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UCC SALES, SECOND HALF OF CLASS - Coggle Diagram

- - - - (a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;
      - (b) 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 of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.
  - - - (a) the offer expressly limits acceptance to the terms of the offer;
      - (b) they materially alter it; or
      - (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
- - - - • Modifications of a contract can be limited to “written modifications” only
      - • But an “attempted modification” (meaning, modification that fails, for instance, because it is not in a written form as required) can operate as a “waiver”
      - • For it to be a “waiver” pursuant to UCC §2-209(4), Judge Posner would require a “reliance” by the promisor (who claims that the contract was changed)
      - Modification is not a waiver
- - - - A&M Produce CO v. FMC Corp
        
        A contract provision may be unenforceable under the doctrine of unconscionability if the term was adopted through an unfair process and if the term unreasonably favors one party.
        
        The doctrine of unconscionability has a procedural component and a substantive component. Procedural unconscionability involves an unfair deal process, like where one party is coerced into accepting a contract term or surprised by the inclusion of a hidden contract term. Substantive unconscionability relates to unreasonable allocations of risk, like where one party shoulders all of a transaction’s downside without justification.
      - § 2-302. Unconscionable contract or Clause.
        
        (1) If the court as a matter of law finds the contractor any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
        
        (2) When it is claimed or appears to the court that the contractor any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.
      - § 1-302. Variation by Agreement.
        
        (a) Except as otherwise provided in subsection (b) or elsewhere in [the Uniform Commercial Code], the effect of provisions of [the Uniform Commercial Code] may be varied by agreement.
        
        (b) The obligations of good faith, diligence, reasonableness, and care prescribed by [the Uniform Commercial Code] may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever [the Uniform Commercial Code] requires an actionto be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement.
        
        (c) The presence in certain provisions of [the Uniform Commercial Code] of the phrase "unless otherwise agreed", or words of similar import, does not imply that the effect of other provisions may not be varied by agreementunder this section.
      - § 2-719. Contractual Modification or Limitation of
        Remedy.
        
        (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
    - - § 1-301. Territorial Applicability; Parties'
        Power to Choose Applicable Law
        
        a) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.
        
        (b) In the absence of an agreement effective under subsection (a), and except as provided in subsection (c), [the Uniform Commercial Code] applies to transactions bearing an appropriate relation to this state.
        
        Wright-Moore Corp. v. Ricoh Corp.
        
        A party to a contract cannot waive otherwise non-waivable legal protections through a choice-of-law provision.
      - “the mere fact that suit is brought in a state does not make it appropriate to apply the substantive law of that state”
      - Some courts use the “most significant relationship” test of the Restatement (Second) of Conflicts of Law (§ 188 of the Restatement)
  - - - § 2-202. Final Written Expression: Parol or Extrinsic Evidence.
        
        Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented
        
        (a) by course of dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); and
        
        (b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement .
        
        Nanakuli Paving & Rock Co. v. Shell Oil Co., Inc
        
        Courts can imply trade usage and course of performance into contracts if there is (1) evidence that it is consistent with the terms of the contract and (2) the purported trade usage is so prevalent that the parties would have intended to incorporate them.
      - Restatement 2nd contracts § 209. Integrated agreements
        
        (1) An integrated agreement is a writing or writings constituting a finalexpression of one or more terms of an agreement.
        
        (2) Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.
        
        (3) Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.
      - Significance of integration
        
        • an integrated agreement (=final) supersedes contrary prior statements
        
        • a completely integrated agreement supersedes even consistent additional statements (after all, it is final and complete!
    - - § 1-303. Course of Performance, Course of Dealing, and Usage of Trade.
        
        (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
        
        (b) A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
        
        (c) A "usage of trade" 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. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
        
        (d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.
        
        (e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable: and
        
        (1) express terms prevail over course of performance, course of dealing, and usage of trade;
        
        (2) course of performance prevails over course of dealing and usage of trade;
        
        (3) course of dealing prevails over usage of trade.
        
        (f) Subject to Section 2-209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.
        
        (g) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.
      - EXPRESS TERMS PREVAIL--> COURSE OF PERFORMANCE--> COURSE OF DEALING--> USAGE OF TRADE
  - - - most common open term (meaning parties may omit this term with the intention of adding it later)
      - If they cannot agree on it later -> UCC can fill in the gap
      - Contrast with common law
        
        There, the use of open-price terms frequently resulted in the avoidance of an otherwise valid contracts on the grounds of indefiniteness, illusory promise, or lack of mutuality of obligation.
      - § 2-305. Open Price Term.
        
