UCC Provisions:

 Overview
o 2-102: Scope of the UCC
 The UCC applies to transactions in goods
o 2-103: Index of Definitions
 Buyer is someone who contracts to or buys goods.
 Good faith in the case of a merchant means honesty in fact and the
observance of reasonable commercial standards of fair dealing in the
trade.
o 2-105: Definition of a good:
 A good is a thing that is movable at the time of identification to the
contract for sale.
 Includes unborn young of animals, growing crops and other items
separably from realty.
o 2-106: Definition of a Sale

 Formation
o 2-201: Formal requirements and Statute of Frauds
o 2-202: Final written expression; parol or extrinsic evidence
o 2-204: Formation in general
 Writing or conduct by both parties which recognizes the existence of such
a contract.
 Oral. Written or otherwise
 Agreement sufficient to constitute a contract for sale may be found even
though the moment of its making is underdetermined.
 Correspondence doesn’t disclose when a deal was closed but the
actions of parties indicate that a binding obligation has been
undertaken
 Open terms: Even though one or more terms are left open a contract does
not fail for indefiniteness if the parties have intended to make a contract
and there is a reasonably certain basis for giving an appropriate remedy.
 Commercial standards of “indefiniteness” apply. The test is not
certainty as to what the parties were to do nor as to the exact
number of damages due the plaintiff.
 More open terms mean less likely they have intended to conclude a
binding a agreement but actions may be conclusive.
o 2-205: Firm Offers
 An offer by a merchant to buy or sell goods in a signed writing that give
assurance that it will be held open is not revocable, for lack of
consideration, during the time stated or if no time is stated for a reasonable
time (no longer than 3 months)
 Any such term of assurance on a form supplied by the offeree must be
separately signed by the offeror
o 2-206: Offer and Acceptance in Formation of Contract
 1a
  Accept by any manner or reasonable means, unless specified
otherwise
o Comment: construed as reasonable under the
circumstances.
 1b
 Order for goods accepted by promise to ship (return promise) or
shipment (performance)
o Most important for consumer contracts
 2
 This is about notice is accepting by performance
o 2-207: Additional Terms in Acceptance or Confirmation
 Loosens the mirror-acceptance rule
o 2-209: Modification, Rescission, Waiver
 1. No consideration needed for modification, but modifications must meet
the test of good faith.
 Test of good faith, not a mere technical consideration
 Court will focus on whether there was a reason to modify the
agreement, so it doesn’t look like a hold up.
 2. Protections against false allegations of oral modifications
 3. Statute of Frauds
 Interpretation and performance
o 2-302: Unconscionable Contract or Clause
 If the court as a matter of law finds the contract or any clause of the
contract to have been unconscionable at the time it was made the court
may refuse to enforce the contract, or it may enforce the remainder of the
contract without the unconscionable clause, or it may so limit the
application of any unconscionable clause as to avoid any unconscionable
result.
 Adverse construction of language
 Manipulation of rules of offer/acceptance
 Contrary to public policy or the dominant purpose of the contract
 Test: Whether, in the light of the general commercial background
and the commercial needs of the particular trade or case, the
clauses involved are so one-sided as to be unconscionable under
the circumstances existing at the time of making the contract.
 Parties have a reasonable opportunity to present evidence to the clause
o 2-305: Open Price Term
 The parties can conclude a contract for sale even if price is not settled.
 The price is a reasonable price at the time for delivery if
 Nothing is said as to price
 The price is left to be agreed by the parites and they to agree
 The price is fixed in terms of some agreed market or other standard
 Price to be fixed by seller or by buyer means to fix in good faith
 Fault of one party in fixing the price presents the option for the other to
cancel the contract or fix their own price
  If parties intend to not be bound unless there is a price, there is no
contract. If the party receives the good already, they must pay their
