Sales Flashcards
(29 cards)
Article 2 of the UCC?
Governs the sale of goods. Goods are all things movable at the time they are identified as the goods to be sold under the contract.
Under UCC Article 2, on what grounds can a buyer revoke acceptance of goods?
If they have defects that substantially impair their value, and if the buyer accepted them on the reasonable belief that the defect would be cured but it has not been. And can seek compensatory damages for losses occurred due to defect.
UCC Article 2 - Perfect tender rule
If goods or their delivery fail to confirm to the contract in any way, the buyer may reject all, accept all, or accept any commercial units and reject the rest. Once goods are accepted, the buyer’s power to reject goods is terminated and the buyer is obligated to pay purchase price minus any damages. (reject all, accept all, or accept any commercial units and reject the rest)
UCC Article 2 - Revocation after acceptance
If the goods have a defect that substantially impairs the value and (1) the buyer accepted them on the reasonable belief the defects would be cured and they have not been and (2) the buyer accepted them because of the difficulty of discovering defects or because of the seller’s assurance that the goods conformed to the contract. Revocation must occur within a reasonable time after discovering defects or should have discovered defects.
UCC Article 2 - Implied warranty of merchantability
Goods are fit for the ordinary purposes for which such goods are used.
Warranty damages calculation
buyer may recover the difference between the value of the goods as delivered and the value they would have had if they had if they had been according to contract, plus incidental and consequential damages
Incidental damages
incidental damages from a sellers breach include expenses for caring for rejected goods as well as any other reasonable expense related to the breach
Consequential damages
Special damages specific to the plaintiffs circumstances. These damages may be covered only if at the time the contract was made, a reasonable person would have foreseen the damages as a probable result of a breach. Typically these are profits.
Compensatory Damages (also known as expectation damages)
Put the non breaching party in the position they would have been in had the promise been promised. Two expectation damages measures: (1) cover damages - which is cost of buying replacement goods (2) difference between contract price and market price
UCC Article 2 - Punitive damages
Usually not recoverable unless conduct of seller or manufacturer was fraudulent, malicious, or willful.
What are the elements of a contract ?
Offer, acceptance, and consideration
What is an offer?
Offer is a communication that creates a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms. Its terms should be certain and definite.
What is an essential term in an offer?
Quantity
New terms to a contract?
If merchant - the additional terms will be included in the contract unless they materially alter the original terms of the offer, the offer expressly limits acceptance to the terms of the offer, or the offeror object to the additional terms within a reasonable time.
If not merchant - new terms cancel the original offer and a new counter offer is formed
statute of frauds? Must be in writing
MYLEGS
M marriage
y more than one year
l land
e executor
g goods over $500
s surety
Exception of statute of fraud for goods
Oral contract would be okay - when they are specially manufactured, cannot be resold in the ordinary course of the seller’s business and the seller has made a substantial beginning on performance
Express warranty
Any affirmation of fact or promise made by the seller to the buyer or any description of the goods that creates and express warranty if the statement or description is party of the basis of the bargain
Implied warranty of merchantability
Implied in every sale by a merchant who deals in goods of kind sold. Goods pass without objection in the trade under the contract description, are fit for the ordinary purpose for which such goods are used, and confirm to any promises or affirmations of fact made on the label
Implied warranty of fitness for a particular purpose
seller has reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the sellers skill and judgment to select suitable goods; and the buyer relies in fact relies on the sellers skills or judgment .
Merchant?
A merchant for this purpose is one who regularly deals in goods of the kind sold or who otherwise holds himself out as having special knowledge of skills as to the goods involved.
Disclaimers
Implied warranties of merchantability and fitness for a particular purpose can be disclaimed by expressions such as “as is”. Express warranties are very difficult to disclaim. The UCC requires that disclaimers be construed narrowly so as to preserve al express warranties made by the seller whenever reasonable.
Good faith and Fair Dealing
honesty in fact and the observance of reasonable commercial standards of fair dealing
Fraudulent misrepresentation
asserting information they know is untrue
Revoking sale due to fraudulent mispresentation (rescission of contract)
the contract is voidable by the innocent party is they justifiably relied on the misrepresentation. the time period to bring the action doesn’t begin to fun unto the purchasers knows or should have known of the fraud.