        (1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if
        
        (a) nothing is said as to price; or
        
        (b) the price is left to be agreed by the parties and they fail to agree; or
        
        (c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.
        
        (2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.
        
        (3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contractas cancelled or himself fix a reasonable price.
        
        (4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the sellermust return any portion of the price paid on account.
      - Variable Prices
        
        Prices that depend on happening or not happening of stated contingencies
        
        Agreements to sell at market prices, or at the price charged by a particular seller on the day in question
      - Mathis v Exxon Corp
        
        Under Uniform Commercial Code § 2-305, prices in open-price contracts must be set in good faith, including both objective good faith and subjective good faith.
        
        Objective good faith means commercial reasonableness and fair dealing. If a seller can show that it set an open price at market price or at posted sale prices in effect at that time, generally, that shows objective good faith. Subjective good faith focuses on the party’s own honesty. This means looking at the seller’s actual motivation for setting a price, and whether the seller was acting with a dishonest or harmful purpose.
    - - • Parties typically specify the quantity of goods at the outset (unlike price, which they might decide to leave open for determination at some time after the contract is formed)
      - • Sometimes the quantity is determined with a degree of indefiniteness
        
        E.g., Riegel Fiber Corp. v. Anderson Gin Co., 512 F.2d 784 (5th Cir. 1975)
        
        “all the. . . cotton produced during the crop year 1973” on 4,222 acres.
      - • Requirements and Output Contracts
        
        A requirement contract is one in which a buyer promises to purchase its requirements of a good from a seller. (does not have to be exclusive)
        
        Buyer can set the framework for what is required.
        
        (offering to buy 50% of its needs still means that every time company needs something, they buy 50% from seller- still valid requirement contract)
        
        An output contract is one in which a seller promises to sell its entire production of a good to buyer.
      - § 2-306. Output, Requirements and Exclusive Dealings.
        
        (1) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded
        
        (2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.
      - Empire Gas Corp v American Bakeries Co
        
        Under a requirements contract, a buyer may reduce his requirements to zero, but only if he was acting in good faith.
    - - • Courts applying the common law did not take a dim view of opendelivery terms (= they did not regard the delivery term as so material that its inclusion was deemed necessary to make the agreement enforceable)
      - • The common law approach is the same as the one adopted in the UCC:
        
        Attempting to fill in the gaps by looking at the course of performance, course of dealing, and usage of trade,
        
        If no satisfactory result under (1), then the courts use a set of rules, which are said to be based on common practice, to fill the gap
      - • See §§ 2-307, 2-308, and 2-309
        
        § 2-307. Delivery in Single Lot or Several Lots.
        
        Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lotsthe price if it can be apportioned may be demanded for each lot.
        
        § 2-308. Absence of Specified Place for Delivery.
        
        Unless otherwise agreed
        
        (a) the place for delivery of goods is the seller's place of business or if he has none his residence; but
        
        (b) in a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery; and
        
        (c) documents of title may be delivered through customary banking channels.
        
        § 2-309. Absence of Specific Time Provisions; Notice of Termination.
        
        (1) The time for shipment or delivery or any other action under a contractif not provided in this Article or agreed upon shall be a reasonable time.
        
        (2) Where the contractprovides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.
        
        (3) Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreementdispensing with notification is invalid if its operation would be unconscionable.
        
        UCC 2-309, Comment 4
        
        When the time for delivery is left open, unreasonably early offers of or demands for delivery are intended to be read under this Article as expressions of desire or intention, requesting the assent or acquiescence of the other party, not as final positions which may amount without more to breach or to create breach by the other side. See Sections 2-207 and 2-609.r. 1984
      - § 2-319. F.O.B.
        
        (1)Unless otherwise agreed the term F.O.B. (which means "free on board") at a named place, even though used only in connection with the stated price, is a delivery term under which
        
        (a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this Article (Section 2-504) and bear the expense and risk of putting them into the possession of the carrier; or
        
        (b) when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them in the manner provided in this Article (Section 2-503);
        
        (c) when under either (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at his own expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this Article on the form of bill of lading (Section 2-323).
      - Shipment contract V Destination contract
        
        Destination contract- sellers obligation to deliver is discharged when the common carrier delivers the goods to the Buyer
        
        Shipment contract- sellers obligation to deliver is discharged when the seller delivers the goods to a common carrier
    - - § 2-510. Effect of Breach on Risk of Loss.
        
        (1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance.
        
