Contracts Flashcards
(6 cards)
Explain when the UCC governs?
Explain when a contract is formed under the UCC?
The Uniform Commercial Code (UCC) Article 2 governs transactions involving the sale of goods.
Under the UCC, a contract is formed if both parties intend to enter into a contract and there is a reasonably certain basis for giving a remedy. Other than the identity of the parties and subject matter of the agreement, the quantity is the only term essential to forming the contract. As long as the parties intend to create a contract, the UCC “fills the gap” if other terms are missing—e.g., time or place for delivery.
Explain the rule regarding the statute of fraud and the UCC
An oral contract for the sale of goods is valid and enforceable unless the contract is for the sale of goods for $500 or more. In that case, the contract must be in writing and signed by the party to be charged (i.e., the one against whom enforcement is sought) in order to satisfy the SOF and be enforceable. The writing need only be sufficient to indicate that the parties intended to enter into a contract.
Note: A contract for the sale of goods is outside the UCC Statute of Frauds to the extent that goods are received and accepted, and to the extent that payment has been made and accepted.
Explain the rule of what a memo requires to meet the statute of fraud
The UCC requires a memorandum for a sale of goods for $500 or more to (i) indicate that a contract has been made, (ii) identify the parties, (iii) contain a quantity term, and (iv) be signed by the party to be charged. A “signature” is any authentication that identifies the party to be charged—e.g., a letterhead on the memorandum. A mistake in the memorandum or the omission of other terms does not destroy the memorandum’s validity. An omitted term can be proved by parol evidence. However, enforcement of the agreement is limited to the quantity term actually stated in the memorandum.
Explain the Letter or Memorandum of Confirmation exception to the statute of frauds under the UCC.
Define what a merchant is?
Letter or Memorandum of Confirmation.
In contracts between merchants for the sale of goods for $500 or more and a party sends a confirmatory letter/memo that meets the SOF to the other party and the other party knowingly receives the memo and does not object in writing within 10 days, the contract is enforceable against the receiving party (if it is enforceable against the sending party), even though the receiving party did not sign the memo.
A merchant is a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.
Explain the rule regarding when an offer can be revoked under the UCC
Explain the rule regarding Firm Offers -when is it irrevocable?
In what over circumstance (aside from a firm offer under the UCC) may an offer be irrevocable?
In general, an offer can be revoked by the offeror at any time prior to acceptance.
Under the UCC firm offer rule, an offer to buy or sell goods is irrevocable if: (i) the offeror is a merchant, (ii) there is an assurance that the offer is to remain open, and (iii) the assurance is contained in a signed writing from the offeror. A firm offer in a form prepared by the offeree, however, must be separately authenticated by the offeror to protect against inadvertent signing.
It is still possible for an offer to be irrevocable if the offeree reasonably and detrimentally relies on the offeror’s promise prior to acceptance. It must have been reasonably foreseeable that such detrimental reliance would occur in order to imply the existence of an option contract.
Explain how and offer can be revoked
An offer is revoked when the offeror makes a manifestation of an intention not to enter into the proposed contract before the offeree accepts. A revocation may be made in any reasonable manner and by any reasonable means, and it is not effective until communicated. Under the UCC, a person receives notice of revocation when (i) it comes to that person’s attention, or (ii) it is duly delivered in a reasonable form at the offeree’s place of business.
