005 Contracts--03 Ucc

Front 1

Firm Offer

Back 1

in a sale of goods, if a MERCHANT promises in a SIGNED WRITING to keep an offer OPEN, then the offer is irrevocable.

-almost every business person is a merchant under UCC

-3 month time limit, if no time period stated offer will be firm for a reasonable time not to exceed 3 months

Front 2

$ Perfect Tender Rule

Back 2

Seller is obligated to deliver exactly the right GOODS at exactly the right TIME at exactly the right PLACE

-if S fails in any respect, B may reject the whole


--if S has reason to belive that a nonconforming shipment will be accepted (usually b/c of past dealings) then S will, upon notification to B of his intent to cure, have a reasonable time to cure the defect.
--exeption in installment contracts:

a defective shipment in an installment contract cannot be rejected if the defect can be cured.

Front 3

$ Perfect Tender Rule--Accommodation

Back 3

-normally if a S ships non-conforig goods t is 1. an acceptance and 2. Breach

UNLESS

shipment of nonconforming goods includes a notice of accommodation then treated as a counteroffer to deal in nonconforming goods which B can either accept or reject but NOT A BREACH.

Front 4

"Firm Offers"

Back 4

even w/out consideration to keep offer open, a Merchant's signed, written offer to buy or sell goods assures that the offer will be held open for a certain time.
But:
1. Time period cannot exceed 3 months

AND

2. If offeree's form is used, offeror must separately sign the assurance.

Front 5

$ Confirmatory memo Rule

Back 5

-applies to MERCHANTS only

-if 1 party within a reasonable time, after an oral offer, sends a WRITTEN confirmation thereof to the other party that binds the sender, it will satisfy the SOF requirements against the RECIPIENT as well IF he had reason to know of the confirmation's contents UNLESS he objects to its contents in WRITING within 10 days
--applies EVEN IF it varies from original contract

Front 6

S' right to Cure

Back 6

Where a buyer has rejected goods b/c of defects, S may WITHIN THE TIME ORIGINALLY PROVIDED for performance "cure" by:

1. giving reasonable NOTICE of the intention to cure

2. Making a new tender of CONFORMING goods

Front 7

Buyer right of rejection

Back 7

If nonconforming goods are tendered to the buyer, buyer may:

1. Keep and sue for damages or
2. Reject and cancel the K or sue
-if S refuses to refund B can resell goods and apply proceeds to what is owed him from the seller plus offset expenses of selling.



UNLESS the K is an installment K

If B accepts nonconforming goods (because of late delivery), then he can still sue for any damages caused by a delay in shipment

Front 8

B's Rejection

Back 8

To properly reject, the rejecting party must, within a reasonable time after delivery and before acceptance, notify the seller of the rejection.

If the notice fails to state a defect, the B cannot rely on the defect if the S could have cured by supplying nonconforming goods.

Front 9

Buyer right of rejection--single delivery Ks

Back 9

buyer can reject all, accept all, or accept any commercial units and reject the rest.

If B chooses to accept, then B has right to damages of nonconforming goods.

-S's failure to make a reasonable contract with a carrier or his failure to notify the buyer that the goods have been shipped are grounds for rejection ONLY if MATERIAL LOSS or DELAY results.

Front 10

Buyer right of rejection--Installment K

Back 10

An installment K is one that requires or authorizes delivery in separate lots to be separately accepted.

-B has right to reject an installment when there s a substantial impairment in that installment that cannot be cured

-If the default wrt one installmnt substantially impairs the value of the whole k, then the seller has breached the entire K

Front 11

Offer

Back 11

An offer is construed as inviting acceptance in any reasonable manner and by any reasonable medium.

Generally an offer to buy goods for current shipment is construed as inviting acceptance by:
1. promise to ship OR
2. prompt shipment of conforming or nonconforming goods

Front 12

Acceptance of Goods--Methods

Back 12

1. Express Acceptance
2. Implied acceptance--retention after acceptance without rejection
3. C.O.D. payment without inspection dos NOT constitute an acceptance. B may still reject within a reasonable time.

Front 13

Delivery Obligations of Seller--Shipment K

Back 13

normal UCC K

1. S must deliver goods to common carrier's city
2. S must make reasonable arrangements for transportation to B
3. S must notify B of these arrangements.