        (2) Where the buyer rightfully revokes acceptance he may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as having rested on the seller from the beginning.
        
        (3) Where the buyer as to conforming goods already identified to the contract for sale repudiates or is otherwise in breach before risk of their loss has passed to him, the sellermay to the extent of any deficiency in his effective insurance coverage treat the risk of loss as resting on the buyer for a commercially reasonable time.
      - § 2-509. Risk of Loss in the Absence of Breach.
        
        (1) Where the contract requires or authorizes the seller to ship the goods by carrier
        
        (a) if it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is under reservation (Section 2-505); but
        
        (b) if it does require him to deliver them at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the buyer when the goods are there duly so tendered as to enable the buyer to take delivery.
        
        (2) Where the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the buyer
        
        (a) on his receipt of a negotiable document of title covering the goods; or
        
        (b) on acknowledgment by the bailee of the buyer's right to possession of the goods; or
        
        (c) after his receipt of a non-negotiable document of title or other written direction to deliver, as provided in subsection (4)(b) of Section 2-503.
        
        (3) In any case not within subsection (1) or (2), the risk of loss passes to the buyer on his receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery.
        
        (4) The provisions of this section are subject to contrary agreement of the parties and to the provisions of this Article on sale on approval (Section 2-327) and on effect of breach on risk of loss (Section 2-510).
    - - UCC article 2 provisions are "gap fillers"
      - When missing terms cannot be supplied through resort to course of performance, course of dealing, or usage of trade
      - Parties may omit a term accidentally or by design
      - UCC supplies commonly accepted terms and thereby prevents the contract from failing
    - - • In case of conflict, gap fillers are subordinated in rank to course of performance, course of dealing, and usage of trade
      - • This makes sense. Why?
      - • Because course of performance, course of dealing, and usage of trade are methods to find implied terms of the contract
      - • As implied terms, they are part of the agreement itself (“bargain of he parties in fact”)
      - • While “gap fillers” are not (part of the agreement)!
    - - • Payment (“when, where, and how”) should not be confused with the price term (“how much”)
      - • The payment term is often omitted in the sales contract
      - • Gaps can be filled by resort to course of performance, course of dealing, and usage of trade
      - • If none is available, see §§ 2-310, 2-507, and 2-511
        
        § 2-310. Open Time for Payment or Running of Credit; Authority to Ship Under Reservation.
        
        Unless otherwise agreed
        
        (a) payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery; and
        
        (b) if the seller is authorized to send the goods he may ship them under reservation, and may tender the documents of title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract (Section 2-513); and
        
        (c) if delivery is authorized and made by way of documents of title otherwise than by subsection (b) then payment is due at the time and place at which the buyer is to receive the documents regardless of where the goodsare to be received; and
        
        (d) where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but post-dating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period .
        
        § 2-507. Effect of Seller's Tender; Delivery on Condition.
        
        (1) Tender of delivery is a condition to the buyer's duty to accept the goods and, unless otherwise agreed, to his duty to pay for them. Tender entitles the seller to acceptance of the goods and to payment according to the contract.
        
        (2) Where payment is due and demanded on the delivery to the buyer of goods or documents of title, his right as against the seller to retain or dispose of them is conditional upon his making the payment due.
        
        § 2-511. Tender of Payment by Buyer; Payment by Check.
        
        (1) Unless otherwise agreed tender of payment is a condition to the seller'sduty to tender and complete any delivery.
        
        (2) Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the sellerdemands payment in legal tender and gives any extension of time reasonably necessary to procure it.
        
        (3) Subject to the provisions of this Act on the effect of an instrument on an obligation (Section 3-802), payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.
  - - - voiding the contract, or
      - distorting its true meaning by enforcing it without the missing terms.
    - - (a) how sales contracts are interpreted under the UCC, and
      - (b) methodology of supplying missing terms
- - - - § 2-107. Goods to Be Severed From Realty: Recording.
        
        (1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this Article if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.
        
        (2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in subsection (1) or of timber to be cut is a contract for the sale of goods within this Article whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present salebefore severance.
    - - If a transaction is a sale, it is not a lease!
      - Lease also does not include "retention or creation of a security interest
      - Different rules for sales and leases (in sale, oral disclaimers of implied warranties are permitted, while for leases they have to be in writing)
      - TLDR under 1-203 if there is a nominal purchase price option after the lease period it is a security interest
        
        if there is not a nominal purchase price option it is a lease ( $100 dollars v $10,000,000 dollars )
      - § 1-203. Lease Distinguished from Security Interest.
        
