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Chapter 11:
Contracts for
the Sale of
Goods
cc licensed ( BY ) flickr photo by
public.resource.org:
http://flic.kr/p/KEtQE
Contract rules
cc licensed ( BY SD )
flickr photo by wit:
http://flic.kr/p/4H7rfe
Statute of Frauds
icensed ( BY NC ) flickr photo by Indiana Public Media:
p://flic.kr/p/8vqJgq
Mailbox Rule
cc licensed ( BY ND ) flickr
photo by samantha celera:
http://flic.kr/p/9mWbdp
Peppercorn Rule
Where did these names come from?
Common law of contracts
Potential problems?
cc licensed ( BY ) flickr photo by Marxchivist: http://flic.kr/p/oubjG
What if you do business in many
states?
Solutions?
cc licensed ( BY NC ND ) flickr photo by philippe leroyer: http://flic.kr/p/PL1RE
Uniform Commercial Code
• First published 1952
• National Conference of Commissioners on
Uniform State Laws (NCCUSL)
• Ena...
UCC Art. 2: Sales of Goods
• Adopted by every state except Louisiana
• Covers sales
– not rentals or leases
• Covers goods...
Offers
• Common law: definite terms
• price
• payment
• delivery
• quantity
Common law:
Do we have a contract?
Terms?
Quantity?
Delivery?
Payment?
Price?
No definite terms?
No contract.
UCC: Open terms
• price
• payment
• delivery
• quantity
Price?
• Reasonable price at time of delivery
Payment?
• Due at time and place of delivery
Delivery?
• At seller's place of business (or residence)
• In a reasonable time
Quantity?
• ???
• Can't be open
• Except:
– Requirements contract
– Output contract
Merchant's firm offer
• written offer by merchant stating time it will
remain open cannot be revoked
Merchant?
• Buys & sells goods for a living
Different rules for contracts between
merchants
cc licensed ( BY ) flickr photo by keith ellwood: http://flic.kr/p/bvAyBp
Mirror-Image Rule
Common law?
• Any change in terms is a counter-offer
• Rejects original
• No contract
UCC
• w/ nonmerchant:contract is formed according
to original terms
• between merchants: additional terms are part
of cont...
Statute of Frauds
Between merchants
• written confirmation sent to other party
satisfies SOF if other merchant does not send
written rejecti...
Exceptions to statute of frauds
• specially mfd. goods
– specially manufactured for buyer
– not suitable for resale to oth...
Modifications to contracts
• Common law: new consideration required
(MOO)
• Between merchants no consideration needed
Remedies
• Common law: money damages
• UCC
– Withhold delivery
– Demand cash if buyer insolvent
– Re-sell goods
– Cancel
–...
Warranties
• title
• express
• implied
– merchantability
– fitness for a particular purpose
©al.com 2014
http://www.al.com/sports/index.ssf/2014/03/tuscaloosa_hosts_the_second-an.html
cc licensed ( BY SD ) flickr photo by
planetc1: http://flic.kr/p/aEUKua
cc licensed ( BY ) flickr photo by duh.denise: http://flic.kr/p/91nsSH
cc licensed ( BY NC SD ) flickr photo by eston:
http://flic.kr/p/vLsR2
cc licensed ( BY NC SD ) flickr photo by Joachim S.
Müller: http://flic.kr/p/5cNmMF
Risk of Loss
cc licensed ( BY NC SD ) flickr photo by Melinda Taber: http://flic.kr/p/cYLXa
cc licensed ( BY NC ) flickr photo by mrswanks:
http://flic.kr/p/xCfcx
risk of loss
• title vs. possession
• doesn’t necessarily follow title
• Generally, risk follows goods
Delivery terms?
• Shipment contract?
• Destination contract?
cc licensed ( BY NC ND ) flickr photo by Gestalteando: http://flic.kr/p/5cgfau
Shipment contract
(default under UCC)
cc licensed ( BY NC ND ) flickr photo by debcll: http://flic.kr/p/4Aw2La
Destination Contract
Performance
• tender of delivery: seller must have
conforming goods available for buyer to take
delivery
• perfect tender ...
Non-conforming goods
• buyer's remedies:
– accept
– reject
– accept part/reject part
• Cure
BUS 263 class slides, March 11, 2014
BUS 263 class slides, March 11, 2014
BUS 263 class slides, March 11, 2014
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BUS 263 class slides, March 11, 2014

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Class slides from March 11, 2014

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Transcript of "BUS 263 class slides, March 11, 2014"

