BLAW FINAL NOTES DEC 4TH REVIEW CLASS DEC 11TH NO CLASS READING DAY October 30 2013 Contracts Covered by the Uniform Commercial Code UCC 1957 adopted comprehensive law scheme that includes statutes laws that govern certain kinds of commercial transactions 9 Sections articles o Promote certainty o Promote easy business relations Article 2 Applies to goods material things MUST TRANSFER OWNERSHIP Law of Sales The present transfer of personal tangible property for value o Does not apply to Service Contracts pay a fee to have something done haircut Real Property sale of land Bond promise to repay money at a later date w interest Bialant give possession or control of personal property to another person Share of stock ownership interest in a company No transfer of tittle ownership Bialor Person giving up the property Biablee Person who accepts the property o Giving broken IPhone to the Apple store to fix Gifts transfer of title but not value o Does apply to Oil Gas and minerals if the person selling them took them out of the ground Crops applies to all sales of crops Merchant a person who deals in the kinds of good evolved in a transaction Held to a higher standard must abide by more rules Car business men selling cars merchants Tennis business selling a motorcycle not a merchant Terms Open term in a contract for sales governed by article 2 if certain terms are missing article 2 allows you to fill in some of the terms In order for the terms to be filled in o The parties must have intended to enter into a contract o There must be a reasonable way to fill in the terms o Both must be merchants Price what was reasonable for the good at the time of the sale Time of Delivery reasonable amount of time for the good bananas have a short time length Doesn t have a place for delivery then the buyer must pick up the goods from the seller Time of Payment buyer must make payment when the get the good o Can NEVER fill in quantity the amount of goods o Merchant Firm Offer Rule Only Applies Written agreements Merchants If a merchant promises in writing to keep an offer open for a reasonable period of time he cannot revoke the offer even though he received no consideration Merchants are only bound for three months even if they say 6 o Accommodation type of counteroffer The seller who is a merchant sends a different good then what the parties agreed to Seller must tell the buyer that this is an accommodation If buyer accepts the accommodation there is a contract The buyer can reject the accommodation o Under the UCC you can add additional terms to a contract Both parties must be merchants Additional Term Rule In a contract between merchants the offeree adds additional non material terms to be come a part of the contract unless rejected by the offeror within a reasonable period of time o Pre existing Duty Rule A promise lacks consideration if a person promises to perform an act he she is already obligated to do o Statue of Frauds only goods over 500 between merchants The Written Confirmation Rule both parties must be merchants if one of the merchants confirms the terms of the contract in writing the merchant who receives the confirmation has 10 days reject the confirmation and to raise the Statue of Frauds or they cannot raise it as a defense o Specifically Manufactured Goods something custom can never raise statue of frauds as a defense if The goods were made specifically for the buyer Cant sell the goods to anyone else You have completed making the good or made substantial progress towards the good o Types of Delivery of Goods When goods are sold ownership passes from the seller to the buyer Free On Board FOB type of shipping contract covers who has the risk of loss during delivery Rick of damages is passed from the seller to the buyer when the goods are given to the carrier UPS FOB Destination the risk of loss passes from the seller to the buyer when the goods reach a particular destination House Free Alongside partial destination contract the risk of loss passes when the goods are next to a specific type of transport Splits the risk Cash on Delivery COD shipping contract pay when to goods are delivered The risk of loss passes from the seller to the buyer when the goods are given to the carrier Goods that are getting picked up by the buyer Merchant Rule the risk of loss passes from the merchant seller to the buyer when the goods are in the possession of the buyer Non merchant Rule the risk of loss of a non merchant seller passes from the seller to the buyer when the seller tells the buyer the goods are ready to be picked up Damage to goods before they get to the buyer Identified Goods specific and unique goods o If an identified good is destroyed before delivery the contract is void it cannot be enforced o If an identified good is damaged before delivery the buyer can reject the contract or the parties can agree to a price reduction Unidentified Goods replace the good o Destroyed the contract is still enforceable the seller is still able to o Damaged the seller has the right to replace them Stolen Goods o A buyer who receives a good which was stolen by force or theft gets void title They re not entitled to keep the good o A buyer obtains voidable title if the goods that when received were stolen were obtained by fraud The victim of fraud cant get the good back from an innocent buyer Innocent buyer didn t know the goods were stolen and paid consideration for them o Gift a man steals a watch and gives it to his girlfriend the guy can get his watch back because there is no consideration Merchant Entrustment Rule o If goods are given by a person who owns the goods to a merchant who sells those goods for a living a person who purchases the goods from the merchant acquires good title Conditional Sales A condition must be met before title can pass from seller to buyer o Sale on Approval possession of the goods is with the buyer Until the buyer excepts the goods the title remains with the seller o The title passes when 1 When the buyer expresses they want the good 2 When the buyer fails to reject the contract within a certain amount of time Sale of Return title passes to the buyer at the time of the sale but the buyer has an agreed upon time to return the goods o Must be a fixed period of time Consignment allows a seller to sell the goods but pay the supplier of the goods at a later time when the goods are sold o Consignor The person who provides the goods o Consignee The person who receives the goods o When