reasonable value (seller return any price paid on account)
o 2-306: Output Requirements and Exclusive Dealings
o 2-313: Express Warranties by Affirmation, Promise, Description, Sample
 1a Exp. War. Are created by any affirmation of fact or promise that that
creates an express that goods shall conform to the description
 1b any description of the goods which is made part of the basis of the
bargain creates an express warranty that the goods shall conform to the
description
 Same as above but deals with samples or models of goods.
o 2-314: Implied Warranty: Merchantability; Usage of Trade
o 2-315: Implied Warranty: Fitness for Particular Purpose
o 2-508: Cure by Seller of Improper Tender or Delivery; Replacement
 (1) Where any tender or delivery is rejected b/c non-conforming and the
time for performance has not yet expired, the seller may seasonably notify
the buyer of his intention to cure and may then within the contract time
make a conforming delivery.
 Seller can still meet the contract by delivering a conforming good
within the contract time.
 (2) Where the buyer rejects a non-conforming tender which the seller had
reasonable grounds to believe would be acceptable with or without money
allowance the seller may if he seasonably notifies the buyer have a further
reasonable time to substitute a conforming tender.
 Seeks to avoid injustice to the seller by reason of a surprise
rejection by the buyer.
 Seller is not protected unless he had a reasonable ground to believe
that the tender would be acceptable.
o Reasonable grounds are the prior course of dealing, course
of performance, usage of trade as well as specific contract
circumstances.
 Breach
o 2-601: Buyer’s rights on improper delivery
 If goods or tender of delivery fail in any respect to conform to the
contract, the buyer may
 (a) Reject the whole
 (b) accept the whole
 (c) accept any commercial units or units and reject the rest
 Wrongful rejection allows the seller to bring a cause of action under 2-701
o 2-602: Manner and Effect of Rightful Rejections
o 2-606: What constitutes Acceptance of Goods
 1. When
 (a) after a reasonable opportunity to inspect the goods signifies to
the seller that the goods are conforming or that he will take or
retain them in spite of their nonconformity; or
  (b) fails to make an effective rejection (subsection (1) of 2-602),
but such acceptance does not occur until the buyer has had a
reasonable opportunity to inspect them; or
 (c) does any act inconsistent with the seller’s ownership; but if
such act is wrongful against the seller it is an acceptance only if
ratified by him
 2. Acceptance of a part of any commercial unit is acceptance of that entire
unit.
o 2-608: Revocation of Acceptance in Whole or in Part
o 2-609: Right to Adequate Assurance of Performance
o 2-610: Anticipatory Repudiation
o 2-615: Excuse by Failure of Presupposed Conditions (Force Majeure)
 Except so fair as a seller may have assumed a greater obligation and
subject to the preceding section on substituted performance:
 Excuses a seller where his performance has become commercially
impracticable because of unforeseen circumstances not within the
contemplation of the parties at the time of contracting.
 Increased cost alone does not excuse performance unless the
unforeseen circumstance alters the essential nature of the
performance.
o War, embargo, local crop failure, unforeseen shutdown of
major sources of supply or the like
 Remedies
o Seller Remedies
 2-703: Seller’s Remedies in General
 Where the buyer wrongfully rejects or revokes acceptance of
goods or fails to make a payment due on or before delivery or
repudiates with respect to a part or the whole, then with respect to
any goods directly affected and, if the breach is of the whole
contract (Section 2-612), then also may respect to the whole
undelivered balance, the aggrieved seller may:
o (a) withhold delivery of such goods;
o (b) stop delivery by any bailee as here after provided
(section 2-705)
o (c)proceed under the next section respecting goods still
unidentified ot the contracts
o (d) resell and recover damages as hereafter provided (2-
706)
o (e) recover damages for non-acceptance (Section 2-708) or
in a proper case the price (Section 2-709)
o (f) cancel.
 Creates possible options, such as resale.
 Gateway to 709, 706, 708(1)
 2-704: Seller’s rights to Identify Goods to the Cotnract Notwithstanding
Breach or to Salvage Unfinished Goods.
 