  1. 1. Chapter 11: Contracts for the Sale of Goods cc licensed ( BY ) flickr photo by public.resource.org: http://flic.kr/p/KEtQE
  2. 2. Contract rules
  3. 3. cc licensed ( BY SD ) flickr photo by wit: http://flic.kr/p/4H7rfe Statute of Frauds
  4. 4. icensed ( BY NC ) flickr photo by Indiana Public Media: p://flic.kr/p/8vqJgq Mailbox Rule
  5. 5. cc licensed ( BY ND ) flickr photo by samantha celera: http://flic.kr/p/9mWbdp Peppercorn Rule
  6. 6. Where did these names come from?
  7. 7. Common law of contracts
  8. 8. Potential problems?
  9. 9. cc licensed ( BY ) flickr photo by Marxchivist: http://flic.kr/p/oubjG
  10. 10. What if you do business in many states?
  11. 11. Solutions?
  12. 12. cc licensed ( BY NC ND ) flickr photo by philippe leroyer: http://flic.kr/p/PL1RE
  13. 13. Uniform Commercial Code • First published 1952 • National Conference of Commissioners on Uniform State Laws (NCCUSL) • Enacted in part by all 50 states • Enacted in entirety by 49 states • Modifies and standardizes common law
  14. 14. UCC Art. 2: Sales of Goods • Adopted by every state except Louisiana • Covers sales – not rentals or leases • Covers goods – tangible, moveable property – not land – not intangibles
  15. 15. Offers • Common law: definite terms • price • payment • delivery • quantity
  16. 16. Common law: Do we have a contract?
  17. 17. Terms?
  18. 18. Quantity?
  19. 19. Delivery?
  20. 20. Payment?
  21. 21. Price?
  22. 22. No definite terms? No contract.
  23. 23. UCC: Open terms • price • payment • delivery • quantity
  24. 24. Price? • Reasonable price at time of delivery
  25. 25. Payment? • Due at time and place of delivery
  26. 26. Delivery? • At seller's place of business (or residence) • In a reasonable time
  27. 27. Quantity? • ??? • Can't be open • Except: – Requirements contract – Output contract
  28. 28. Merchant's firm offer • written offer by merchant stating time it will remain open cannot be revoked
  29. 29. Merchant? • Buys & sells goods for a living
  30. 30. Different rules for contracts between merchants
  31. 31. cc licensed ( BY ) flickr photo by keith ellwood: http://flic.kr/p/bvAyBp Mirror-Image Rule
  32. 32. Common law? • Any change in terms is a counter-offer • Rejects original • No contract
  33. 33. UCC • w/ nonmerchant:contract is formed according to original terms • between merchants: additional terms are part of contract unless: – original offer expressly limited to its terms – new terms materially alter the contract – offeror objects to new terms w/in a reasonable time
  34. 34. Statute of Frauds
  35. 35. Between merchants • written confirmation sent to other party satisfies SOF if other merchant does not send written rejection in 10 days
  36. 36. Exceptions to statute of frauds • specially mfd. goods – specially manufactured for buyer – not suitable for resale to others in the ordinary course of business • seller has substantially begun to manufacture or made commitments • admissions in pleadings, testimony, or court proceedings • partial performance: payment made or goods accepted
  37. 37. Modifications to contracts • Common law: new consideration required (MOO) • Between merchants no consideration needed
  38. 38. Remedies • Common law: money damages • UCC – Withhold delivery – Demand cash if buyer insolvent – Re-sell goods – Cancel – Stop in transit – Reclaim goods
  39. 39. Warranties • title • express • implied – merchantability – fitness for a particular purpose
  40. 40. ©al.com 2014 http://www.al.com/sports/index.ssf/2014/03/tuscaloosa_hosts_the_second-an.html
  41. 41. cc licensed ( BY SD ) flickr photo by planetc1: http://flic.kr/p/aEUKua
  42. 42. cc licensed ( BY ) flickr photo by duh.denise: http://flic.kr/p/91nsSH
  43. 43. cc licensed ( BY NC SD ) flickr photo by eston: http://flic.kr/p/vLsR2
  44. 44. cc licensed ( BY NC SD ) flickr photo by Joachim S. Müller: http://flic.kr/p/5cNmMF Risk of Loss
  45. 45. cc licensed ( BY NC SD ) flickr photo by Melinda Taber: http://flic.kr/p/cYLXa
  46. 46. cc licensed ( BY NC ) flickr photo by mrswanks: http://flic.kr/p/xCfcx
  47. 47. risk of loss • title vs. possession • doesn’t necessarily follow title • Generally, risk follows goods
  48. 48. Delivery terms? • Shipment contract? • Destination contract?
  49. 49. cc licensed ( BY NC ND ) flickr photo by Gestalteando: http://flic.kr/p/5cgfau Shipment contract (default under UCC)
  50. 50. cc licensed ( BY NC ND ) flickr photo by debcll: http://flic.kr/p/4Aw2La Destination Contract
  51. 51. Performance • tender of delivery: seller must have conforming goods available for buyer to take delivery • perfect tender rule – right to cure – commercial impracticability – destruction of identified goods – cooperation
  52. 52. Non-conforming goods • buyer's remedies: – accept – reject – accept part/reject part • Cure
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