Module 3 Essay: Break Pad Order
Issue: Has a contract been formed between Sean’s Auto Body and Sunset Brakes Inc.?
Rule:
UCC 2-209: A signed agreement which excludes modification or recission except by a
signed writing cannot be otherwise modified or rescinded, but except as between
merchants such a requirement on a form supplied by the merchant must be separately
signed by the other party. Consideration is not required for the modification of a sales
contract: as long as both parties act in good faith and modification is in writing signed by
the parties.
UCC 2-206: Unless otherwise unambiguously indicated by the language or
circumstances, an order or other offer to buy goods for prompt or current shipment shall
be construed as inviting acceptance either by a prompt promise to ship or by the prompt
or current shipment…
Analysis: First and foremost, both parties in this issue are considered merchants because Sean’s
Auto Body does not only install brake pads but sells them individually to customers. As
indicated by UCC 2-206, the purchase order and acceptance of the purchase order by Sunset
Brakes, is enough consideration to form a contract between the parties. Additionally, Sunset
Brakes shipped the goods which also is a form of acceptance to the original purchase order. In
the original P.O., the language states that “Delivery is to be made by Seller (Sunset Brakes Inc.)
to Buyer’s (Sean’s Auto Body) place of business.” This is the original agreement that was
confirmed when Sunset Brakes accepted the order. If they wanted to modify the contract so
that Sean would have to pick up the brake pads from the warehouse, they would need signed
confirmation from both parties for it to be valid. UCC 2-209 asserts that although consideration
is not required for modification of a sales contract, both parties have to act in good faith and the
modification is in writing signed by both parties. Neither is this change agreed upon in writing
by Sean’s Auto Body, but Sunset Brakes is not acting in good faith by not notifying Sean of the
change to the boilerplate terms. Additionally, the silence (non-notice of modification) by Sunset
Brakes after receiving Sean’s P.O. is another form of acceptance of the original contract.
Conclusion: The contract between Sean’s Auto Body and Sunset Brakes has been established
through the acceptance of the original purchase order. The boilerplate terms initiate that
Sunset Brakes deliver the pads to the place of business of Sean’s Auto Body in return for
compensation for delivery/shipping costs and the products.