        (a) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.
        
        (b) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and: (1) the original term of the lease is equal to or greater than the remaining economic life of the goods; (2) the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods; (3) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or (4) the lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.
        
        (c) A transaction in the form of a lease does not create a security interest merely because: (1) the present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into; (2) the lessee assumes risk of loss of the goods; (3) the lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording, or registration fees, or service or maintenance costs; (4) the lessee has an option to renew the lease or to become the owner of the goods; (5) the lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or (6) the lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.
    - - Applies to international sale of goods transactions! See CISG Art. 1
      - Some sales are excluded from the application of the CISG! See CISG Art. 2
      - Article 3, CISG:
        
        (1) Contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes tosupply a substantial part of the materials necessary for such manufacture orproduction.
        
        (2) This Convention does not apply to contracts in which the preponderantpart of the obligations of the party who furnishes the goods consists in the supply of labour or other services.
      - CISG – Art. 1
        
        (1) This Convention applies to contracts of sale of goods betweenparties whose places of business are in different States:
        
        (a) when the States are Contracting States; or
        
        (b) when the rules of private international law lead to the application of the law of a Contracting State.
        
        • Note: CISG will only apply if conditions of Article 1 are met
        
        • The United States has made a “reservation” and is not bound by Art.1(1)(b), the U.S. is only bound by Art. 1(1)(a)
      - CISG – Art. 2
        
        This Convention does not apply to sales:
        
        (a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;
        
        (b) by auction;
        
        (c) on execution or otherwise by authority of law;
        
        (d) of stocks, shares, investment securities, negotiable instruments or money;
        
        (e) of ships, vessels, hovercraft or aircraft;
        
        (f) of electricity.
  - - - Generally, software is considered a good, although it may reflect a substantial investment of programming services
      - But! Copyrights, patents, and trademarks are “general intangibles” under the UCC and as such distinguished from goods
      - Predominant feature of the K at hand was a transfer of IP -> UCC does not apply
  - - - if sale of goods- follow UCC
      - otherwise --> follow common law of contracts
    - - How to determine Hybrid situations: use different tests
        
        predominant effects test - if predominantly goods UCC applies if predominately services common law of contracts applies
        
        factors
        
        language of contract
        
        manner of billing
        
        allocation of costs
        
        nature of final product delivered --- moveable good ; not after installation but at time of purchase/identification
        
        policy oriented approach/ gravamen test - whether the gravamen of the action (in court) involves goods or services
        
        divisible contract approach - court views hybrid transaction as 2 contracts, one for goods and one for services.
    - - "Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action. "Goods" also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty
    - - A "sale" consists in the passing of title from the seller to the buyer for a price (Section 2-401).
- - - - (1) Express warranties by the sellerare created as follows:
        
        (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goodsand becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
        
        (b) Any description of the goodswhich is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
        
        (c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
      - (2) It is not necessary to the creation of an express warranty that the seller use formal words such as "warrant" or "guarantee" or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goodsor a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.
  - - - § 2-315. Implied Warranty: Fitness for Particular Purpose.
        
        Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.
    - - § 2-314. Implied Warranty: Merchantability; Usage of Trade.
        
        (2) Goodsto be merchantable must be at least such as
        
        (a) pass without objection in the trade under the contract description; and
        
        (b) in the case of fungible goods, are of fair average quality within the description; and
        
        (c) are fit for the ordinary purposes for which such goodsare used; and
        
        (d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
        
        (e) are adequately contained, packaged, and labeled as the agreementmay require; and
        
        (f) conform to the promise or affirmations of fact made on the container or label if any.
        
        (3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.
        
        (1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.
      - To show a breach of the implied warranty of merchantability, a party must show (1) the
        ordinary purpose for which a good is used and (2) why the good is unfit.
      - Under the Uniform Commercial Code, the implied warranty of merchantability applies to a transaction even if the seller is unaware of the buyer’s intended purpose for the goods.
      - a merchant’s goods must work for the goods’ ordinary purpose. A good’s ordinary purpose is whatever purpose is commonly associated with the good in question.
  - - - (1) Subject to subsection (2) there is in a contract for sale a warranty by the sellerthat
      - (a) the title conveyed shall be good, and its transfer rightful; and
      - (b) the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.
      - (2) A warranty under subsection (1) will be excluded or modified only by specific language or by circumstances which give the buyerreason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have.
      - (3) Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyerwho furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.
  - - - (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (Section 2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.
      - (2)Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof."
      - (3)Notwithstanding subsection (2)
        
