use or in the relevant market as a single whole.
Definitions: “Transferability; “Goods”; “Future” Goods; “Lot”; “Commercial Unit”.
(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
Formation in General
(1) Unless otherwise unambiguously indicated by the language or circumstances
(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances
(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods; does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer
(2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance
Offer and Acceptance in Formation of a Contract
(1) Rejection of goods must be within reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.
(2) Subject to the provisions of the two following sections on rejected goods
a. After rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful against the seller; and
b. If the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this Article, he is under a duty after rejection to hold them with reasonable care at the seller’s disposition for a time sufficient to permit the seller to remove them; but
c. The buyer has no further obligations with regard to goods rightfully rejected.
(3) The seller’s rights with respect to goods wrongfully rejected are governed by the provisions of this Article on Seller’s Remedies (ARTICLE REFFERED TO IS SECTION 2-703)
Manner and Effect of Rightful Rejection
1) Acceptance of goods occurs when the buyer
a. After a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity
b. Fails to make an effective rejection (subsection 1 of 2-602), but such acceptance does not occur until the buyer has had reasonable opportunity to inspect them; or
c. Does any act inconsistent with the seller’s ownership;but if such act is wrongful as against the seller it is an acceptance only if ratified by him.
2) Acceptance of a part of any commercial unit is acceptance of that entire unit.
What Constitutes Acceptance of Goods
An offer by a merchant (definition of merchant is the key to this) to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance of a form supplied by the offeree must be separately signed by the offeror
firm offers
1. The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time of delivery if
a. Nothing is said as to price; or
b. The price is left to be agreed by the parties and they fail to agree; or
c. The price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded
(3) A price is to be fixed by the seller or by the buyer means a price for him to fix in good faith.
(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.
It is important that the parties intend to be bound without knowing what the price is going to be.
open price term
where the seller at the time of contracting has reason to know any particular purpose for which goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, ther is unless excluded or modified under the next section an implied warrany that the goods shall be fit for such purpose
Implied warranty: fitness for particular purpose
(a) A ‘course of performance” is a sequence of conduct between the parties to a particular transaction that exists if
a. The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
b. The other party with knowledge of the nature of performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection

(b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
(c) A ‘usage of trade’ is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
(d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining, the meaning of the parties’ agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance
(e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable
a. Express terms prevail over course of performance, course of dealing, and usage of trade
b. Course of performance prevails over course of dealings and usage of trade; and
c. Course of dealing prevails over usage of trade

(f) Subject to subjection 2-209 a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance
(g) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprises to the other party.
Course of Performance, Course of dealing, and usage of trade
Unless otherwise agreed
(a) the place for delivery of goods is the seller’s place of business or if he has none his residence; but
(b) in a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery; and
(c) documents of title may be delivered through customary banking channels
absence of specified place for delivery
A promise in a contract creates a duty in the promisor to any intended to beneficiary to perform the promise, and the intended beneficiary may enforce the duty
creation of duty to beneficiary
(1)A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, expect that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.
(2)A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.
Output, Requirements and Exclusive Dealings
1. an agreement modifying a contract within this Article needs no consideration to be binding
2. a signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party
3. The requirements of the statute of frauds section of this article (§2-201) must be satisfied if the contract as modified is within its provisions
4. although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver
5. a party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived unless the retraction would be unjust in view of a material change of position in reliance on the waiver
Modification, Rescission and Waiver
(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:
a. The offer expressly limits acceptance to the terms of the offer;
b. They materially alter it; or
c. Notification of objection to them has already been given or is given within a reasonable time after notice of them 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 writings of the parties agree, together with any supplementary terms in incorporated under any other provisions of this Act.
Additional Terms in Acceptance or Confirmation