 2-706: Seller’s Resale Including Contract for Resale
 Gateway to incidental, consequential damages
 Reselling and needs to be in a commercially reasonable manner
 Resale actually happens
 2-708: Seller’s Damages for Non-Acceptance or Repudiation
 (1) Hypothetical resale. As if the goods were resold
 Difference between contract and market price.
 2-709: Action for the Price
 Specific Performance
 Actions for Price
 Address through acceleration agreement (contract around it)
 2-710: Seller’s Incidental Damages
o Buyer’s remedies
 2-711: Buyer’s Remedies in General; Buyer’s Security Interest in
Rejected Goods
 2- 712: “Cover”; Buyer’s Procurement of Substitute Goods
 Cover Provision
 Recover damages for the difference between the cost to
cover/substitute and the contract price
 2-713: Buyer’s Damages for Non-Delivery or Repudiation
 2-714: Buyer’s Damages for Breach in Regard to Accepted Goods
 2-715 Buyer’s Incidental and Consequential Damages
 To get consequential damages, those damages must have been
foreseeable at the time of contract
 2-716: Buyer’s right to Specific Performance or Replevin
 Specific Performance
 Usually applies to non-fungible goods or property
 Goods are unique
o Common law suggests unique means no substitute market

Restatement (Second) of Contracts:

 Mutual Assent
o 19: Conduct as Manifestation of Assent
 (1) Manifestation of assent may by made wholly or partly by written or
spoken words or by other acts or by failure to act
 (2) Conduct is not effective as a manifestation of one’s assent unless he
intends to engage in the conduct and knows or has reason to know that
the other party may infer from his conduct that he assents
 Normal conduct doesn’t equal assent (Sirius XM)
  (3) Conduct may manifest assent even if he does not assent – contract
may be voidable because of fraud, duress, mistake, or other invalidating
cause.
o 20: Effect of Misunderstanding
 (1) threre is no manifestation of MA to an exchange if the parties attach
materially different meanings to their manifestation
 (2) manifestations of the parties are operative in accordance with the
meaning attached to them by one of the parties if
 (a) that pary does not know of any different meaning attached by
the other, and the other knows the meaning attached by the first
party; or
 That party has no reason to know of any different meaning
attached by the other, and the other has reason to know the
meaning attached by the first party.
o 24: Offer Defined:
 An offer is the manifestation of willingness to enter into a bargain, so
made as to justify another person in understanding that his assent to that
bargain is invited and will conclude it.
o 25: Option Contracts
 An option contract is a promise which meets the requirements for the
formation of a contract limits the promisors power to revoke an offer.
o 30: Form of acceptance Invited
 (1) An offer may invite or require acceptance to be made by an
affirmative answer in words, or by performaning or refraining from
performing a specified act, or may empower the offeree to make a
selection of terms in his acceptance.
 (2) Unless otherwise indicated by the language or the circumstance an
offer invites acceptance in any manner and by any medium reasonable in
the circumstances
o 32: Certainty

