UCC Sale of Goods

Question 1

Common Law vs UCC (Uniform Commercial Code)

Answer 1

Common Law - Real Estate, Services, and Sale of Business
– Acceptance must be the mirror image of the offer or its counter offer

UCC - Sale of all goods (tangible, moveable goods))
– Acceptance with additional terms is ok, not counter offer but a valid acceptance

Question 2

Terms

Answer 2

Merchant - sell goods everyday
Nonmerchant - Sell goods but not everyday

Question 3

Similar Traits between both

Answer 3

• must receive the offer, revocation or rejection to be valid
• mailbox rule applies

Question 4

Different Traits for UCC

Answer 4

Firm offer (similar to option contract)
- does not require consideration
- assurance that it is held open for you (cannot revoke offer)
- only the merchant can make firm offer

Terms can be left open and still have valid agreement
- price (quantity MUST be included)

Modification of Existing Contract
- do not need to give consideration to modify

Statute of Frauds
- Contracts for Sale of Goods $500 or more must be in writing and signed
- exception: Specially manufactured goods
- exception: Oral contract with written confirmation within 10 days with no objection

Trial Sales
- try for xx days
- buyer has possession but not title/ownership
- at end of period, if not returned, title and risk pass to buyer
- personal or household use

Sale or Return
- merchant to merchant use/test
- seller records sale immediately

Question 5

Title and Risk of Loss

Answer 5

FOB
- point of seller’s last point of responsibility

Non-Conforming Goods
- ships the wrong goods
- no title and no risk of loss pass
- buyer can accept or reject, if accepted that buy must pay for what is accepted - even partially
buyer must obey the reasonable instructions until picked up by seller (act in good faith)

Shipping
- seller has no obligation unless shipping is in the contract
- obligation of seller is to hold goods
- Seller/Merchant: passes only when goods are removed from store
- Seller/NonMerchant: risk passes upon tender of delivery (as soon as you pay for it)

Entrustment
- if gone via entrustment, you get good title when you purchase from a merchant - even if it belonged to someone else
- i.e. a company sold something you purchased to someone else - you can get damages but cannot get that item (even if unique) back

Question 6

Warranties

Answer 6

Statute of Limitations
- limitation on time for law suit
- begins when breach arises, not when contract begins

Warranties of Quality
– Express Warranty: statement of fact made by seller that the buyer relies upon (i.e. the product will be like the sample)
- statements made by seller become part of the basis of the bargain (example was guitar played by Eric Clapton)
- cannot provide disclaimer or that would be fraud

– Implied Warranties
- title-ownership: seller warrants good title and rightful transfer
- merchantability: fit and safe for normal use - ONLY for merchant sellers
- fitness for particular purpose: buyer relies on seller’s skill or judgment for solving particular problem buyer has
- DISCLAIMERS: non-title warranties are eliminated by - as is, all sales final, etc / title can only be disclaimed with ‘title’ in the statement

Privity - privilege of contract
- you take on the rights and privilege and the obligations that go along with contracts
- only between the seller and purchaser

Injury
- privity does not apply to injury, can sue anyone in chain of commerce (manufacturer, wholesaler, retailer, consumer, consumer’s friend)
- Must prove
1. defendant was in business of selling the defective product
2. They sold product in a defective way
3. Product was unreasonably dangerous
4. Use of product caused the injury (physical injury not mental)