Business Law 1 // Ch. 20 The Formation of Sales and Lease Contracts

A CONSUMER LEASE involves three elements, what are they?

1) A lessor who regularly engages in the business of leasing or selling 2) A lessee (except an organization) who leases the goods "primarily for a personal, family, or household purpose." 3) Total lease payments that are less than $25,000

What is the comprehensive coverage of the UCC?

The UCC is the single most comprehensive codification of the broad spectrum of laws involved in a total commercial transaction. The UCC views the entire "commercial transaction for the sale of and payment of goods" as a single legal occurrence having numerous facets.

A _____________________ is a transfer of the right to possess and use goods for a period of time in exchange for payment.

Lease

Who is a merchant according to Article 2 of the UCC?

A Merchant -deals in goods of the kind in the sale -holds herself out as having special expertise, knowledge, or skill -a person who employs a merchant as a broker, agent, or other intermediary

What is Article 1 of the UCC?

Article 1 sets forth an obligation to perform in "good faith" all contracts falling under the UCC. Many contracts do not call under the UCC and this is because they do not involve commercial transactions.

What is Article 2 of the UCC?

Article 2 of the UCC sets forth the requirements for sales contracts, as well as the duties and obligations. of the parties involved in the sales contract.

Which article of the UCC deals with Leases?

Article 2A

What are the goods associated with Real Estate that do fall under Goods?

Goods associated with real estate often do fall within the scope of Article 2. Such as minerals, gas, or oil often do fall within the scope of Article 2 if severance is made by the seller.

Article 2 of the UCC governs ________________________.

Governs Sales Contracts, or contracts for the sale of goods.

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

Lessee

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

Lessor

Does Article 2 deal with the sale of anything else besides goods?

No. Article 2 deals with the sale of goods but NOT REAL PROPERTY (real estate), services, or intangible property. These are covered by COMMON LAW

The UCC defines a _____________________ as the "passing of title [evidence of ownership rights] from the seller to the buyer for a price."

SALE

T/F UCC Article 2 imposes special standards upon a "Merchant" who has special business expertise and is not a causal buyer/selelr

TRUE

What is the goal of the Uniform Commercial Code (UCC)?

The goal of the UCC is to simplify and to streamline commercial transactions. The UCC allows parties to form sales and lease contracts, including those online.

when we turn to contracts for the sale and lease of goods, we move away from common law principles and into the area of statutory laws. State statutory law governing. sales and lease transactions is based on _____________________, which has been adopted by all of the states.

Uniform Commercial Code (UCC)

Are parties free to agree to terms different from those stated in the UCC?

YES. They are. A general rule is that whenever there is a conflict between a common law contract rule and the state statutory law based on the UCC, the UCC controls

What are Goods?

to be characterized as a good, an item of property must be tangible, and it must be movable. Intangible property such as stocks and bonds does not count as a good