o 35: Offeree’s Power of Acceptance

o 36: Methods of Termination of the Power of Acceptance

o 38: Rejection

o 39: Counter-offers


 Consideration
o 71: Requirement of Exchange; Types of Exchange
  (1) To Constitute consideration, a performance or a return promise must
be bargained for.
 (2) A performance or return promise is bargained for if it is sought by the
promisor in exchange for his promise and is given by the promisee in
exchange for that promise.
 (3) The performance may consist of
 (a) an act or other than a promise, or
 (b) a forbearance, or
 (c) the creation, modification, or destruction of a legal relation
 (4) The performance or return promise may be given to the promisor or
to some other person. It may be given by the promisee or by some other
person.
o 73: Performance of Legal Duty
 Continued performance cannot be consideration
 Past performance cannot be consideration
 Giving up the right to breach doesn’t count as consideration
 Browning
o 74: Settlement of Claims
 Settling of a frivolous claim doesn’t count as performance
 Levine
o 76: Conditional Promise
 (1) A Conditional Promise is not consideration if the promisor knows at
the time of making the promise that the condition cannot occur
 (2) A promise conditional on a performance by the promisor is a promise
of alternative performances within Section 77 unless occurrence of the
condition is also promised.
 Hammer/Kirksey
o 77: Illusory and Alternative Promises
 A promise or apparent promise is not consideration if by its terms the
promisor or purported promisor reserves a choice of alternative
performances unless
 (a) each of the alternative performances would have been
consideration if it alone had been bargained for; or
 (b) one of the alterative performances would have been
consideration and there is or appears to the parties to be a
substantial possibility that before the promisor exercises his
choice events may eliminate the alternatives which would not
have been consideration.
o 78: Voidable and Unenforceable Promises
 The fact that rule of law renders a promise voidable or unenforceable
does not prevent it from being consideration
 Omni Group
o 79: Adequacy of Consideration; Mutuality of Obligation
  If the requirement of consideration is met, there is no additional
requirement of
 (a) a gain, advantage, or benefit to the promisor or a loss,
disadvantage, or detriment to the promisee; or
o Legal detriment is sufficient even though there is no
economic detriment or other actual loss. More realistic to
say no requirement of detriment
 (b) equivalence in the values exchanged; or
o See comment c of Restatement 71… gross inadequacy of
consideration may be relevant to issues of capacity, fraud
and the like, but the requirement o consideration is not a
safeguard against imprudent and improvident contracts
except in cases where it appears there is no bargain in
fact…
o Inadequacy “such as shocks the conscience” is often said
to be a “badge of fraud” (364 (1)(c)
o May also help justify recission or cancellation on the
ground of lack of capacity (15, 16), mistake,
misrepresentation, duress or undue influence
 (c) “mutuality of obligation”
 Apfel v. Prudential
 Omni Group
o 81: Consideration as Motive or Inducing Cause
 (1) the fact that what is bargained for does not of itself induce the making
of a promise does not prevent it from being consideration for the
promise
 (2) The fact that promise does not of itself induce a performance or
return promise does not prevent the performance or return promise
from being consideration for that promise
 Langer v. Steel Corp
 One Fine Penny
 Combination of gift and exchange counts – Thomas v. Thomas
o 84: Promise to Perform a duty in spite of non-occurrence of a condition
 Amazon contract – wavier
o 87 + 88: Option contract and Gauranty
o 89: Modification of Executory Contract
 A promise modifying a duty under a contract not fully performed on
either side is binding
 (a) if the modification is fair and equitable in view of
circumstances not anticipated by the parties when the contract
was made; or
 (b) to the extend provided by statute; or
  (c) to the extent that justice requires enforcement in view of
material change of position in reliance on the promise
 Elements:
 The contract must be executory (not fully performed on either
side)
 Fair and equitable
 Made in light of unanticipated circumstances
 Angel, Levin, Alaska, case of the entertainer, seward v. Musick, American
airlines
 Look for clues that separate coercive modifications from non-coercive
modifications
 Switching costs for the party threatened with breach
 Did costs really rise for the threatening party? Or they simply
trying to get more money?
o Angel
 What was agreed upon in terms of cost allocation?
 Disguised modifications:
o Entertainer
o E.g. rescind then resign.
 Avoid arguments of opportunity cost
o 90: Promise Reasonably Inducing an Action or Forbearance: Promissory estoppel
 (1) A promise which the promisor should reasonably expect to induce
action or forbearance on the part of the promisee or a third person and
which does include such action or forbearance is binding if injustice can
be avoided only by enforcement of the promise. The remedy granted for
breach may be limited as justice requires
 Elements
o A promise
o Promisor reasonably expects to induce action or
forbearance
o Action or forbearance materializes
o Binding if injustice can be avoided by enforcement of such
a promise
o Remedy can be limited as justice requires
 Promisor is affected only by reliance which he does or should
foresee (expectation of reliance prong)
 Enforcement must be necessary to avoid injustice: Satisfaction of
the latter requirement may depend on the reasonableness of the
promisee reliance.
 (2) a charitable subscription or a marriage settlement is bbinding under
