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

Contracts – Formation Outline
I. Scope of Article 2 (On Exam, assume Article 2 applies unless otherwise told)
A. Scope Generally
2-102: Scope; Certain Security and Other Transactions Excluded from this Article
Unless the context otherwise requires, this Article applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this Article impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.
B. Definitions
2-105: Definitions: “Goods”
1) “Goods” means all things (including specially manufactured goods) which are moveable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities, and things in action (claims).
“Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods severed from realty (2-107)
2-107: Goods to Be Severed from Realty: Recording
(1) A contract for the sale of minerals or the like (including oil and gas)
or a structure or its materials to be removed from realty
is a contract for the sale of goods
IF they are to severed by the seller
BUT until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sale
(Things measured in flowmeters are goods)
See also (2) about natural things attached to realty and capable of severance w/o material harm and basically how it doesn’t matter if the seller or buyer severs the stuff from the realty
C. Mixed Contracts (Those with both services and goods)
Two Tests
Predominate Purpose (Majority):
If the predominate purpose of the contract was about selling goods, Article 2 applies
If the predominate purpose of the contract was about selling services, Article 2 does not apply
Gravaman of the Action (Minority):
If the source of the complaint was about the goods, then Article 2 applies
If the source of the complaint was about the services, then Article 2 does not apply
II. Contract Formation
A. Contracts formed by writing
2-207(1): Contracts formed by writings
A definite and seasonable expression of acceptance
or a written confirmation (Official Comment 1 recognizes oral contracts as written confirmations) which is sent within a reasonable time
operates as an acceptance even t

use negating standard warranties (IWM, IWFPP) where normal practice is to include these warranties
2. Clause requiring 90-100% deliveries in case such as contract by cannery, where the usage of the trade allows for greater quantity leeways
3. Clause reserving to the seller the power to cancel upon the buyer’s failure to meet any invoice when due
4. Clause requiring that complaints be made in a time materially shorter than customary or reasonable
5. Or any other such clause by analogy
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received
2. Conflicting Terms (not additional terms, terms that directly conflict with the offer)
Two Approaches
1. Knock Out Doctrine (Majority Approach)
The knock out doctrine removes both the original term and the new term and replaces with the UCC gap filler.
2. The UCC Approach (Minority Approach)
The offer terms (1st terms) are used, because the second set of terms was merely an offer