Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ACC 473 > Chapter 20: The Formation of Sales and Lease Contracts > Flashcards

Chapter 20: The Formation of Sales and Lease Contracts Flashcards

1
Q

UCC

A

Uniform Commercial Code.
Facilitates commercial transactions from start to finish

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

UCC Article 2: Sales of Goods

A
  1. Modifies common law of contracts in some areas
  2. UCC2 preempts common law
  3. Where UCC2 is silent, common law governs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Common law requirements for sales contract

A

Offer and acceptance, consideration, capacity and legality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Sale

A

Passing of title of “goods” to/from a seller/buyer for a price (money, goods, services, etc.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Goods

A

Tangible and movable

NOT stocks, bonds copyrights, and ordinary contract rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What does UCC2 not apply to

A

Real estate, unless there is a “good” that can be severed by the seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Contracts for sale of minerals or structure

A

Sale of goods if severance or separation is to be made by seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Contracts for sale of growing crops or timber to be cut

A

Sale of goods regardless of who severs them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Other “things attached” to real property

A

Must be capable of severance without material harm to land are goods regardless of who severs them (ex: window air conditioner)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

T/F: Contracts for service are not governed by UCC2

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Predominant-factor test

A

If courts find primarily a goods contract, any dispute, even over service portion, will be decided under UCC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Merchant

A

Has business expertise and is not a casual buyer/seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Merchant status arises when:

A
  1. Deals in goods of the kind involved in the sales transaction
  2. Holds self out, by occupation, as having knowledge/skills unique to goods involved
  3. Employs a merchant as a broker, agent or intermediary in the sales transaction
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Leases

A

A right to possess and use goods for a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Lease agreement

A

Lessor and lessee’s bargain (expressed or implied) with respect to the lease of goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Lessor

A

Transfers right to possession and use of the goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Lessee

A

Acquires right to possession and use of the goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Consumer Leases (under UCC2A)

A
  1. A lessor who regularly engages in the business of leasing or selling
  2. A lessee (except an organization) who lease goods primarily for a personal, family or household purpose
  3. Total lease payment are less than $25,000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Finance Leases

A
  1. Involves a lessee lessor and supplier
  2. Lessor is financing the transactions (Either buys or leases goods from supplier, then either leases or subleases the goods to the lessee.)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

When does UCC come into play

A

When parties fail to provide for a contingency in their contract which later becomes a dispute or wish to change the effect of the UCC’s terms in the contract’s application

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Difference between common law contracts and UCC contracts

A

UCC is more flexible than common law. UCC allows for open pricing, payment, and delivery terms. Agreement can exist even if the moment of making these terms is undetermined

22
Q

Open Terms is okay if

A
  1. The parties intended to make a contract
  2. There is a reasonable basis for a court to grant a remedy
23
Q

Open-term provisions

A

Used to fill in gaps in a contract. If a dispute occurs, all that is necessary to prove the existence of a contract is an indication that there is a contract.

24
Q

Open Price Term

A

Court can determine “reasonable price at the time of delivery”. Price has to be fixed in good faith, which means honesty in fact and the observance of reasonable commercial standards

25
Q

Open Payment Term

A

Unless otherwise agreed, payment is due at time and place buyer is to receive the goods

26
Q

Open Delivery Term

A

Unless otherwise agreed, buyer takes delivery at the Seller’s place of business

27
Q

If seller has no place of business, where is deliver

A

At seller’s residence

28
Q

Open Quantity

A

Courts will not impose a quantity and will not enforce a contract

29
Q

Open Quantity Exception

A
  1. Requirements contract, where buyer agrees to purchase, and seller agrees to sell all goods the buyer needs or requires. Buyer gives up rights to buy from anyone else (counts as consideration)
  2. Output contract, where seller agrees to sell and buyer agrees to buy all goods that seller produces. Seller gives up right to sell to another buyer (counts as consideration)
30
Q

Merchant’s Firm Offer (Common Law)

A

An offer could be revoked any time prior to acceptance, unless there was some consideration to keep offer open i.e. option contract

31
Q

Merchant’s Firm Offer (UCC)

A

Offer made by merchant in a signed writing (electronic record) is irrevocable for either period specified or a reasonable period of time. No consideration necessary

32
Q

Acceptance (Common Law)

A

If offer is accepted by any means other than specified in contract, it is normally considered a counteroffer

33
Q

Acceptance (UCC)

A

Any reasonable means of acceptance under the circumstances is permissible

34
Q

Acceptance (breach)

A

Shipment of non-conforming goods is both an acceptance and a breach unless goods are sent as an “accommodation” to buyer. Accommodations are counteroffer, not an acceptance

35
Q

Acceptance: Additional Terms (Common law)

A

Mirror image rule: Accepting contract EXACTLY how it is offered

36
Q

Acceptance: Additional Terms (UCC)

A

If offeree’s response indicates a definite acceptance, a contract is formed. Treatment of additional term or change in terms is dependent on whether parties are merchants or non-merchants

37
Q

If either party is a non-merchant

A

The contract is formed according to original terms of the offer

38
Q

If both parties are merchants

A

Additional terms automatically become part of the contract

39
Q

Exceptions to additional terms when both parties are merchants

A
  1. Original offer expressly limits acceptance to its terms
  2. New or changed terms materially alter the contract
  3. Offeror objects to the new or changed terms within a reasonable period of time
40
Q

When is an offeree’s response not acceptance

A

If contract contains additional or different terms and is expressly conditioned on the offeror’s assent to those terms, regardless of whether parties are merchants (a counter-offer)

41
Q

Consideration under UCC

A

Is required, but modification does not require new consideration, needs to be made in good faith and in writing if $500+, must also indicate quantity

42
Q

Written, email, or other electronic record is sufficient to meet UCC statute of frauds if

A
  1. Indicated parties intended to form a contract
  2. Signed by party against whom enforcement is sought
  3. Normally not enforceable beyond quantity of goods shown in the writing (other terms can be proven by oral evidence)
43
Q

Merchants can satisfy writing requirement by:

A
  1. One of the merchants must send a signed written confirmation (email) to the other merchant
  2. The communications must indicate the term of the agreement
  3. Merchant receiving it must have reason to know of the contents
  4. Merchant has 10 days after receipt to send a written objection
44
Q

Exceptions to Statute of Frauds

A
  1. Specially manufactured goods
  2. Admissions by breaching party
  3. Partial performance
45
Q

Specially Manufactured Goods

A

Not suitable for resale. Seller has substantially started manufacturing goods

46
Q

Admissions by breaching party

A

Enforceable to quantity admitted

47
Q

Partial performance

A

Enforceable if payment is made and goods have been received and accepted.
Enforceable to the extent of performance

48
Q

Parol Evidence (Under Common Law)

A

Terms of a written agreement intended to be the final expression of parties’ intentions, cannot be contradicted by prior or contemporaneous agreements

49
Q

Parol Evidence Exceptions under UCC

A

Terms may be explained or supplemented by
1. Consistent additional terms (clarify ambiguous terms)
2. Course of dealing (commercial practices
3. Usage of trade
4. Course of performance

50
Q

Rules of Construction

A

Rules are to be construed together as long as they do not contradict each other

51
Q

Unconscionability

A

Contract is one that is so unfair and one-sided it is unreasonable to enforce it

52
Q

Unconscionability under UCC

A
  1. Refuse to enforce contract
  2. Enforce remainder of contract and not unconscionable clause
  3. Limit application of unconscionable terms to avoid an unconscionable result

ACC 473 (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions