Sales

J.J.R.

1. Definition a. Sale = exchange of goods for consideration b. Goods = movable property c. Mixed Contract = dominant factor test d. Goods Attached to Real Property = can be good if removed, minerals and crops are goods when removed e. Merchant = deals or goods / special knowledge 2. Firm Offer a. Common Law required consideration / UCC no consideration, good for up to 90 days 3. Omitted Terms court apply gap fillers, Quantity can t be gap filled a. Omitted Price reasonable, if K doesn t set price other one party may set or avoid K 4. Acceptance = Any reasonable manner a. Offering Party can specify manner or means is unambiguously + reasonable to circumstance b. Acceptance by Promise to ship / or actually ship c. Non-Conforming goods sent as conforming goods = acceptance & breach i. Accommodation buyer can 1. Accept or 2. Reject (no K formed) d. Acceptance by Performance begin + notice to buyer 5. Counteroffer no mirror image rule under UCC a. Non-Merchants = additional terms NOT included (unless acceptance is conditioned = then considered counteroffer) b. Merchant = additional terms INCLUDED unless (1) materially change k, (2) offer limits, (3) buyer rejects c. Merchants = conflicting terms knocked-out rule / (minority) last-shot rule d. Performance w/ additional terms construed as acceptance, even if would not be under K 6. Auctions - each bid is separate offer / Reserve seller can withdraw before hammer falls / No- Reserve seller can t withdraw a. Seller can t bid on own item unless forced sale 7. Defenses to Formation a. Statute of Frauds = K worth >$500 must be signed, has to include quantity i. Writing can include almost anything, memo confirming terms accepted if not objected w/i 10 days ii. No Writing if: (1) special mfg goods, (2) admit K formed, (3) performance accepted b. Unconscionability: Substantive Uncon = conditions unfair no reasonable person would agree / Procedural Uncon = unfairly surprised by K provision (micro print) 8. K Modification a. By Agreement: no consideration, in good-faith, may be not oral-modification clause b. By Law: (1) subject destroyed + (2) risk of loss didn t pass to buyer c. Avoidance by Impracticability: Prohibitively expensive + unforeseen d. Partial Impracticability: Supplier must prorate if can t fulfill + reasonable notice, buyer can cancel K 9. Insecurity: a. (1) reasonable ground for insecurity + (2) demand assurance in writing + (3) may suspend performance until assured b. Must provide adequate assurance w/i 30 days then party can repudiate (not automatic) 10. Anticipatory Repudiation: unequivocally states not intend to perform a. Breached party can wait for performance / or consider breach and seek remedies b. Breaching party can rescind repudiation and resume until considered in breach 11. Parol Evidence Rule: no contradiction by prior agreement a. Can show subsequent modification 12. Performance: Default seller place of business/ reasonable notice of delivery / seller responsible to get good to carrier or deliver a. Shipment Contract: Seller agrees to Ship goods, if breach + material loss = Buyer voidable b. Destination Contract: Seller must deliver good (F.O.B = Shipment K / C.O.D. = Destination K)

13. Buyers Payment: tender payment in any acceptable means, K can specify, check conditional until cleared, installment payment for each installment proportionally 14. Inspection: Buyer can inspect at reasonable time and place, buyer pays for inspection 15. Risk of Loss: ask who held title to goods / who is carrying insurance a. Seller insurable when as long as has claim to goods b. Buyer insurable when good identified in K c. Risk w/ buyer after acceptance of K d. Risk change when responsibly changes (non-conforming goods risk on seller) 16. Buyers Remedies a. Rejection: perfect tender voidable / Installment = can t reject unless substantially impairs, must accept reasonable alternative i. Buyer notify Seller of defects, fail to do so then can t rely on those defects ii. Buyer must hold goods for seller to take back, can recover incidental expense iii. Buyer must allow Seller to cure before performance due b. Revocation: post-acceptance must prove breach that sub impairs value i. (1) buyer accepted good expecting cure, (2) defects undiscoverable w/ inspection, (3) seller assured buyer c. Damages: FMV as should have been delivered K price i. Cover Damages = K price replacement cost ii. Incidental Damages = costs like storage of non-conforming iii. Consequential Damages = costs unavoidable through cover + seller knew of particular damages iv. Revlevin = buyer tries and can t cover can seek order to perform on K / when partial payment and seller insolvent w/i 10 days, or household goods v. Specific Performance = when good are unique d. Buyers Remedies Accepting Non-Conforming Goods: K price Value at acceptance i. Vouching = buyer sells non-conform goods to 3rd party, 3rd party objects buyer vouches in seller to defend. Seller bound by judgment if doesn t defend. 17. Sellers Remedies a. Seller must mitigate b. Right to Recapture: if buyer insolvent can recapture w/i 10 days // if buyer misrepresent solvent w/i 90 days of deliver seller can recapture outside 10 days // seller can stop shipment or notify bailee c. Seller Damages: expectancy (must mitigate and try to resell) i. Market Price K price / or Sale Price K Price (Seller can elect to max $$) ii. Lost Volume Seller lost profit iii. Sellers can t claim consequential damages 18. Warranties a. Warranty of Title: seller owns what they are selling b. Warranty Against Infringement: no intellectual property infring c. Express Warranties: through writing, samples, something factual, bragging doesn t count d. Implied Warranty of Merchantability: merchants only / applies unless expressly disclaimed, must use word merchantability e. Implied Warranty of a Particular Purpose: all sellers / if know of particular purpose / general language wavier ok f. Warranty Damage Limitations: can t limit personal injury, liquidated damages can t be punitive 19. 3rd Party Rights a. Some allow only family, some any injured party 20. Against 3rd Parties b. Buyer or seller can sue 3rd party for damage to goods 21. 4 Year Statute of Limitations: from date of breach /// parties may reduce to 1yr but no past 4yr 22. Can t give more title then you have a. Exceptions for good faith purchasers i. Money or negotiable instruments ii. Buyer makes improvements

iii. iv. v.

True owner indicated thief has title Theft by fraud, buyer has good title against owner Buy from merchant