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Contracts II
University of Kansas School of Law
Drahozal, Christopher R.

FORMATION

SCOPE.

Scope. Article II governs all “transactions in goods.” 2-102.

Transactions. Include not only sales, but also transfers such as bailments.

Goods. Article II defines “goods” as “moveable[s]” able to be identified at the time of transaction. 2-105(1). Accordingly, Article II generally does not apply to transactions involving real estate or services.

Things in action. Article II does not apply to a “thing in action” (e.g., rights and future interests). 2-105(1).

Future goods. A future good is one not both “existing and identified” at the time of agreement. Nonetheless, future goods are considered “goods” under Article II. 2-105(2).

Specially manufactured goods. Specially manufactured goods are considered “goods” under Article II. 2-105(1).

Minerals, oil, and natural gas. The sale of minerals, oil, and natural gas involves a “good” so long as the seller is to sever such from the ground. 2-107.

Mixed contracts. A mixed contract is a transaction that involves both goods and services. Courts generally use one of two tests to determine whether or not Article II applies to such transactions.

1.) Predominant purpose test. If the goods portion of the contract predominates over the service portion of the contract, Article II will govern the transaction. (fact based) MAJORITY.
2.) Gravamen of the action test. If the source of a plaintiff’s complaint arises solely from the portion of the contract involving goods, Article II will apply to the transaction. (hard to determine without investigation) MINORITY.

Relation to the common law. When Article II expressly addresses an issue, the Article II provision supersedes the common law. However,

ch allows for 1. repeated occasions for action to which the
2. other party accepts
Course of Dealing. U.C.C. 1-303(b)
-Refers to a sequence of conduct in previous transactions which establishes a common basis of understanding
Usage of Trade. U.C.C 1-303(c)
-Regular observance or custom

Effect. U.C.C. 1-303(d)
-Course of performance/dealing/usage of trade can ascertain the meaning of terms & supplement or qualify terms of the agreement

Hierarchy. U.C.C. 1-303(e)
-If terms can’t be construed consistently, UCC is superceded in descending order by—>
1. express terms in contract
2. course of performance
3. course of dealing
usage of trade