        (a) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer'sattention to the exclusion of warranties and makes plain that there is no implied warranty; and
        
        (b) when the buyer before entering into the contract has examined the goodsor the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and
        
        (c) an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
      - (4) Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (Sections 2-718 and 2-719).
- - - - (a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
      - (b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
      - (c) with respect to goods for which payment has been made and accepted or which have been received and accepted (Sec. 2-606).
- - - - (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
    - - (2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
        
        (b) they materially alter it; or
        
        (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
        
        (a) the offer expressly limits acceptance to the terms of the offer;
    - - (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.
    - - This section is intended to deal with two typical situations (see pp. 431-32):
        
        a written confirmation, where an agreement has been reached eitherorally or by informal correspondence between the parties and is followed by one or more of the parties sending formal memoranda embodying the terms so far as agreed upon and adding terms to be discussed.
        
        an offer and acceptance, in which a wire or letter expressed and intended as an acceptance or the closing of an agreement adds further minor suggestions or proposals such as “ship by Tuesday,” “rush,” or the like.
      - Examples of typical clauses which would normally “materially alter” the contract and so result in surprise or hardship if incorporated without express awareness by the other party are: a clause negating such standard warranties as that of merchantability or fitness for a particular purpose in circumstances in which either warranty normally attaches; a clause requiring a guaranty of 90% or 100% deliveries in a case such as a contract by cannery, where the usage of the trade allows greater quantity leeways; a clause reserving to the seller the power to cancel upon the buyer's failure to meet any invoice when due; a clause requiring that complaints be made in a time materially shorter than customary or reasonable.
    - - Section 2 describes what to do with additional terms but says nothing about different terms,
      - Case law addresses different terms
      - Section 1 discusses additional and different terms
    - - split in authority over whether 2-270(3)'s reference to "supplementary terms" includes course of performance, course of dealing, and usage of trade as defined in section 1-303
    - - (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
      - (b) A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
      - (c) A "usage of trade" 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. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
    - - Most courts have adopted the so called "knockout rule" when dealing with different terms under subsections 2.
        Under this approach neither party gets its way by virtue of including the disputed term in its form, and the court looks elsewhere to supply the term
    - - (1) "Merchant" means 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 or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.
      - (3) "Between Merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.
    - - Those are terms that result in "surprise or hardship"
        Judge Posner in Union Carbide: Material terms are terms where there would be no presumption of consent
- - - - (A)any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or
      - (B)any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking,
      - which written affirmation, promise, or undertaking becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product.
  - - - In order for a warrantor warranting a consumer product by means of a written warranty to meet the Federal minimum standards for warranty—
        
        (1)such warrantor must as a minimum remedy such consumer product within a reasonable time and without charge, in the case of a defect, malfunction, or failure to conform with such written warranty;
        
        (2)notwithstanding section 2308(b) of this title, such warrantor may not impose any limitation on the duration of any implied warranty on the product;
        
        (3)such warrantor may not exclude or limit consequential damages for breach of any written or implied warranty on such product, unless such exclusion or limitation conspicuously appears on the face of the warranty; and
        
