Article 2
Scope: “Transactions in goods,” not just sales.
Goods = All things movable at time of identification in the K, but also includes unborn animals, growing crops, specially manufactured goods. (2-105). Would not include IP, but Neustadter thinks it would include retail sale (licensing) of software.
Services are excluded.
If both goods and services, the “predominant purpose of the transaction” controls. Some jurisdictions ask what the “gravamen of the complaint” is.
The manufacturer of all goods contains some service, but that doesn’t exclude the goods from the scope of A2. Services which are normally part of the goods are not included in this consideration. Only services which are in addition to the normal for the goods are included.
A2 can be applied to non-good situations – there is no prohibition against that.
Formation
“Firm offers” are usually not binding without consideration, but if made by merchant and in writing, then it must remain open for reasonable time, but never longer than 3 months (2-205).
Contract can be made in any manner sufficient to show agreement, including conduct recognizing the existence of the K. Missing terms are ok, so long as parties intended to make K and reasonable basis for giving appropriate remedy. (2-204).
Statute of frauds (2-201) requires that contracts for sale of goods over $500 and for real estate be memorialized with quantity term, and signed by party against whom enforcement is sought. Erroneous terms doesn’t void writing. Writing need not be delivered – merely evidentiary of K (and the entire K need not be in writing).
Exceptions
Oral K between merchants and followed by confirmation received containing quantity term without objection to contents of confirmation in 10 days. Merchant: Person who deals in goods of that kind or holds themselves out as having knowledge or skill peculiar to the (business) practices or goods involved in the transaction (2-104).
If goods are specially manufactured and can’t be resold before repudiation and when substantial beginning of manufacture has begun. Argue that if the party begins manufacturer of part of the goods, this clause protects the entire K, even those goods not yet made (argument can be made both ways).
To the extent D admits in pleadings or court that K was made.
To the extent goods have been received and accepted or payment made and accepted.
Some jurisdictions allow estoppell as an argument.
SOF can be waived. Merchants often use a master agreement which waives SOF and sets out all terms and conditions of future oral/electronic sales.
p allowed to go to some amount of discovery to determine if D has writing that satisfies SOF.
K was still formed, even if SOF not complied with, K just can’t be enforced.
Signature: “Any symbol executed or adopted with present intent to authenticate a writing.” Cal. Civ Code §1633 Uniform Electronic Transactions Act says e-mail is a signed writing.
K cannot be enforced beyond the quantity in the writing.
Unless K unambiguously indicates otherwise, offer can be accepted in any medium reasonable in the circumstances, including by ship
oral agreements and contemporaneous oral agreements) are admissible for all purposes.
K written and partially integrated (i.e. final with regard to the contained terms)
Parol evidence not admissible to contradict writing, but consistent additional terms are allowed.
Prior course of dealing, usage of trade, or course of performance admissible to explain or supplement (but not contradict) writing, unless clearly negated.
K written and completely integrated (complete and exclusive with regard to all terms, those existing in the K and any that don’t exist in the K)
Prior course of dealing, usage of trade, or course of performance admissible to explain or supplement (but not contradict) writing, unless clearly negated.
Express parol evidence inadmissible to add any new terms.
Complete and exclusive: Intent of parties
Existence of merger or integration clauses (not conclusive factor)
Whether extrinsic term is one which parties would certainly have included in the document had it been part of their agreement
Sophistication of the parties
Nature and scope of both prior negotiations between parties and any purported extrinsic terms.
Evidence of collateral agreements that occurred after the writing can always be introduced.
