Article Two Flashcards
Does Article Two apply?
Art. 2 applies to the sale of goods.
What is a sale?
A sale is the passing of title from seller to buyer for a price.
What are goods?
Goods are things (tangible items) that are movable at the time identification to the contract.
BUT, does Art. 2 apply?!
What do we do to determine that if there is a dispute between whether the K dealt with goods or services?
Art. 2 applies generally to the sale of goods and if there is a mixed goods/services K, we look to the predominant purpose of the K.
What are the factors to the PPT?
Factors used to assess the PPT include
(1) the language of the K;
(2) the nature of the business and the supplier;
(3) the intrinsic worth of the materials ($);
(4) the circumstances of the parties; and
(5) the primary objective they hoped to achieve by entering into the K (the reason).
~Lany natures $ with circumstance and reason.~
Is there a different way of determining whether Art. 2 applies, besides the PPT?
Under the Gravamen test, we look to the substance of the complaint to determine if Article 2 applies. If the substance relates to the goods, then Article 2 applies, otherwise the common law applies.
Was there an offer / what is an offer?
An offer is the manifestation of intent to enter into an agreement so that the offerree knows their assent is desired and will finalize the agreement.
An offer is (1) a manifestation of intent to contract by one party, (2) with definite or reasonably certain terms, (3) that is communicated to an identified offeree.
Was there acceptance / what is acceptance?
Implied: what is a counter offer?
Common law acceptance = manifestation of assent to the terms of the offer in the manner required by the offeree
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.
A counteroffer is a rejection of an offer by manifesting intent to enter into a new/different bargain
Was a K formed / how do you tell if a K is formed?
K may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract
K = O + A + C
Consideration = bargained for exchange and legal value
What are the terms of the K?
Implied: what/who is a merchant?
Merchant = one who deals in goods of the kind
Different answers whether the terms are additional or differing.
Additional terms between merchants become part of the K (auto add) unless the offer expressly limits acceptance to its terms, they alter it, notification of objection
~Elma, no!~
Majority rule, different terms knock each other out and are replaced by gap fillers
Minority rule, different terms are treated like additional terms where, between merchant, become part of the K unless offer expressly limits acceptance to its terms, they alter it, notification of objection.
~Elma, no!~
Again, is the (additional term) part of the K?
When we have a consumer K, additional terms are construed as proposals for addition to the K.
They do not automatically come in as they would if the parties were both merchants.
Is the (differing term) part of the K? (Majority Rule)
Implied: Fair Price Rule
Under the majority rule, when an acceptance differs from the offer, the terms are knocked out and replaced by UCC gap fillers.
Under the UCC gap fillers, if the price is missing, then the price will be what would be reasonable under the circumstances.
Is the (differing term) part of the K? (Minority Rule)
Under the minority rule, when an acceptance differs from the offer, we treat the different terms the same as we would additional terms.
When we have a consumer K, additional terms are construed as proposals for addition to the K.
Is the (additional term) part of the K? Assume both parties are merchants.
When we have an acceptance that has additional terms from the offer and BOTH PARTIES ARE MERCHANTS, the terms automatically become part of the K unless
(1) they materially alter it,
(2) the offer limits acceptance to its terms, or
(3) notice of objection was given within a reasonable time.
Note: arbitration provisions materially alter a K.
Is the (differing term) part of the K? Assume both parties are merchants. Majority Rule, first.
Under the majority rule, when an acceptance differs from the offer, the terms are knocked out and replaced by UCC gap fillers regardless of the merchant/consumer status of the parties.
Is the (differing term) part of the K? Assume both parties are merchants. Now, the minority rule.
Under the minority rule, when an acceptance differs from the offer, we treat the terms the same as we would additional terms.
When we have an acceptance that has additional terms from the offer and the parties are merchants, the terms automatically become part of the K unless:
(1) they materially alter it,
(2) offer expressly limits acceptance to its terms; or
(3) notice of objection was given within a reasonable time.
~Elma, no!~
When does a clause materially alter a K?
Note: a clause materially alters the K if it would result in unreasonable surprise or hardship for the buyer.
Was there a breach of K / did X party breach?
Implied: Perfect Tender Rule
This implies a deviation from the K terms.
Perfect tender rule: Any deviation from agreed upon terms of the contract, buyer may reject all, accept all, or reject/accept any commercial unit
For add’l/diff. terms, look at the analysis for those again, and then see what the parties did by conduct.