        (4)if the product (or a component part thereof) contains a defect or malfunction after a reasonable number of attempts by the warrantor to remedy defects or malfunctions in such product, such warrantor must permit the consumer to elect either a refund for, or replacement without charge of, such product or part (as the case may be). The Commission may by rule specify for purposes of this paragraph, what constitutes a reasonable number of attempts to remedy particular kinds of defects or malfunctions under different circumstances. If the warrantor replaces a component part of a consumer product, such replacement shall include installing the part in the product without charge.
    - - (1)In fulfilling the duties under subsection (a) respecting a written warranty, the warrantor shall not impose any duty other than notification upon any consumer as a condition of securing remedy of any consumer product which malfunctions, is defective, or does not conform to the written warranty, unless the warrantor has demonstrated in a rulemaking proceeding, or can demonstrate in an administrative or judicial enforcement proceeding (including private enforcement), or in an informal dispute settlement proceeding, that such a duty is reasonable.
      - (2)Notwithstanding paragraph (1), a warrantor may require, as a condition to replacement of, or refund for, any consumer product under subsection (a), that such consumer product shall be made available to the warrantor free and clear of liens and other encumbrances, except as otherwise provided by rule or order of the Commission in cases in which such a requirement would not be practicable.
      - (3)The Commission may, by rule define in detail the duties set forth in subsection (a) of this section and the applicability of such duties to warrantors of different categories of consumer products with “full (statement of duration)” warranties.
      - (4)The duties under subsection (a) extend from the warrantor to each person who is a consumer with respect to the consumer product.
    - - The performance of the duties under subsection (a) shall not be required of the warrantor if he can show that the defect, malfunction, or failure of any warranted consumer product to conform with a written warranty, was caused by damage (not resulting from defect or malfunction) while in the possession of the consumer, or unreasonable use (including failure to provide reasonable and necessary maintenance).
    - - For purposes of this section and of section 2302(c) of this title, the term “without charge” means that the warrantor may not assess the consumer for any costs the warrantor or his representatives incur in connection with the required remedy of a warranted consumer product. An obligation under subsection (a)(1)(A) to remedy without charge does not necessarily require the warrantor to compensate the consumer for incidental expenses; however, if any incidental expenses are incurred because the remedy is not made within a reasonable time or because the warrantor imposed an unreasonable duty upon the consumer as a condition of securing remedy, then the consumer shall be entitled to recover reasonable incidental expenses which are so incurred in any action against the warrantor.
    - - If a supplier designates a warranty applicable to a consumer product as a “full (statement of duration)” warranty, then the warranty on such product shall, for purposes of any action under section 2310(d) of this title or under any State law, be deemed to incorporate at least the minimum requirements of this section and rules prescribed under this section.
  - - - In order to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products, any warrantor warranting a consumer product to a consumer by means of a written warranty shall, to the extent required by rules of the Commission, fully and conspicuously disclose in simple and readily understood language the terms and conditions of such warranty. Such rules may require inclusion in the written warranty of any of the following items among others:
        
        (1)The clear identification of the names and addresses of the warrantors.
        
        (2)The identity of the party or parties to whom the warranty is extended.
        
        (3)The products or parts covered.
        
        (4)A statement of what the warrantor will do in the event of a defect, malfunction, or failure to conform with such written warranty—at whose expense—and for what period of time.
        
        (5)A statement of what the consumer must do and expenses he must bear.
        
        (6)Exceptions and exclusions from the terms of the warranty.
        
        (7)The step-by-step procedure which the consumer should take in order to obtain performance of any obligation under the warranty, including the identification of any person or class of persons authorized to perform the obligations set forth in the warranty.
        
        (8)Information respecting the availability of any informal dispute settlement procedure offered by the warrantor and a recital, where the warranty so provides, that the purchaser may be required to resort to such procedure before pursuing any legal remedies in the courts.
        
        (9)A brief, general description of the legal remedies available to the consumer.
        
        (10)The time at which the warrantor will perform any obligations under the warranty.
        
        (11)The period of time within which, after notice of a defect, malfunction, or failure to conform with the warranty, the warrantor will perform any obligations under the warranty.
        
        (12)The characteristics or properties of the products, or parts thereof, that are not covered by the warranty.
        
        (13)The elements of the warranty in words or phrases which would not mislead a reasonable, average consumer as to the nature or scope of the warranty.
    - - (1)
        
        (A)The Commission shall prescribe rules requiring that the terms of any written warranty on a consumer product be made available to the consumer (or prospective consumer) prior to the sale of the product to him.
        
        (B)The Commission may prescribe rules for determining the manner and form in which information with respect to any written warranty of a consumer product shall be clearly and conspicuously presented or displayed so as not to mislead the reasonable, average consumer, when such information is contained in advertising, labeling, point-of-sale material, or other representations in writing.
      - (2)Nothing in this chapter (other than paragraph (3) of this subsection) shall be deemed to authorize the Commission to prescribe the duration of written warranties given or to require that a consumer product or any of its components be warranted.
      - (3)The Commission may prescribe rules for extending the period of time a written warranty or service contract is in effect to correspond with any period of time in excess of a reasonable period (not less than 10 days) during which the consumer is deprived of the use of such consumer product by reason of failure of the product to conform with the written warranty or by reason of the failure of the warrantor (or service contractor) to carry out such warranty (or service contract) within the period specified in the warranty (or service contract).
      - (4)
        
        (A)Except as provided in subparagraph (B), the rules prescribed under this subsection shall allow for the satisfaction of all requirements concerning the availability of terms of a written warranty on a consumer product under this subsection by—
        
        (i)making available such terms in an accessible digital format on the Internet website of the manufacturer of the consumer product in a clear and conspicuous manner; and
        
        (ii)providing to the consumer (or prospective consumer) information with respect to how to obtain and review such terms by indicating on the product or product packaging or in the product manual—
        
        (I)the Internet website of the manufacturer where such terms can be obtained and reviewed; and
        
