chapter 14

conforming goods

Goods that conform to the contract description in every way

Article 2A

Leases of personal property (goods such as automobiles and industrial equipment) a lease is a transfer of the right to possess and use goods for a period of time in exchange for payment. article 2a defines lease agreement as: In regard to the lease of goods, an agreement in which one person (the lessor) agrees to transfer the right to the possession and use of property to another person (the lessee) in exchange for rental payments. *does not cover real property like land or buildings

product liability

- (negligence): "due care": put warning labels. - (fraudulent misrepresentation). When a user is injured as a result of a manufacturer's or seller's fraudulent misrepresentation, the basis of liability may be the tort of fraud. Medicine Will cause you to lose 50 pounds. And you buy it. Misrepresentation on a label or ad is enough to show intent. Buyer must have relied on the misrepresentation. Deceptive ad VIOXX -(strict liability): people may be liable for the results of their acts regardless of their intentions or their exercise of reasonable care. tiger being loose. and making sure your spinach is safe for people to eat. requirements for strict liability: Proving a defective condition Unreasonably dangerous products ex: A forklift that Trent is operating will not go into reverse, and as a result, it runs into a bystander. In this situation, the bystander can sue the manufacturer of the defective forklift under strict liability (and possibly bring a negligence action against the forklift operator as well).

remedy for the buyer or lessee

-The right to cancel the contract -The right to obtain the goods on insolvency -The right to obtain specific performance: the dog and the divorce -The right of cover: have substitutes and difference in price and if it causes more damages, you have to pay for those -The right to replevy goods: action to recover identified goods in the hands of a party who is unlawfully withholding them. -The right to recover damages: -The right to reject the goods -Revocation of acceptance -The right to recover damages for accepted goods

exceptions to the writing requirements of the Statute of Frauds.

1. Specially manufactured goods. An oral contract will still be enforceable if it is for goods that are specially manufactured for a particular buyer and the seller has substantially started manufacturing the goods. 2. Admissions. When the party against whom enforcement is sought admits to making an oral contract, the contract is enforceable, but only as to the quantity of goods that the party admitted. cince tshirts sale arent are in writing you cant prove and dont have to pay 3. Partial performance. An oral contract that has been partially performed (such as when some of the contracted goods have been paid for and accepted) will be enforceable to the extent that it has been performed.

merchant's firm offer

A firm offer arises when a merchant-offeror gives assurances in a signed writing that the offer will remain open. The merchant's firm offer is irrevocable without the necessity of consideration for the stated period or, if no definite period is stated, a reasonable period (neither to exceed three months). Osaka, a used-car dealer, e-mails a letter to Gomez on January 1, stating, "I have a used 2014 Toyota RAV4 on the lot that I'll sell you for $22,000 any time between now and January 31." This e-mail creates a firm offer, and Osaka will be liable for breach of contract if he sells the RAV4 to another person before January 31.

who is a merchant

A person who deals in good of the kind involved in the sales contract A person who, by occupation, holds himself or herself out as having knowledge and skill unique to the practices or goods involved in the transaction A person who employs a merchant as a broker, agent, or other intermediary

Defenses to Product Liability for seller

Assumption of risk: the defendant must show that the plaintiff knew and appreciated the risk created by the product defect and the plaintiff voluntarily assumed the risk, even though it was unreasonable to do so. Product misuse: if customer was using product the wrong way and gets hurt that's their fault Comparative negligence: compare the person negligence of person who sold it and person who bought the stuff. Commonly known dangers: you should know that knives and guns are dangerous.

Rules When One Party or Both Parties Are Nonmerchants

If one (or both) of the parties is a nonmerchant, the contract is formed according to the terms of the original offer and does not include any of the additional terms in the acceptance. OfficeSupplyStore.com sells office supplies on the Web. Employees of the Kansas City School District in Missouri ordered $17,642.54 worth of office supplies—without the authority or approval of their employer—from the Web site. The invoices accompanying the goods contained a forum-selection clause (see Chapter 12) that required all disputes to be resolved in California. When the goods were not paid for, Office Supply filed suit in California. The Kansas City School District objected, arguing that the forum-selection clause was not binding. The court held that the forum-selection clause was not part of the parties' contract. The clause was an additional term included in the invoices delivered to a nonmerchant buyer (the school district) with the purchased goods. Therefore, the clause did not become part of the contract unless the buyer expressly agreed, which did not happen in this case. since they are not in cali, kansas school are saying they shouldn't have to go to cali since they are not merchants and that is an additional things. Non merchants do not have to follow the additional stuff

