UCC Tested Topics

Question 1

Intent to Form K Under UCC

Answer 1

UCC requires very little in terms of subjective intention to form a K for the sale of goods

Question 2

Are Electronic Signatures Effective?

Answer 2

Yes, the Uniform electronic transactions act, as adopted by VA, renders an electronic signature effective

(and the Federal E-sign act makes electronic signatures effective notwithstanding any state law to the contrary)

Question 3

Test to determine whether transaction is subject to the UCC

Answer 3

Predominant Purpose Test/Rule

Question 3

Predominant Purpose RUle

Answer 3

was predominant purpose of K one for goods or services??? Look to the amount paid for goods as opposed to amount paid for services

Question 4

Is a fixture governed by the UCC?

Answer 4

No, a fixture is a good permanently affixed to realty and thus is not govnd under the UCC

Question 5

Statute of Frauds

Answer 5

K for goods over $500 must be in writing

Question 6

General Exceptions to SOF

Answer 6

specifically manufactured goods and when performing party partially performs

Question 7

Part performance exception

Answer 7

To the extent a K has already been performed in good faith, it may become enforceable despite lack of traditional writing compliant w SOF, for the same reason as the “specifically manufactured goods” exception: to prevent fraud and avoid wrongly penalizing an innocent commercial party

Question 8

Merchant’s Confirmatory Memo

Answer 8

A writing that re-states the terms that two merchants previously agreed to orally used to make a contract valid despite lacking a writing under the Statute of Frauds

Question 9

Merchant’s confirmatory memo is valid against sender if

Answer 9

party receiving it has reason to know its contents unless written notice of objection to its contents is given within 10 days after it is received

Question 10

Express Warranty

Answer 10

Any promise, affirmation, description or sample that is part of the basis of the bargain is an express warranty unless it is merely the seller’s OPINION or COMMENDATION of the good’s value

Question 11

Are Maintenance records an express warranty?

Answer 11

yes, in that they are an “affirmation of fact or promise made by seller to buyer which relates to the goods and becomes part of the basis of the bargain”

Question 12

Express warranty? “car is the finest GTO you will ever see”

Answer 12

No, puffery/sales talk

Question 13

Implied Warranty of Merchantability

Answer 13

Warranty that goods are merchantable is implied in a K for their sale whenever the seller is a merchant w respect to goods of that kind

Question 14

To be merchantable, goods must be

Answer 14

fit for their ordinary purpose and pass w/o objection in the trade under the K description

Question 15

When must breach of warranty be present

Answer 15

at time of sale

Question 16

How to Disclaim Implied Warranty of Merchantability

Answer 16

seller may disclaim implied warranty of merchantability by using term “merchantability”

–May be done orally or conspicuous in writing

–implied warranty of merchantability can also be disclaimed by use of “as is” “without faults” or similar language

Question 17

Implied Warranty of Fitness for Particular Purpose

Answer 17

Where seller at time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is an implied warranty that goods shall be fit for such purpose

Question 18

Disclaimer for Implied Warranties Must Be

Answer 18

Disclaimer must be conspicuous and noticeable by “a reasonable person against which is to operate”

Question 19

Unless circumstances indicate otherwise, all implied warranties are excluded by expressions like

Answer 19

“as is” “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain there is no implied warranty

Question 20

Defense to Formation/Warranty: Fraud in the Inducement

Answer 20

common law remedies, including fraud, are available under UCC

Question 21

Fraud in the Inducement Definition

Answer 21

Intentional misrepresentation of material fact not discoverable by reasonable inspection that is relied upon by buyer to their detriment and damages occur

Question 22

Requisites of Revocation of Acceptance

Answer 22

1) Goods’ nonconformity substantially impairs value;

2) Acceptance was reasonably induced by the difficulty of discovering the nonconformity before acceptance or by the seller’s assurance to cure;

3) Buyer gave notice of revocation within reasonable time after discovering the nonconformity and before any substantial change in condition of the goods not caused by their own defects

Question 24

Buyer cannot revoke acceptance if they engage in

Answer 24

Significant and avoidable use of the goods after notice of revocation bc its an exercise of ownership over goods

Question 25

Lack of Privity is NOT a Defense to Breach of Warranty IF:

Answer 25

P is person seller might reasonably have expected to use, consume or be affected by the goods

Question 26

Incidental Damages

Answer 26

Commercially reasonable expenses incurred bc of other party's breach

Question 27

Example of Incidental Damages

Answer 27

purchasing equipment for performance that you otherwise would not have

Question 28

Consequential damages are used to compensate for losses that

Answer 28

do not flow directly and immediately from the other party's breach--so long as the losses are not too speculative

