162 MODULE 24 SALES

(3) Written form may be supplied by either party as long as it is signed by merchant-offeror
EXAMPLE: M, a merchant, agrees in a letter signed by M to sell B 1,000 widgets, with the offer
to remain
open for five weeks. Even if M tries to revoke this offer before the five-week period, B may still
accept.
EXAMPLE: M, a merchant, agrees in signed writing to sell B 1,000 widgets, stating that the offer will remain
open for 120 days. B acceptsthe offer on the 95th day. lfnothing has occurred to terminate offer prior to
acceptance, offer and acceptance are present. The irrevocable nature of this offer would end after ninety
days, but the offer would not automatically terminate. The offer would remain in existence for the stated
period (120 days) unless terminated by other means.
EXAMPLE: Same facts as above except that B gives M $100 to keep the offer open for six months. This is an
option supported by consideration, so the firm offer restrictions do not apply. That is, the offer remains open
for the full six months. (This would be true even if M is not a merchant.)
3. Battle of forms=-between merchants, additional terms included in the acceptance become part of
the contract unless
(1) Original offer precludes such, or
(2) New terms materially alter the original offer, or
(3) The original offeror gives notice of his/her objection within a reasonable time
EXAMPLE: P offers in writing to sell to Q 1,000 type xxx widgets for $10,000. Q replies, "1 accept, but 1 will
personally pick these up with my truck." Both P and Q are merchants. They have a contract with the stated
delivery terms.
d. Under the UCC, a contract may be modified without new consideration if done in good faith
EXAMPLE: B agrees in a contract to buy 300 electrical partsfor $1.00 each from S. B later points out to S
that
he can get the same parts from D for $.90 each and asks for a price reduction. S reduces the price to $.90
each.
This new contract is enforceable even though B gave no new consideration. Note that ifS had required B to
pay
the $1.00 as originally agreed, B would be in breach of contract if he failed to go through with the original
con-
tract.
(1) Common law requires new consideration on both sides for any modification
EXAMPLE: B agreed, in a written contract, to pay $10,000 to S for certain real estate. Later, B said he was
having difficulty getting the $10,000 so S agreed to reduce the price to $9,000. S can still enforce thefull
$10,000 because B gave no new considerationfor the modification.
4. Recall that under UCC version of Statute of Frauds, contracts for sale of goods for $500 or more
must be in writing with some exceptions, most notably, specially manufactured goods.
(1) Writing must contain quantity and signature of party to be charged
(a) Need not contain all details required under common law version
(2) If contract is modified, must be in writing if after modification it is for $500 or more
EXAMPLE: B agrees in a contract to buy widgets from S for $500. Later, S agrees to a reduction in
price to
$490. The first contract must be in writing (absent any exceptions), but the modified contract may
be oral.
5. Consignment-arrangement in which agent (consignee) is appointed by consignor to sell goods if
all the following conditions are met
(1) Consignor keeps title to goods,
(2) Consignee is not obligated to buy or pay for goods,
(3) Consignee receives a commission upon sale, and
(4) Consignor receives proceeds of sale
6. Document of title-any document that in the regular course of business is accepted as adequate
evidence that the person in possession of the document is entitled to receive, hold, and dispose of
the document and the goods it covers
7. Bill of lading-a document of title that is issued by a private or common carrier in exchange for
goods delivered to it for shipment. It may be negotiable or nonnegotiable.
8. Warehouse receipt-a document of title issued by a person engaged in the business of storing
goods (i.e., a warehouseman). It acknowledges receipt of the goods, describes the goods stored,
and contains the terms of the storage contract. It may be negotiable or nonnegotiable.
9. Product Liability-a manufacturer or seller may be responsible when a product is defective and causes
injury or damage to a person or property. There are three theories under which manufacturers and sellers
may be held liable .. (In each. fact pattern, consider all three, although proof of anyone creates liability.)