        (II)the phone number of the manufacturer, the postal mailing address of the manufacturer, or another reasonable non-Internet based means of contacting the manufacturer to obtain and review such terms.
      - (B)With respect to any requirement that the terms of any written warranty for a consumer product be made available to the consumer (or prospective consumer) prior to sale of the product, in a case in which a consumer product is offered for sale in a retail location, by catalog, or through door-to-door sales, subparagraph (A) shall only apply if the seller makes available, through electronic or other means, at the location of the sale to the consumer purchasing the consumer product the terms of the warranty for the consumer product before the purchase.
    - - No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name; except that the prohibition of this subsection may be waived by the Commission if—
      - (1)the warrantor satisfies the Commission that the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and
      - (2)the Commission finds that such a waiver is in the public interest.
      - The Commission shall identify in the Federal Register, and permit public comment on, all applications for waiver of the prohibition of this subsection, and shall publish in the Federal Register its disposition of any such application, including the reasons therefor.
    - - The Commission may by rule devise detailed substantive warranty provisions which warrantors may incorporate by reference in their warranties.
    - - The provisions of this section apply only to warranties which pertain to consumer products actually costing the consumer more than $5.
  - - - No supplier may disclaim or modify (except as provided in subsection (b)) any implied warranty to a consumer with respect to such consumer product if (1) such supplier makes any written warranty to the consumer with respect to such consumer Product, or (2) at the time of sale, or within 90 days thereafter, such supplier enters into a service contract with the consumer which applies to such consumer product.
    - - For purposes of this chapter (other than section 2304(a)(2) of this title), implied warranties may be limited in duration to the duration of a written warranty of reasonable duration, if such limitation is conscionable and is set forth in clear and unmistakable language and prominently displayed on the face of the warranty.
    - - A disclaimer, modification, or limitation made in violation of this section shall be ineffective for purposes of this chapter and State law.
- - - - o a defect in the quality or quantity of the goods,
      - o defect in the details of delivery (e.g., delivery that is at the wrong place or time).
  - - - § 2-601. Buyer's Rights on Improper Delivery.
        
        Subject to the provisions of this Article on breach in installment contracts (Section 2-612) and unless otherwise agreed under the sections on contractual limitations of remedy (Sections 2-718 and 2-719), if the goods or the tender of delivery fail in any respect to conform to the contract, the buyermay
        
        (a) reject the whole; or
        
        (b) accept the whole; or
        
        (c) accept any commercial unit or units and reject the rest.
      - Under Article 2 of the Uniform Commercial Code, when dealing with the sale of goods, the perfect tender rule states that a buyer is permitted to reject goods shipped or delivered to it from a seller if the seller's tender of the goods is in some way not perfect.
      - Substantial performance is a doctrine, whereby one party under a contract can still recover for damages if he substantially performed his duties under the contract even though that individual failed to comply with the contract in some way.
      - § 2-508. Cure by Seller of Improper Tender or Delivery; Replacement.
        
        (1) Where any tender or delivery by the seller is rejected because non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conformingdelivery.
        
        (2) Where the buyer rejects a non-conforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conformingtender.
      - SINGLE CONTRACT- PERFECT TENDER
  - - - (1) An "installment contract" is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contractcontains a clause "each delivery is a separate contract" or its equivalent.
      - (2) The buyer may reject any installment which is non-conforming if the non-conformity substantially impairs the value of that installment and cannot be cured or if the non-conformity is a defect in the required documents; but if the non-conformity does not fall within subsection (3) and the sellergives adequate assurance of its cure the buyer must accept that installment.
      - (3) Whenever non-conformity or default with respect to one or more installments substantially impairs the value of the whole contract there is a breach of the whole. But the aggrieved party reinstates the contract if he accepts a non-conforming installment without seasonably notifying of cancellationor if he brings an action with respect only to past installments or demands performance as to future installments.
  - - - (1) Unless otherwise agreed and subject to subsection (3), where goods are tendered or delivered or identified to the contract for sale, the buyer has a right before payment or acceptance to inspect them at any reasonable place and time and in any reasonable manner. When the selleris required or authorized to send the goods to the buyer, the inspection may be after their arrival.
      - (2) Expenses of inspection must be borne by the buyer but may be recovered from the seller if the goodsdo not conform and are rejected.
      - (3) Unless otherwise agreed and subject to the provisions of this Article on C.I.F. contracts (subsection (3) of Section 2-321), the buyer is not entitled to inspect the goodsbefore payment of the price when the contract provides
      - (a) for delivery "C.O.D." or on other like terms; or
      - (b) for payment against documents of title, except where such payment is due only after the goods are to become available for inspection.
      - (4) A place or method of inspection fixed by the parties is presumed to be exclusive but unless otherwise expressly agreed it does not postpone identification or shift the place for delivery or for passing the risk of loss. If compliance becomes impossible, inspection shall be as provided in this section unless the place or method fixed was clearly intended as an indispensable condition failure of which avoids the contract.
    - - (1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.
      - (2) Subject to the provisions of the two following sections on rejected goods (Sections 2-603 and 2-604),
        
