Commercial Law

Class 2
The Contract For Sale
Professor Rowe
Spring 2015

Broad Course Overview

Article 2 (Sales)
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Scope
The UCC Take on General Contract Principles
Property Interests
Warranties
Performance
Remedies
Rights of Third Parties

Article 9 (Secured Transactions)

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Scope
Attachment
Perfection
Priorities
Default

 2-204: Formation in General

A contract for the sale of goods may be made in any manner
sufficient to show agreement, including conduct. ( 2-204(1))
() Contract for sale may be found even if one or more terms are
left open, as long as the parties intended to make a contract. (
2-204(3))

 2-205: Firm Offers

Certain offers which give assurance they will be held open
will not be revocable for lack of consideration if certain
conditions are met:
o Offer must be made by a merchant
o Offer must be in the form of a signed writing
o Offer will be held open for the time stated, or a reasonable time not to
exceed 3 months

If the term of assurance is on a form supplied by the offeree, it

must be separately signed by the offering party.

 2-206: Offer and Acceptance

in Formation of Contract
Unless otherwise indicated, an offer may be accepted in any
manner and by any medium reasonable in the circumstances.
( 2-206(1)(a))
An offer may be accepted even by shipment of nonconforming goods. ( 2-206(1)(b))
However, a shipment of non-conforming goods does not
constitute an acceptance if the seller seasonably notifies the
buyer that the shipment is only being offered as an
accommodation. ( 2-206(1)(b))

 2-207(1): Additional Terms

in Acceptance or Confirmation
A definite and seasonable expression of
acceptance or a written confirmation sent within
a reasonable time operates as an acceptance even
though it contains additional or different terms,
unless acceptance is expressly made conditional
on assent to the additional or different terms.

 2-207 Addresses 2 Situations

1.Written confirmation
2.Offer and acceptance

 2-207(2): Assuming a Contract, What

Becomes of Additional Terms?
Additional terms are construed as proposals for addition to the
contract. Between merchants, such terms become part of the
contract unless:
the offer expressly limits acceptance to the terms of the offer;
they materially alter it; or
notification of objection to them is given within a reasonable
time.

Additional Terms That

Materially Alter Contract
1. Clause negating standard implied warranties in circumstances
in which they would normally attach.
2. Clause requiring higher guaranty of deliveries where usage of
trade allows greater quantity leeways.
3. Clause giving seller power to cancel upon buyers failure to
meet any invoice when due.
4. Clause requiring complaints to be made in a time materially
shorter than is customary or reasonable.

Additional Terms That Are

Not Material
1. Clause enlarging sellers exemption due to supervening
causes beyond his control.
2. Clause fixing reasonable time for complaints within
customary limits.
3. Clause providing for interest on overdue invoices or fixing
sellers credit terms within range of trade practice.
4. Clause limiting right of rejection for defects or otherwise
limiting a remedy in a reasonable manner.

 2-207(3): Contract
Established by Conduct
Conduct by both parties which recognizes the
existence of a contract is sufficient to establish a
contract, even if the writings of the parties do not
otherwise establish a contract.
The terms of the contract will be those on which the
parties writings agree, along with any supplementary
terms incorporated under the UCC.

Dorton v. Collins & Aikman Corp.

White Consol. Indus. v.

McGill Mfg.

No Need For Consideration:

1. Firm offers ( 2-205)
2. Contract modification ( 2-209)

 2-209: Modification
An agreement modifying a contract for sale does not need
consideration to be binding. ( 2-209(1))
2 Limitations:
o A signed agreement excluding modification except by a signed writing
cannot be otherwise modified. Caveat: If such a provision is set forth on
a form supplied by a merchant, then the provision must be separately
signed by the other party unless the other party is also a merchant. ( 2209(2)) [merchant to consumer transaction]
o If contract as modified is within the SOF, then the requirements of the SOF
must be complied with. ( 2-209(3))