Sales Outline

 
Sales Law
Professor Grace Lee
Fall 2017
Checklist
 
Remember:
3 hours, 10 multiple choice questions, 2 issue spotting questions
CITE hypotheticals and cases to compare and distinguish
Explore hypothetical situations that could apply (even if they don’t), and what outcomes would have been
 
Is the sale governed by Article 2?
 
Does it involve primarily goods or services? Art. 2 only covers goods.
Two ways to distinguish between goods and services
Predominant purpose – looking at the transaction as a whole
Gravaman of the action – looking at the basis of the complaint: whether the problem is with the good or with the service
Is it a true sale or a lease? Art. 2 covers only sales.
Overarching question: if either is true then it is a sale
Will there be any residual value left at the end of the lease?
If there is, is it a foregone conclusion that the lessee will get this value?
Relevant factors
Can lessee terminate
Is the lease term for longer than the economic life of the goods?
Is the lessee bound to renew the lease for the remaining economic life of the goods or to become the new owner?
Does the lessee have an option to renew the lease for the remaining economic life for little or no consideration
Does the lessee have an option to become the owner of the goods or little or no consideration?
 
What are the terms of the sale?
 
Battle of the forms – § 2-207
Figure out which subsection you are dealing with
2-207(1) – when at least one party accepts the other’s offer through some form of acknowledgment
Result: the form that was acceptable controls
Terms from the other form can be brought in with limitations
Terms from the acceptance become part of the contract unless limitations apply
2-207(3) – when one of the forms require explicit acceptance and the other side has not provided an acknowledgment of the terms but the parties nonetheless act as if a contract is in place (ie. start swapping money and goods)
Result: contract consists only of those terms that are identical on both forms; everything else is gap filler (knocked out)
Statute of Frauds
If the sale is more than $500 worth of goods, there must be a writing signed by the party arguing there is no contract – § 2-201(1)
Exceptions (explain reasons for exception)
Both parties are merchants, the party arguing there is no contract received a written confirmation and did not object within 10 days – § 2-201(2)
Specially manufactured foods for the buyer, the seller has started making them already, and the seller cannot sell them to someone else – § 2-201(3)
The party arguing there is no contract has admitted in a court pleading or testimony that a contract exists – § 2-201(3)
The party arguing there is no contract accepted either payment (if a seller) or the goods (if a buyer); this only applies to the amount accepted – § 2-201(3)
Parol Evidence (for things outside the contract)
If the writing is final (but not complete), nothing can contradict, but it can be supplemented by the following:
Course of performance, course of dealing, usage of trade on issues that the writing does not address
Same thing for specific prior or contemporaneous agreement
If the writing is not only final, but also complete:
Course of performance, course of dealing, and usage of trade can still be used
However, specific prior or contemporaneous agreements can no longer be used
Clearest language for when a contract is complete is language in the contract
 
Did something go wrong with the sale?
 
Was a warranty breached?
Express warranties
Must be made explicitly by the seller
Must be part of the reason why the buyer bought the product; goes to the “basis of the bargain”
Implied warranties
Merchantability
Fitness for a specific purpose
Can a suit be brought?
Vertical privity – How far