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Sales (see also UCC Article 9)
University of Connecticut School of Law
Weisbrod, Carol Ann

Sales

I. Is the transaction within the scope of Article 2?
A. Are goods involved?
B. Is it a sale of goods?
C. Does the K implicate both goods & services?
D. Is a merchant involved?

II. Was the contract properly formed? Was an enforceable obligation created?
A. Generally
B. Offer
C. Acceptance
D. Statute of Frauds

III. What are the terms of the contract? What are the rights and obligations created, what are the parties supposed to do?
A. Hierarchy of Terms
B. Parol Evidence Rule
C. Defense of unconscionability
D. Warranties

IV. Did the parties perform their obligations?
A. Basic Obligations
B. Acceptance
C. Rejection – Perfect Tender Rule
D. Revocation
E. Risk of Loss
F. Breach & Impairment of Expectations:

V. What are the remedies? In the absence of full performance, what are the parties’ rights and obligations?
A. Buyer’s Remedies
B. Seller’s Remedies

5 Major Differences Between the Law governing Goods and the Law Governing Services (pg.22)

Issue

Law governing sales of goods

Law governing contracts for services

Difference Offer & Acceptance

Battle of Forms (§2-207)-

Mirror-Image Rule

Irrevocable Offer

Option Contract, R2d§§45 (offer for unilateral contract), 87 (bid relied upon); firm offer (2-205)

Option Contract- R2d§§45 (Offer for Unilateral Contract), 87 (bid relied upon)

Implied Warranty of Performance Quality

Goods will be fit for their ordinary purpose and of fair average quality; pass without objection in the trade; run of even kind and quality; be adequately packaged, contained, and labeled; and conform to promises and affirmations on label or container

Services will be performed in a reasonable and wonder-like fashion

Standard for Performance

Goods may be rejected if not perfect (with some exceptions)

Performance may be rejected only if material breach

Statute of Limitations

Breach suit must be brought within 4 years of when cause of action accrues

Varies from state to state and depending on cause of action (2 to 10 years, generally)

I. Is the transaction within the scope of Article 2?
A. Are goods involved?
1. §2-102 states that Article 2 applies only to “transactions in goods”
2. Goods are defined by §2-105 & §2-107
a. §2-105(1) – Existing & identified – all things movable at the time of identification (does not include real property)
b. §2-501(1) – defines when “identification” occurs as:
a) a contract formation of goods already existing and identified
b) when the goods are shipped, marked or otherwise designated
c. §2-105(2) – Future goods
d. §2-107 – Things attached to the realty which can be severed w/o material harm are goods regardless of who is to affect the severance.
B. Is it a sale of goods?
1. Article 2 does not apply to gifts or loans
2. §2-106(1) – a sale takes place when title of goods passes from seller to buyer for consideration
C. Does the K implicate both goods and services?
Remember that the parties will argue based on their interests!
1. Divisibility/Hybrid Test:
a. The contract could be divisible (between goods and services) with each aspect governed by the relevant body of law
b. The court would apply to the appropriate portion of the UCC to the appropriate portion of the K involving goods if severable
2. Predominant Purpose Test:
a. The court will look to see if the K is primarily a sales contract with a little service incorporated or vice versa.
b. Article 2 will apply if the sale of goods is the predominant purpose of the K.
3. Gravamen T

es

2-103(1)(b)

Merchant has a higher standard for acting in good faith

Either

2-327(1)(c)

Merchant buyer has extra responsibility when returning goods

Either

2-509(3)

Merchant seller has increased responsibility for damage to goods prior to physical delivery

Either

2-603(1)

Merchant buyer has extra responsibility when returning goods

Either

2-605(1)(b)

Merchant may have to have more fully document product defects

Either

2-609(2)

Commercial standards apply to judging whether party can demand additional promise to perform

Either

II. Is the contract enforceable?
A. Statute of Frauds §2-201:
1. A contract for the sale of goods at a price of $500 or more must have:
a. Some writing – including at least the quantity
b. Be signed by the party to be charged
c. The writing can be informal in nature (scribbled note that contains the quantity amount, or a check)