UCC 2-105

Good

UCC 2-209

Modification, Recision, and Waiver

Unless specified, modifications are allowed without additional consideration.

- Must meet SoF req'ments

- When Modification or recision are not met, change can still operate as a waiver.

- Waiver creates a new deadline, a "reasonable amount of time"

Facts: Barth hired to automate lens manufacturing program; deadline set twice and amended. Barth attempts late delivery, but BMC Sues for breach. Barth countersues because of refusal to accpet goods.

Does UCC Apply? Yes.

UCC 2-204

Formation

Does not require formal offer, acceptance, consideration

-K may be made in any manner sufficient to show agreement, incl. conduct by both parties which recognizes existence of such a K

- moment of formation does not need to be determined

- Ks do not fail for indefiniteness as long as there is a reasonable basis for giving an appropriate remedy

UCC 2-201

Statute of Frauds

Applies to:

- K for sale of goods over $500

Must be:

- In Writing

- Signed by the party against whom enforcement is sought

- does not necessarily require quantity

Case in which one company asked the other to develop some software for them.

Is the development of software a good or service?

When there is a close call err on the side of good in order to bring more cases under UCC

lack of specification of quantity should not be enough to void K when both parties intended the K to be binding.

UCC 2-302

Unconscionability

UCC 2-302

Unconscionability Requirements

- Was there deceprion, overreaching, and sharp business practices?

- Absence of a viable alternative (duress)?

- Unbalanced acumen, knowledge, and financial abilities of the parties involved?

UCC 2-302

Substantive Unconscionability

UCC 2-302

Procedural Unconscionability

UCC 1-304

Good Faith

Parties enter into an agreement to buy natural gas, market price drops substantially, etc.

Procedural Unconscionability? No

Substantive Unconscionability? No

Bad faith? Yes

UCC 2-202

Parol Evidence Rule

UCC 2-312

Warranty of Title and Against Infringement

Buyer's Obligation Against Infringement

seller warrants that title is good, its tranfer is rightful, and the goods are free from any encumbrance; parties can K around encumbered goods but not around stolen goods.

Truck case in which the truck has multiple VIN numbers so there is a cloud on the title. P sues for warranty on breach of title.

Result: Court holds pro-buyer rule (which is the majority rule) - mere initiation of a colorable challenge one which is not spurious, regardless of outcome, is enough to violate the warranty of title.

Minority Rule: Pro-seller, breach of warranty only when there is an outstanding superior title

UCC 2-715

Buyer's Incidental & Consequential Damages

Incidental: Burden of proof on buyer. Determine damages by looking at how closely connected to the breach the particular costs are.

Consequential: further removed from the actual breach; include any loss that reasonably results from general or particular req'ments which the seller had reason to know and which could not have been reasonably avoided by the buyer.

UCC 2-401

Passing of Title; Reservation for Security

UCC 2-403(1)

Power to Transfer; Good Faith Purchaser

purchaser acquires all title that the transferor had or had power to transfer; person with voidable title has power to transfer a good title to a good faith purchaser even if:

- transferor was deceived as to the identity of the purchaser

- delivery was in exchange for a check that is later dishonored

- was agreed that the transaction was to be a cash sale OR

- delivery was procured through criminal fraud

UCC 2-403(2)

Entrusting Goods

Any entrusting of goods to a merchant dealing in that kind of good gives dealer power to transfer the entrusting party's ownership rights to a buyer in ordinary course of business.

Goal - to enhance reliability of sales by merchants, shift burden of loss to entruster b/c he gets to choose who to trust.

Applies only to those goods entrusted in the ordinary course of a merchant's business.

third party buyer of fraudulently procured watch claims right to voidable title as good faith purchaser

- Court finds buyer did not act in good faith b/c 

- he lied about his purchase to the jeweler

- knew / should have known he was getting too good of a deal for it to be true

- must have been suspicious of some wrongdoing b/c he called the jeweler about original purchase price.

Porter entrusted a painting to "potential buyer" Von Maker, who sold the painting to Deli employee Wertz, who sells to a gallery.

Gallery argues right of ownership under 2-403 but court holds that the Gallery did not buy from an art dealer, and more importantly not from the person who was entrusted with the goods so no right of ownership.

UCC 2-313

Express Warranties

Can the representation be reasonably regarded as part of the K?

