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Formation of Sales and Lease and
Internet Contracts
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romulgated by Commission on Uniform
State Laws
It is a suggested lawƦ
Ʀthat has been adopted, at least in
part, by all states
State law, though similar in all states
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Covers contracts involving the sale of
goods. (Article 2)
Does not cover contracts for
Services
Real roperty
Why is uniformity important?
Why more important with goods?
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What is the subject matter?
Goods?
ƥ If no, look to common law
ƥ If yes, the UCC takes precedence over common
law
Mixed Sales
ƥ art goods and part not
ƥ How to decide which applies?
Which is predominant?
Based on this, entire contract is
evaluated the same
Thus, if mainly goods, the UCC applies
even to the services portion
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Commerce is good
Easier to form contracts than under
common law
Merchants held to a higher standard
than nonmerchants
Duty of good faith
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When the UCC was promulgated in
1949, what could be leased?
What can be leased today?
Leases today are often an alternate
form of purchase
Article 2A is parallel to Article 2
Consumer v. finance leases
Are held to a higher standard
One who deals in the goods of the
transaction
One who holds himself out by his
profession as having special knowledge
related to the goods of the transaction
One, not a merchant, who hires a broker
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Open terms OKƦ.gap-filling rules
riceƦreasonable
aymentƦtime and place buyer gets goods
DeliveryƦsellerƞs place of business
TimeƦreasonable
AssortmentƦbuyer can choose
QuantityƦContract usually fails
No contract if too much is left open
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Requirements contract
Ơall we needƦơ
Output contract
ƠAll you produceƦ.ơ
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By promising to ship goods
By shipping goods
Conforming
ƥ Acceptance
Nonconforming
ƥ Acceptance and breach
Accommodation Shipment
Not acceptance, but counteroffer
Must tell buyer that it is accommodation
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Acceptance of Offer
Determines whether a contract is formed
Acceptance of Goods
Assumes that there is a contract, and
amounts to whether the buyer believes
they are conforming goods
Conforming goods are the correct goods
and are not defective
Under common law, no contract
UCC: 2 rules
At least one nonmerchant: new terms are
proposed as additions to the contractƦif
not agreed to, original terms control
The new terms become part of the
contract unless:
Offer limits acceptance to original terms
Additional term materially alter
Offeror objects within a reasonable time
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Under the UCC, no new consideration is
needed.
Must be in writing if, as modified, it
meets the writing requirement
] or more
Written confirmation rule
Both are merchants
There was an oral contract
One confirms this in writing to the other
Other does not object
Writing requirement is met without the
signature
Specially manufactured Goods
Admissions of leadings in Court
art Acceptance (of goods)
Evidence of earlier
agreements/statements excluded if
there is a written agreement
Several Exceptions
roof of Fraud
Gap
Interpretation of Ambiguities
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UCC specifies 3 types of evidence, in priority
order, to clear up ambiguities
Course of performance
ƥ These parties, in this contract
Course of dealing
ƥ These same parties, past contracts with each other
Usage of Trade
ƥ How used in this line of business
Some changes in 23 amendments
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For international contracts, much like
UCC.
Does not apply to consumer transactions
Offers can be irrevocable without a writing
rice (incl. how determined) must be
specified
Mirror image rule applies