Question 29

Consequential Damages Ex

Answer 29

A. Missed opportunity like an interview bc of other party's breach B. Any limitation of consequential damages for personal injuries is unconscionable and therefore invalid

Question 30

Expectation damages

Answer 30

damages that arise naturally and obviously from the breach

Question 31

Reliance damages

Answer 31

foreseeable expenses that the nonbreaching party incurred in reasonable reliance on the promise that the other party would perform

Question 32

Punitive damages

Answer 32

Rarely available in K --unless compensatory damages are awarded and the seller's conduct constitutes a willful, independent tort

Question 33

Buyer may demand Specific Performance for

Answer 33

Rare/Unique goods or in a breach of K claim when there is not another convenient supplier

Question 34

Under VA law, a party seeking specific performance must demonstrate

Answer 34

there is no adequate remedy at law and terms of the K sought to be enforced are sufficiently definite

Question 35

Detinue (UCC) is a legal claim that allows buyer to recover ___, ___ ___ from seller if 1) ___ 2) ___ 3)

Answer 35

Legal claim that allows a buyer to recover identified, undelivered goods from seller if 1) buyer is unable to effect cover 2) circumstances reasonably indicate that reasonable effort to obtain cover will be unavailing or 3) goods have been shipped under reservation….and satisfaction of the security interest in the goods has been made or tendered

Question 36

Is there consideration in a Requirements K?

Answer 36

Yes bc buyer suffers a legal detriment in foregoing purchasing product from another source while seller agrees to provide buyer with as much of the product as buyer needs, foregoing sales to other potential buyers

Question 36

Requirements K

Answer 36

An agreement wherein one party agrees to supply all a party's requirements for a particular product or service and other party agrees to purchase all the particular products or services that it requires from supplying party

Question 37

Requirements K: Good Faith

Answer 37

good faith is required in requirements K

Question 38

Misrepresentation Defense: A Misrepresentation is an assertion that is____ ____ _______ ____ and can be ____ _____ or _____

Answer 38

contrary to the existing facts and can be innocent, negligent or fraudulent

Question 39

Consequence of Misrepresentation

Answer 39

may prevent formation of the K or make the K voidable by adversely affected party

Question 40

If K is for goods and K does not explicitly allocate risk of loss, then risk of loss passes to

Answer 40

buyer when goods are duly delivered to carrier

Question 41

Which warranties cannot be exclaimed

Question 42

What happens when additional terms materially alter agreement

Answer 42

Such terms do not become apart of the K

Question 43

Terms materially alter K if

Answer 43

There is hardship through significant shifting of the burden or surprise… if new term is vastly different from or conflicts with old terms

Question 44

Implied warranty of merchantability

Answer 44

Implied warranty by merchant that goods are fit for their ordinary purpose

Question 45

What is the measure of damages when buyer rejects goods for lateness?

Answer 45

Difference between the market value of the goods and the contract price, plus any lost profits

Question 46

(Damages) When buyer receives non conforming goods he may

Answer 46

keep the goods and to recover damages “for any loss” resulting from the breach, including lost profits

Question 47

When must K be performed when parties have not set a performance date?

Answer 47

within a reasonable time

Question 48

installment k

Answer 48

single k completed by a series of performances

Question 49

Goods in an Installment k can be rejected for late delivery only if

Answer 49

late delivery substantially impairs the value of the installment

Question 50

Usage of Trade Terms

Answer 50

sales contracts may use terms that are generally accepted in trade usage, when such terms should be reasonably understood by the parties.

Question 51

How can a buyer in an installment K can cancel the K?

Answer 51

Value of the goods is substantially impaired. Buyer must do so within a reasonable time and must give notice to the seller.

Question 52

Damages in an installment K

Answer 52

difference between market value of goods and K price, plus lost profits

Question 53

When buyers recognize goods will be late in delivery they may be required be required to

Answer 53

attempt to mitigate by obtaining goods elsewhere and selling them. However, where seller continues to make assurances that delivery is coming and K will be fulfilled, buyers are not required to cover elsewhere

Question 54

What is buyer's recourse where buyer has accepted non-conforming goods?

Answer 54

Keep goods, attempt to sell them and mitigate any loss, and then recover damages for any loss resulting from the breach, including lost profits

Question 55

Buyer's right to reject nonconforming goods

Answer 55

buyer may reject non-conforming goods that substantially impair the value or if impairment is discovered after the goods are accepted, may revoke where acceptance was induced by difficulty of discovering the defect