• An affirmation or promise
• relating to the goods
• that becomes part of the basis for the bargain

Specific vs. general language

capable of objective measurement

fact or opinion?

reasonable standard & relative sophistication of the parties

UCC 2-314

Implied Warranty of Merchantability

Ordinary Purpose: it is implied that the goods will be:

1. merchantable (that is, they would pass in the trade in question)
2. must be of fair average quality if the seller is a merchant of goods of that type

UCC 2-315

Implied Warranty of Fitness for a Particular Purpose

where seller at time of K has reason to know any particular purpose for which the goods are required, AND

buyer relied on seller's skill or judgment to select

UCC 2-714

Buyer's Damages for Breach in Regard to Accepted Goods

• if buyer has accepted goods and given notice, he may recover for non-conformities
• measure is difference b/t value at acceptance and value if it had been as warranted

UCC 2-608

Revocation of Acceptance

UCC 2-316

Exclusion or Modification of Warranty

WoM - must mention warranty of merchantability and be conspicuous but doesn't have to be in writing

ffpp - must be in writing and conspicuous

 UCC 2-316(2)

Exclusion or Modification Catch-All

UCC 2-206

Offer

UCC 2-316(3)(c)

Disclaimer by trade usage / industry standard

Trade usage is "any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question"

Buyer need not have actual knowledge of the trade usage, it is enough 1) that the usage is observed in the trade in which parties are involved OR 2) that the trade is one of which the parties should be aware.

UCC 2-318

Third Party Beneficiaries of Warranties

(Privity)

Horizontal Privity - Who stands in the buyer's shoes (standing to sue)?

UCC Offers three solutions:

1. Pro-seller / majority - extends to any natural person in the household or family of the buyer or a guest in his home
2. same as 1 but extends to any natural person who can reasonably be expected to use the product.
3. pro-buyer but minority - same as above but doesn't have to be a natural person (can include businesses and legally recognizable entities) and can extend beyond personal injuries to economic loss.

UCC 2-719

Limitation of Remedy

K may limit or alter the measure of damages recoverable 

resort to such remedy is optional unless specified in K as the sole remed

governs disclosure of consumer product warranties. Requires warrantors to provide consumers with detailed info about coverage on products.

Requirements:

1. product must offer full or limited warranty
2. warranty must be clear and easy to read in one document; arbitration provision must be clear and conspicuous on face of warranty; warrantors can consult with FTC for guidance to make sure offering is sufficient.

tender entitles seller to buyer's acceptance and to payment.

implicit - no obligation to accept nonconforming goods

UCC 2-606

Acceptance

Occurs when:

1. overt statements signify acceptance
2. estoppel resulting from buyers' handling of goods
3. Silence - lapse after delivery = failure to make effective rejection.

UCC 2-601

Rejection

if goods fail to conform, buyer may:

reject the whole

accept the whole

accept any commercial units and reject the rest (but not by silence)

2-601

"perfect tender rule"

UCC 2-602

Manner of rejection

must be within a reasonable time after delivery or tender

ineffective unless buyer seasonably notifies seller

UCC 2-607

Effect of Acceptance

burden is on the buyer to prove nonconformity

buyer must pay K price for any goods accepted

acceptance precludes rejection if made with knowledge of nonconformities (unless made with reasonable assumption of care)

if tender has been accepted the buyer must give timely notice he is treating as a breach

UCC 2-709

Seller's Action for Price

UCC 2-508

Cure by Seller

Seller has reasonable time to cure goods that don't conform

Seller, if K time has not yet expired, may make another delivery within the time set out by the K

Seller is given additional time if he had reasonable cause to believe that the goods would be acceptable and the K time expires prior to rejection by buyer.

UCC 2-608

Revocation of Acceptance, Whole or Part

Buyer may revoke acceptance for non-conformities that substantially impair value to him if he has accepted it

a) [time tolled] on the reasonable expectation that it would be cured and it hasn't been

b) [time may be tolled] without discovery of non-conformity if acceptance was reasonably induced by either difficulty of discovery before acceptance or seller's assurances

Buyer must give notice of revocation within a reasonable amount of time (more leniency for buyers that buy for use rather than for resale)

If you revoke you are still entitled to damages

UCC 2-725

Statute of Limitations

Action must be commenced within 4 years, parties in K may reduce this period but not to less than 1 year and may not extend beyond 4.

Cause of action accrues when breach occurs regardless of aggrieved party's lack of knowledge of the breach.