Contracts: Application & Formation

Question 1

UCC Article 2:

Application

Answer 1

• covers sales of goods
• Predominant Purpose Test:
  
  • if service & goods, use primary purpose
• ## If realty & goods: is it a fixture?

Question 2

UCC Article 2:

Bailments

Answer 2

Transfer of personal property but not title

Question 3

UCC Article 2:

Good Faith

Answer 3

Definition: Obligation to act with forthrightness and fairness in the formation, performance, and modification of their contracts.
Goal: produce smooth transactions and minimize unnecessary expenses in forming contracts and handling failures to perform.

Question 4

UCC Article 2:

Formation

Answer 4

• certainty and definiteness of terms is less stringent under the UCC
  
  • States subject matter and and quantity of goods
• Open price term: reasonable/market price at delivery
• Open Payment term: payment due goods received
• Open Place term: sellers business or residence
• Open time: whatever’s reasonable
• Open Quantity:

Question 5

UCC Article 2: Firm Offer

Answer 5

• Made by a merchant
• Gives assurance it wont be withdrawn
• In writing
• irrevocable without consideration paid

Question 6

UCC Article 2:

Acceptance by shipment

Answer 6

• delivers conforming goods to carrier
• accept by promising to ship promptly
• if good are different, notify before shipment (to be a accommodation)
• otherwise acceptance and automatic breach

Question 7

UCC Article 2:

Additional Terms Battle of Forms

Answer 7

Common Law: Mirror image rule: no changes

UCC Article 2: depends on whether parties are merchants, terms are material, the offer is limited, the offeror objects)

Question 8

UCC Article 2:

Modification

Answer 8

• Agreement to modify terms does not require consideration.
• May have to be in writing if under statute of frauds
• must be in good faith
• if both parties agree there is a modification

Question 9

UCC Article 2:

Unconscionable contract or clause

Answer 9

• follows common law that if it hurts the conscience of society it is unenforceable

Question 10

UCC Article 2:

Statute of Frauds

Answer 10

Contracts for the sale of goods $500 or more must be in writing unless:

• Between merchants
• Special ordered contracted goods
• Admission under oath
• Buyer’s performance
• Permits piece-meal “writing”