implied warranty

Implied warranty of fitness for a particular purpose. Implied warranty of merchantability: theres an implied warranty that the product can be sold and is functioning. What you bought it for it does that same function. Implied warranty of fitness for a particular purpose You go to lowes and you wanna be concrete salt and you go home and its not he right salt and it breaks and you can sue them bc you bought it for a particular purpose.

Rules When Both Parties Are Merchants

In contracts between merchants, the additional terms automatically become part of the contract unless one of the following conditions arises: The original offer expressly limited acceptance to its terms. The new or changed terms materially alter the contract. The offeror objects to the new or changed terms within a reasonable period of time. have to follow additional rules WPS, Inc., submitted a proposal to manufacture equipment for Expro Americas, LLC, and Surface Production Systems, Inc. (SPS). Expro and SPS then submitted two purchase orders. WPS accepted the first purchase order in part, and the second order conditionally. Among other things, WPS's acceptance required that Expro and SPS give their "full release to proceed" and agree to "pay all valid costs associated with any order cancellation." The parties' negotiations continued, and Expro and SPS eventually submitted a third purchase order. Although the third purchase order did not comply with all of WPS's requirements, it did give WPS full permission to proceed and agreed that Expro and SPS would pay all cancellation costs. With Expro's and SPS's knowledge, WPS then began working on that order. Expro and SPS later canceled the order and refused to pay the cancellation costs. When the dispute ended up in court, Expro and SPS claimed that the parties' contract was not enforceable because the additional terms in WPS's acceptance had materially altered the contract. The court found in favor of WPS. Expro and SPS had given a release to proceed that basically authorized WPS to go forward with manufacturing the equipment. Because "the parties operated as if they had additional time to resolve the outstanding differences," the court reasoned that Expro and SPS were contractually obligated to pay the cancellation costs.

offer

In general contract law, the moment a definite offer is met by an unqualified acceptance, a binding contract is formed. In commercial sales transactions, the verbal exchanges, correspondence, and actions of the parties may not reveal exactly when a binding contractual obligation arises. offer can be revoked at any time before acceptance consists of open terms and merchant's firm offer

acceptance

McFarren Pharmacy orders five cases of Johnson & Johnson 3-by-5-inch gauze pads from H.T. Medical Supply, Inc. If H.T. ships five cases of Xeroform 3-by-5-inch gauze pads instead, the shipment acts as both an acceptance of McFarren's offer and a breach of the resulting contract. McFarren may sue H.T. for any appropriate damages. If, however, H.T. notifies McFarren that the Xeroform gauze pads are being shipped as an accommodation—because H.T. has only Xeroform pads in stock—the shipment will constitute a counteroffer, not an acceptance. A contract will be formed only if McFarren accepts the Xeroform gauze pads communication of acceptance: a unilateral offer can be accepted by beginning performance. additional terms: the UCC dispenses with the mirror image rule (requires that the terms of the acceptance exactly match those of the offer.) Under the UCC, a contract is formed if the offeree's response indicates a definite acceptance of the offer, even if the acceptance includes terms additional to or different from those contained in the offer ex: Aldrich e-mails an offer to sell twenty Samsung Galaxy model 7.0 tablets to Beale. If Beale accepts the offer but changes it to require model 8.9 tablets, then there is no contract.

