Week 2 Project BUS3055

Additional Materials

View the PDF transcript for UCC Provisions (media/transcripts/Week_2/SUO_BUS3055_W2_L2_Contracts%20for%20the%20Sale%20of%20Goods.pdf? _&d2lSessionVal=EMn4rxWxXilKwFSCbq2Mk8ydE&ou=78037)

Contracts for the Sale of Goods

A contract for the sale of goods is an agreement between a buyer and a seller. To form a contract, one party must initiate an offer, another party must accept, the offer, which forms the agreement. Something of value (consideration) must be exchanged. The parties must have mental capacity and the contract must have a legal purpose.

A sale of goods is de�ned as transfer of title to tangible personal property for a price. A price may include the payment of money, exchange of other property or the performance of services. Sales contracts are governed by Article 2 of the Uniform Commercial Code (UCC). Article 2 covers the sale of goods, including cars, boats, electronics and clothing (UCC 2-105). It speci�cally does not cover the sale of

1. Services

2. Intangibles, such as investment securities, such as stocks and bonds

3. Insurance policies and commercial paper

4. Real estate

5. Bailments

6. Gifts

At common law once a valid offer is unequivocally accepted, a binding contract is formed. The UCC allows for open pricing, payment and delivery terms, even if terms are unde�ned. Inde�niteness in the open terms is acceptable as long as the parties intended to make a contract and there is a reasonable basis for a court to grant a remedy. (UCC 2-204)

Unless the offer speci�es a method of acceptance, the UCC allows for any reasonable means of acceptance of a contract. When the party accepting the contract includes additional terms, the contract is formed according to the original terms without the added terms if only one party to the contract is a merchant. If both parties are merchants, the contract will include the new terms unless the original offer speci�cally limits terms or the terms represent a material change to the contract or the offer or objects in a reasonable time.

Sales of goods in the United States are regulated by Article 2 of the Uniform Commercial Code (UCC). Adopted by most states, the UCC is a collection of suggested laws that provide uniformity for resolving issues that arise in commercial transactions. Article 2 applies to sales between merchants and non- merchants. A merchant is "a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction" (U.C.C. § 2-104).

International sales of goods are generally governed by the Convention on Contracts for the International Sale of Goods (CISG), which is similar to Article 2 of the UCC. The CISG does not apply to goods purchased for personal or household use, ships or aircraft, securities, negotiable instruments and goods sold at auction.

The UCC is a complicated compilation of laws. Let’s examine some of the most important parts of the UCC, with emphasis on the parts related to sales, e- commerce and contracts.

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