BLAW CH12 UCC & CISG

Perfect Tender Rule (EXCEPTIONS)

1) Agreement of the Parties 2) Cure: seller has right to repair/replace 3) Substitution of Carriers: carrier unavailable at no fault to either parties, substitute is available. 4) Commercial Impracticability: if unforeseeable event occurs, perfect tender rule no longer applies 5) Destruction of Identified Goods 6) Assurance and Cooperation: reasonable grounds for non performance, party can ask for written assurance or 'suspend' performance/delivery

If goods are in seller's possession (remedies of seller)

1) The Right to Cancel (Rescind) the Contract. Seller must notify buyer; Buyer is not discharged from remaining obligations 2) The Right to Withhold Delivery. If material breach by buyer, seller can withhold delivery of all goods; If non-material breach, seller can withhold delivery of this installment: 3) The Right to Resell or Dispose of Goods. Seller can resell and keep profits from sale and hold buyer liable for difference; Seller must give buyer notice of sale, unless goods are perishable. 4) The Right to Recover Purchase Price Due. Seller can bring action to recover purchase price ; If seller must sue, he must hold goods for buyer, and sell any time before collecting the judgment. 5) The Right to Recover Damages for buyer's wrongful nonacceptance. If buyer repudiates or wrongfully chooses to accept goods, seller can bring action to recover damages. Damages: market price at the time & place of tender + incidentals.

Merchant of Goods (3) Exceptions

1)material (risk of loss or surprise; or 2) offer could not be changed; or 3) objected to terms or objected within a reasonable time

Knock Out Rule

If acceptance has a term that is different (not new) from the offer, eliminate both terms and court can fill the gap. -a contract is still formed but the rule operates to reject both parties' terms if there is a disagreement between the forms exchanged. On the inconsistent item, the parties' form terms are knocked out of the contract and replaced by the gap-filler provisions of Article 2 of the UCC.

US Common Law

applies to all contracts except if UCC or CISG applies

US version of CISG

applies to sales of goods where each party is in a different nation that has adopted the CISG unless excluded

What law governs Mixed Contracts?

Goods and Services combined are mixed contracts; "Predominant Factor" Test- if goods, then UCC governs, if services then common law governs ENTIRE contract

NO MIRROR IMAGE

When both parties are Merchants, the contract incorporates new terms unless: (1) original offer expressly limits terms, or (2) material change, or (3) offeror objects within reasonable time

Parties May Opt Out of CISG in Whole or In Part

a choice-of-law clause selecting the law of a CISG contracting state is not sufficient to exclude the CISG In the absence of clear language indicating that both contracting parties intended to opt out of the CISG . . . the Court rejects Plaintiff's contention that the choice of law provisions preclude the applicability of the CISG in other words: Once the parties recognize that CISG applies to their transaction, they must decide in the drafting phase if they want the contract to be governed by CISG. In deciding whether to opt out, the prudent drafter will understand that although there are similarities between the law governing the sale of goods between U.S. buyers and sellers, the Uniform Commercial Code (UCC), and CISG, there are also many important differences.

Anticipatory Repudiation

a party communicates intention to not perform (constitutes breach of contract); Non breaching party may suspend performance and treat the Anticipatory Repudiation as material breach and pursue a remedy

Uniform Commercial Code (UCC)

applies for transactions between merchants and goods

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

applies in transactions between merchants in countries who signed the treaty and goods

merchant

deals in goods of the kind in the sale; holds herself out as having special expertise, knowledge, or skill; person who employs a merchant.

Perfect Tender Rule

if goods, or tender of delivery, fail in any respect to conform to the contract, the Buyer has the right to: -Accept the goods; -Reject the entire shipment; or -Accept part and reject part

UCC's Battle of the Forms

mirror image DOES NOT APPLY; Merchant & Non Merchant: Offer + Acceptance = Contract but different terms are non-binding; Merchant of Goods: Offer + Acceptance = Contract, even if different forms or terms with (3) exceptions.