Subsection (1) without proof that the promise induced action or
forbearance
 Allegheny College, Ricketts,
 Misrepresentation
o 159: Misrepresentation Defined
 A misrepresentation is an assertion that is not in accord with the facts
o 160: When Action is Equivalent to an Assertion (Concealment)
 Action intended or known to be likely to prevent another from learning a
fact is equivalent to an assertion that the fact does not exist.
o 161: When Non-Disclosure is Equivalent to an Assertion
o 162: When a Misrepresentation is Fraudulent or Material
o 163: When a misrepresentation prevents formation of a contract
o 164: When a misrepresentation makes a contract voidable
o 168: Reliance on Assertions of Opinion
o 169: When Reliance on an Assertion of Opinion is Not Justified
 Effect of Adoption of Writing (Scope of Contractual Obligations)
o 201: Whose meaning prevails?
 (1) Where the parties have attached the same meaning to a promise or
agreement or a term thereof, it is interpreted in accordance with that
meaning
 (2) Where the parties have attached different meanings to a promise or
agreement or a term thereof, it is interpreted in accordance with the
meaning attached by one of them if at the time the agreement was made
 (a) that party did not know of any different meaning attahed by
the other, and the other knew the meaning attached by the first
party;
 (b) that party had no reason to know of any different meaning
attached by the toehr, and the other had reason to know the
meaning attached by the first party.
 (3) Except as stated in this Section, neather paryy is bound by the
meaning attached by the other, even though the result may be a failure
of mutual assent.
o 202: Rules in aid of Interpretation
 (1) Words an other concuct ar interpreted in the light of all the
circumstances, and if the princapl purpose of the parties is ascertainable
it is given great weight.
 (2) A writing is interpreted as a whole, and all writings that are part of the
same transaction are interpreted together
 (3) Unless a different intention is manifested,
 (a) where language has a generally pervaling meaning, it is
interpreted in accordance with that meaning
 (b) technical terms and words of art are given their technical
meaning when used ina. Transaction within their technical field
 (4) Where an agreement involves repeated occasions for performance by
either party with knowledge of the nature of the performance and
opportunity for objection to it by the oteher, any course of performance
 accepted or acquiesced in without objection is given great weight in the
interpretation of the agreement.
 (5) Whereever reasonable, the amnifestations of intention of the parties
to a promise or agreement are interpreted as consistent with each other
and with any relevant course of performance, course of dealing, or usage
of trade.
o 203: Standards of preference in Interpretation
 In the interpretation of a promise or agreement or a term thereof, the
following standards of preference are generally applicable:
 (a) an interpretation which gives a reasonable, lawful, and
effective meaning to all the terms is preferred to an interpretation
which leaves a part unreasonable, unlawful or of no effect.
 (b) Express terms are given greater weight than course of
performance, course of dealing, and usage of trade. Course of
performance is given greater weight than course of dealing or
suage of trade, and course of dealing is given greater weight that
usage trade.
 (c) Specific terms and exact terms are given greater weight than
general language
 (d) separately negotiated or added terms are given greater weight
than standardized terms or other terms not separately
negotiated.
o 210: Integrated agreements
§201 Whose Meaning Prevails
(1) Where the parties have attached the same meaning to a promise or agreement or a
term thereof, it is interpreted in accordance with that meaning
(2) Where the parties have attached different meanings to a promise or agreement or a
term thereof, it is interpreted in accordance with the meaning attached by one of them
if at the time the agreement was made
a. That party had no reason to know of any different meaning attached by the
other, and the other knew the meaning attached by the first party; or
b. That party had no reason to know of any different meaning attached by the
other, and the other had reason to know the meaning attached by the first party.
(3) Except as stated in this Section, neither party is bound by the meaning attached by the
other, even though the result may be a failure of mutual assent.
§202 Rules in Aid of Interpretation
(1) Words another conduct are interpreted in the light of all the circumstances, and if the
principal purpose of the parties is ascertainable it is given great weight.
(2) A writing is interpreted as a whole, and all writings that are part of the same transaction
are interpreted together That party had no reason to know of any different meaning
attached by the other, and the other knew the meaning attached by the first party; or
(3) Unless a different intention is manifested
 a. where language has a generally prevailing meaning, it is interpreted in
accordance with that meaning
b. technical terms and words of art are given their technical meaning when used in
a transaction within their technical field
(4) Where an agreement involves repeated occasions for performance by either party with
knowledge of the nature of the performance and opportunity for objection to it by the
other, any course of performance accepted or acquiesced in without objection is given
great weight in the interpretation of the agreement.
(5) Wherever reasonable, the manifestations of intention of the parties to a promise or
agreement are interpreted as consistent with each other