formation of Sales and Lease Contracts

The UCC comes into play when the parties either fail to provide certain terms in their contract or wish to change the effect of the UCC's terms in the contract's application. made up of offer and acceptance and consideration and statute of frauds and obligations of the seller or lesser

remedies for seller or lessor

The right to cancel the contract The right to withhold delivery The right to resell or dispose of the goods The right to recover the purchase price or lease payments due The right to recover damages

tender of delivery

Under the Uniform Commercial Code, a seller's or lessor's act of placing conforming goods at the disposal of the buyer or lessee and giving the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery. where seller has to deliver the things in the contract and telling the buyer about method of delivery

express warranties

its given. im expressly saying this car runs, it works. Can be rigged. basis of bargain: expresslly telling you that a bag of feed contains 20% protein. that is express only facts

obligations of the buyer or lessee

payment: pay when specified or pay before a certain time or pay at the time of delivery. and pay how the agreement told you too-- cash, check, etc Right of Inspection: the buyer or lessee has an absolute right to inspect the goods before making payment. If the goods are not as ordered, the buyer or lessee has no duty to pay. acceptance: if you don't reject within a time period then you have accepted.

article 2 of the UCC

sale of goods- UCC governs sales contracts (contracts for the sale of goods). *does not deal with real estate, services, or intangibles like stocks and bonds Whenever a conflict arises between a common law contract rule and the state statutory law based on the UCC, the UCC controls. sale: The passing of title to property from the seller to the buyer for a price. good: tangible and movable Tangible property: Property that has physical existence and can be distinguished by the senses of touch and sight. Intangible property: Property that cannot be seen or touched but exists only conceptually, such as corporate stocks and bonds. Article 2 of the UCC does not govern intangible property.

statute of frauds

sales contracts for goods priced at $500 or more and lease contracts requiring total payments of $1,000 or more must be in a writing or record to be enforceable. Special Rules for Contracts between Merchants - parties have agreed orally - one of the merchants sends a resigned written or electronic confirmation to the other merchant within a reasonable time. - Unless the merchant who receives the confirmation gives written notice of objection to its contents within ten days after receipt, the writing is sufficient against the receiving merchant, even though she or he has not signed it. ex: Alfonso is a merchant-buyer in Cleveland. He contracts over the telephone to purchase $6,000 worth of spare aircraft parts from Goldstein, a merchant-seller in New York City. Two days later, Goldstein e-mails a signed confirmation detailing the terms of the oral contract, and Alfonso subsequently receives it. Alfonso does not notify Goldstein in writing (or e-mail) that he objects to the contents of the confirmation within ten days of receipt. Therefore, Alfonso cannot raise the Statute of Frauds as a defense against the enforcement of the oral contract.

open terms

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 both of the following are true: The parties intended to make a contract. There is a reasonably certain basis for the court to grant an appropriate remedy. if too many terms are left open, a court may find that the parties did not intend to form a contract. Also, the quantity of goods involved usually must be expressly stated in the contract. If the quantity term is left open, the courts will have no basis for determining a remedy. say you leave price out of the contract, UCC can determine a price, but if you leave out a lot of things, not good bc it doesn't look like yo intended to make a contract

title warranties

when i told you this car, i gave you the title

the perfect tender rule

you have to deliver everything said in the contract 4 obligations of the seller cure: right of the seller to to repair, adjust, or replace defective or nonconforming goods. The seller or lessor has a right to attempt to "cure" a defect when the following are true: 1. A delivery is rejected because the goods were nonconforming. 2. The time for performance has not yet expired. 3. The seller or lessor provides timely notice to the buyer or lessee of the intention to cure. 4. The cure can be made within the contract time for performance. Substitution of Carriers: if the carrier to deliver the goods is no longer available and its neither of the party's faults, and if there's an available substitute, then it is allowed to use that substitute. Commercial Impracticability: occurrences unforeseen by either party when a contract was made may make performance commercially impracticable. ex: Houston Oil Company, which receives its oil from the Middle East, has a contract to supply Northwest Fuels with one hundred thousand barrels of oil. Because of an oil embargo by the Organization of Petroleum Exporting Countries, Houston is unable to secure oil from the Middle East or any other source to meet the terms of the contract. This situation comes fully under the commercial impracticability exception to the perfect tender doctrine. Destruction of Identified Goods: Sometimes, an unexpected event, such as a fire, totally destroys goods through no fault of either party before risk passes to the buyer or lessee. In such a situation, if the goods were identified at the time the contract was formed, the parties are excused from performance. If the goods are only partially destroyed, however, the buyer or lessee can inspect them and either treat the contract as void or accept the damaged goods with a reduction in the contract price.