Front 14

Delivery Obligations of Seller--Destination K

Back 14

S had agreed to deliver to B's Destination (buyer's place of business)

Front 15

Delivery Obligations of Seller

Back 15

determined by language of K (f.o.b.)

and course of dealing, usage of trade

Front 16

Risk of Loss--non-carrier cases

Back 16

if S is a MERCHANT, risk of loss passes to B when B takes PHYSICAL POSSESSION of the goods.

If S is not a merchant, risk of loss passes to B on TENDER of delivery (i.e. S has goods ready for B to pick up at the time and place specified in the K)

Front 17

Risk of Loss-Carrier Cases

Back 17

Shipment K--risk shifts to B when delivered to carrier

Destination K--risk shifts when goods are TENDERED

Front 18

Risk of Loss--Breach by S

Back 18

Defective goods, risk of loss does not pass to B until defects are cured or B accepts goods despite defect.

-if B rightfully revokes acceptance, then risk of loss stays with S

Front 19

Risk of Loss--Breach by B

Back 19

Any loss occurring within a commercially reasonable time falls on B if B repudiates/otherwise breaches the K.

Front 20

Identification

Back 20

a designation of specific goods as the ones to be delivered un the K of sale.

-once goods are identified the identification gives the B an insurable interest in the goods, and in certain circumstances the right to get the goods from S and the right to sue 3P

Front 21

Identification--specific, ascertained, and existing goods

Back 21

ID takes place at the time K is made

Front 22

Identification--crops, unborn animals

Back 22

unborn animals or crops to be harvested in 12 months, ID takes place when young are conceived or crops are planted

Front 23

Identification--other goods

Back 23

ID takes place when goods are shipped, marked, or otherwise designated by S as goods to pass under the K.

Front 24

Insurable Interest

Back 24

B has an insurable interest when the goods have been identified

S ALSO has an insurable interest in the goods as long as he has title to them or a security interest in them

Front 25

Express W

Back 25

arises by affirmation of fact, promise, description, or sample BY any seller

-extremely difficult to disclaim

Front 26

Implied W of good title

Back 26

arise by sale of goods BY any seller

-can be disclaimed by specific language or circumstances showing that S does not claim title.

Front 27

Implied W of merchantability

Back 27

W that the goods are "fit for a particular purpose"

-arises by sale of goods of the kind regularly dold by the MERCHANT[only applies to merchants]

-can be disclaimed by a disclaimer mentioning "merchantability" and the disclaimer must be conspicuous

Front 28

Implies W of Fitness for a Particular Purpose

Back 28

arise by a sale of gods where S has reason to know of particular purpose and of B's reliance on S's skill and judgment to select suitable goods

-By conspicuous WRITTEN disclaimer

Front 29

Disclaimer of W's

Back 29

-can also be disclaimed by:
1. language such as "as is" or "with all faults"

2. inspection, at least as to defects that a reasonable person would reveal

3. curse of dealing, course of performance or usage of trade

-subject to being tested by unconsionability i.e. personal injury damages wrt consumer goods cannot be disclaimed

Front 30

liability for breach of W

Back 30

extend to any natural person who is in the FAMILY or HOUSEHOLD of the B or who is GUEST in her home if it is reasonable to expect that such person may use, consume, or be affected by the goods

AND

that person suffers PERSONAL INJURY because of the breach of W

Front 31

UCC battle of the forms

Back 31

1. Are the changes so significant that they change the whole deal? Yes--> No K treat acceptance as a counter offer

2. No, changes not significant but MATERIAL (payment, liability, remedies, breach)--> Yes not included in K, but K is STILL VALID under terms of offer.

3. No, if the changed terms in acceptance are minor/nonmaterial then they are incorporated in the K unless offeror objects within a reasonable period of time.

Front 32

UCC modificaitons v. CL

Back 32

Cl--to have a valid modification you need NEW consideration.

UCC-allows for good faith modifications

Front 33

$ Gap Fillers--Price

Back 33

-failure to state a price doe snot prevent formation of a K if the parties intended to form a K without the price being settled.

price is left to be agreed to by the parties.

if they fail to agree a reasonable price at the time of delivery will be supplied by the court.
---
if price is not stated in the K but it appears that the parties intended to form a K a reasonable price will be implied.

For a price to be implied EITHER:
1. there must be nothing about price in the K
2. price must have been left to be agreed upon later;
OR
3. price was to be fixed by a 3P or external factor.

Front 34

F.O.B. ____

Back 34

freight on board

obligates the seller to get the goods to the location indicated after the term.