§203 Standards of Preference in Interpretation

In the interpretation of a promise or agreement or a term thereof, the following standards of
preference are generally applicable:
(A) an interpretation which gives a reasonable, lawful, and effective meaning to all the
terms is preferred to an interpretation which leaves a part unreasonable, unlawful or of
no effect.
(B) Express terms are given greater weight than course of performance, course of dealing,
and usage of trade. Course of performance is given greater weight than course of
dealing or suage of trade, and course of dealing is given greater weight that usage trade.
(C) Specific terms and exact terms are given greater weight than general language
(D) separately negotiated or added terms are given greater weight than standardized terms
or other terms not separately negotiated.

§210 Rules in Aid of Interpretation

Words another conduct are interpreted in the light of all the circumstances, and if the principal
purpose of the parties
o
o 212: Interpretation of Integrated Agreement
 (1) The interpretation of an integrated agreement is directed to the
meaning of the terms of writing or writings in the light of the
circumstances, in accordance with the rules stated in this Chapter
 (2) A question of interpretation of an integrated agreement is to be
determined by the trier of fact if it depends on the credibility of extrinsic
evidence or on a choice among reasonable inferences to be drawn from
extrinsic evidence. Otherwise, a question of interpretation of an
integrated agreement is to be determined as a question of law.
o 224: Condition Defined
 A condition is an event, not certain to occur, which must occur, unless its
non-occurrence is excused, before performance under a contract
becomes due.
 Omni
 o 225: Effects of the non-Occurrence of a condition
 (1) Performance of a duty subject to a condition cannot become due
unless the condition occurs or its noon-occurrence is excused
 (2) Unless it has even excused, the non-occurrence of a condition dis-
charges the duty when the condition can no longer occur.
 (3) Non-occurrence of a condition is not a breach by a party unless he is
under a duty that the condition occur.
o 226: How an Event may be Made a Condition
 An event may be made a condition either by the agreement of the parties
or by a term supplied by the court.
o 228: Satisfaction of the Obligor as a Condition
 When it is a condition of an obligor’s duty that he be satisfied with
respect to the obligee’s performance or with respect to something else,
and it is practicable to determine whether a reasonable person in the
position of the obligor would be satisfied, an interpretation is preferred
under which the condition occurs if such a reasonable person in the
position of the obligor would be satisfied.
 Omni Group
o 229: Excuse of a condition to Avoid Forfeiture
 To the extent that the non-occurrence of a condition would cause
disproportionate forfeiture, a court may excuse the non-occurrence of
that condition unless its occurrence was a material part of the agreed
exchange.
o 230: Event that Terminates a Duty
 (1) Except as stated in Subsection (2), if under the terms of the contract
the occurrence of an event is to terminate an obligor’s duty of immediate
performance or one to pay damages for breach, that duty is discharged if
the event occurs.
 (2) The obligor’s duty is not discharged if occurrence of that event
 (a) is the result of a breach by the obligor of his duty of good faith
and fair dealing, or
 (b) could not have been prevented because of the impracticability
and continuance of the duty does not subject the obligor to a
materially increased burden.
 (3) The obligor’s duty is not discharged if, because the event occurs, the
obligor promises to perform the duty even if the event occurs and does
not revoke his promise before the oblige materially changes his position
in reliance on it.
 Performance and Non-Performance
o 231: Criterion for Determining When Performances Are to Be Exchanged Under
an Exchange of Promises
 Performances are to be exchanged under an exchange of promises if
each promise is at least part of the consideration for the other and the
 performance of each promise is to be exchanged at least in part for the
performance of the other.
o 236: Claims for Damages for Total and for Partial Breach
 (1) A claim for damages for total breach is one for damages based on all
of the injured part’s remaining rights to performance
 (2) A claim for damages for partial breach is one for damages based on
only part of the injured party’s remaining rights to performance
o 237: Effect on Other Party’s Duties of a Failure to Render Performance
 Except as stated in Section 240, it is a condition of each party’s remaining
duties to render performances to be exchanged under an exchange of
promises that there be no uncured material failure by the other party to
render any such performance due at an earlier time.
 Pier 1 – if there is no uncured material defect, buyer is entitled to
withhold payment and if no cure, terminate agreement.
 Substantial Performance (defensive remedy).