BL Ch 20

Course of performance

The conduct that occurs under the terms of a particular agreement; such conduct indicates what the parties to an agreement intended it to mean.

Sale

The passing of title (evidence of ownership rights) from the seller to the buyer for a price

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was created in

1980

Sales Contract

A contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price.

The CISG is similar to __ of the UCC

Article 2

Only a handful of countries have adopted the CISG.

F

The Uniform Commercial Code (UCC) views a sale of goods as:

a single, multifaceted legal occurrence.

The Uniform Commercial Code has been adopted by:

all of the states in whole or in part

Choice-of-law Clause

A clause in a contract designating the law (such as the law of a particular state or nation) that will govern the contract.

Choice-of-language Clause

A clause in a contract designating the official language by which the contract will be interpreted in the event of a future disagreement over the contract's terms.

Merchant

A person who is engaged in the purchase and sale of goods. Under the Uniform Commercial Code, a person who deals in goods of the kind involved in the sales contract.

predominant-factor test

A test courts use to determine whether a contract is primarily for the sale of goods or for the sale of services.

The common law of contracts and the Uniform Commercial Code are exactly the same.

F

Under the CISG, an acceptance is effective on dispatch, similar to the rule under the UCC.

F

Course of dealing

Prior conduct between parties to a contract that establishes a common basis for their understanding.

Tangible Property

Property that has physical existence and can be distinguished by the senses of touch and sight.

If an additional term relates to payment, quality, quantity, price, time, and place of delivery, the CISG considers the added terms as material alterations.

T

In contracts that involve the sale of both goods and services, once a court decides that such a contract is primarily a goods contract, any dispute, even over the services portion, will be decided under the UCC.

T

The CISG provides that an offer will be irrevocable if the offeror states orally that the offer is irrevocable or if the offeree reasonably relies on the offer as being irrevocable.

T

What is NOT one of the requirements for a merchant's firm offer?

The offer must state the date for all future shipments. IS:: The offer must be written or electronically recorded, such as in an e-mail and must be signed

Force Ma

a provision in a contract stipulating that certain unforeseen events (ex: war) will excuse a party from liability for nonperformance of contractual obligations

When one party sends an acceptance to an offer that adds terms to the offer, and one or both parties are nonmerchants, the additional terms:

are not a part of the contract

When two merchants are entering into a contract and the offeree adds terms to the contract, they __ become part of the contract unless the original offer expressly __ acceptance to the terms of the offer, the new or changed term(s) __ alter the contract, or the offeror __ to the new or changed terms within a __ period of time

automatically, limited, materially, objects, reasonable

The UCC provides rules of construction for interpreting contracts. When the court considers a construction unreasonable, the UCC establishes the following order of priority. Which of the following expresses the correct order of priority?

express terms, course of performance, course of dealing, usage of trade

The UCC states that a sales or lease contract will not fail for indefiniteness even if one or more terms are left open as long as the parties __ to make a __, and there is a __ certain basis for the __ to grant an appropriate __. [UCC 2-204(3), 2a-2041(3)]

intended, contract, reasonably, court, remedy

A merchant is a person who deals with goods of the kind __ the sales contract. A merchant is a person who, by occupation, holds himself or herself out as having __ and skill unique to the practices or goods involved in the transaction. This broad definition may include banks or universities as merchants.

involved in, knowledge

In order to accept a contract by shipment without breaching the contract, the seller:

must ship conforming goods

An oral contract for the sale of custom-made goods will be enforceable if the goods are specially manufactured for a __ buyer, are not __ for resale to others in the __ course of the seller's business, and the seller has __ started to manufacture the goods.

particular, suitable, ordinary, substantially

Because of the CISG rules, businesspersons undertaking international sales transactions __ draft specific forms to suit the needs of the particular transaction.

should

A person who employs a merchant as a broker, agent, or other intermediary has the __ of a merchant in that transaction.

status

In order for the rules contained in the UCC to apply to a contract for the sale of goods, the goods must be

tangible

Article 19 of the CISG provides that a contract may be formed even though an acceptance contains additional terms, unless

the additional terms materially alter the contract

In commercial transactions, when both parties are merchants and are using form contracts, there is a risk of conflicting terms. This is known as

the battle of the forms

Fully integrated contract

when a contract completely sets forth all the terms and conditions agreed to by the parties and is intended as a final statement of their agreement

Intangible Property

Property that is incapable of being apprehended by the senses (such as by sight or touch); intellectual property is an example of intangible property.

When merchants are involved in commercial sales transactions, they are held to special business standards. When nonmerchant buyers or sellers are involved:

they are held to less demanding standards than merchants.

Unlike the UCC, the CISG does not apply to consumer sales.

T

Sales contracts between parties residing in the United States and foreign countries are typically governed by the:

United Nations Convention on Contracts for the International Sale of Goods (CISG).

What is the one requirement that is NOT necessary for a writing (or electronic record) to be sufficient to satisfy the UCC's statute of frauds?

a notary public's signature IS: An indication that the parties intended to form a contract A signing by the party against whom enforcement is sought

Article 2 of the UCC governs

contracts for the sale of goods

When a contract fails to specify a price, either because the parties have not agreed or the price is to be set by one of the parties later in good faith, then a court will:

determine a reasonable price at the time for delivery.

Article 2 deals with the sale of __. It does not deal with real property (real estate), services, or __ property such as stocks and bonds. Thus, if the subject matter of a dispute is goods, the UCC governs. If it is real estate or services, the __ law applies. If a contract involves both goods and services, the courts generally use the __ test to determine whether to apply the UCC.

goods, intangible, common, predominant-factor

Lease agree

in regard to the lease of goods, an agreement in which one person (lessor) agrees to transfer the right to the possession and use of the property to another (lessee) in exchange for rental payments

Under the CISG, a writing

is not required at all for the sale of goods

A consumer lease is a special type of lease where the lessor __ engages in the __ of leasing or selling, the lessee (except organization) leases the goods "__ for a personal, __ or household purpose," and the total lease __ are less than a dollar amount set by state statute.

regularly, business, primarily, family, payments

Requirements Contract

An agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires.

Output Contract

An agreement in which a seller agrees to sell and a buyer agrees to buy all or up to a stated amount of what the seller produces.

Usage of Trade

Any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question.

A buyer promises to purchase only what he or she needs so that the promise constitutes a requirements contract.

F

Because contracts for the sales of goods are so prevalent, acceptance of UCC contracts can only be done by a written document.

F

Output and requirements contracts are basically the same thing.

F

When a court determines that a contract was unconscionable at the time that it was made, the UCC allows all of the following EXCEPT one:

make the parties go through with the contract, no matter what ALLOWS: refuse to enforce the contract, enforce the remainder of the contract without the unconscionable part, limit the application of the unconscionable term to avoid an unconscionable result.

Lessee

one who acquires the right to the possession and use of goods under a lease

Lessor

one who transfers the right to the possession and use of goods under a lease

Three of the most common open terms for which the UCC provides provisions to fill the gaps in a contract are

open price, open payment, and open delivery

The UCC attempts to provide a consistent and integrated framework of rules to deal with all phases ___ in a commercial sales transaction from start to finish.

ordinarily arising