        (a) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and
        
        (b) if the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this Article (subsection (3) of Section 2-711), he is under a duty after rejection to hold them with reasonable care at the seller'sdisposition for a time sufficient to permit the seller to remove them; but
        
        (c) the buyer has no further obligations with regard to goods rightfully rejected.
      - (3) The seller's rights with respect to goods wrongfully rejected are governed by the provisions of this Article on seller's remedies in general (Section 2-703).
    - - (1) Acceptance of goods occurs when the buyer
      - (a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conformingor that he will take or retain them in spite of their non-conformity; or
      - (b) fails to make an effective rejection (subsection (1) of Section 2-602), but such acceptance does not occur until the buyerhas had a reasonable opportunity to inspect them; or
      - (c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him.
    - - • "U.C.C. § 2–606(1)(b), may of course encompass more than merely a reasonable time to inspect; here, there is no question that Finkelstein had the facilities for inspection available, and the only question on appeal was whether he waited too long.“ – Footnote 14
      - • Reasonableness hangs on standard practice or usage of trade "it is customary, when buying a racehorse, to have a veterinarian or trainer examine the horse’s legs, and we agree that the existence of this custom is very important in determining whether there was a reasonable opportunity to inspect the horse.“
      - • "a live animal is more prone to rapid change in condition and to injury than is an inanimate object."
  - - - UCC 2-612(2)
        
        A buyer in installment contract may not reject an installment that contain nonconforming goods if the nonconformity can be cured
    - - UCC 2-508
        
        Yet, under 2-508, the buyer has to reject the goods before the seller gets the right to cure
        
        If the buyer accepts nonconforming goods and asserts a claim because of nonconformity, the seller does not get the right to cure (unless the contract provides otherwise)
        
        Although we follow the perfect tender rule and the buyer can reject for any nonconformity (pursuant to UCC 2-601), in some instances the seller has the right to cure
        
        (right to cure) comes ONLY after the buyer rejects the nonconforming goods!
    - - However, when the buyer's faith in the goods is so shaken that remedying the specific part or problem would not satisfy a reasonable buyer, the buyer may revoke acceptance, and get a refund without allowing any repair. Courts often call this the shaken faith doctrine.
    - - Wilson v Scampoli
        
        A seller of nonconforming goods may conform his tender by minor repairs.
  - - - (1) The buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it
        
        (a) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or
        
        (b) without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances.
      - (2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.
      - (3) A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them.
    - - Does continued use amount to acceptance?
      - List of factors to be considered in determining whether continued use undermines a buyer’s revocation of acceptance (see pp. 446)
        
        During the period of use by the buyer, did the seller assure the buyer that the defects would be cured or that provisions would be made to compensate the buyer for the inconvenience resulting from the defects
        
        Did the seller act in good faith
        
        Did the buyers business needs or personal circumstances compel the continued use
        
        Was the seller unduly prejudiced by the buyer's continued use
        
        Upon notice of revocation, what instructions did the seller give the buyer concerning the goods
- - - - (a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the sellerof breach or be barred from any remedy; and
      - (b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.
    - - (a) he may give his seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so he will be bound in any action against him by his buyer by any determination of fact common to the two litigations, then unless the seller after seasonable receiptof the notice does come in and defend he is so bound.
      - (b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) the original seller may demand in writing that his buyer turn over to him control of the litigation including settlement or else be barred from any remedy over and if he also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt of the demand does turn over control the buyer is so barred.
  - - - (a) the transferor was deceived as to the identity of the purchaser, or
      - (b) the delivery was in exchange for a check which is later dishonored, or
      - (c) it was agreed that the transaction was to be a "cash sale", or
      - (d) the delivery was procured through fraud punishable as larcenous under the criminal law.
- - - - (a) of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer; and
      - (b) of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing.
  - - - (a) only identified goods can be sold except where there is a recognized market for a public sale of futures in goodsof the kind; and
      - (b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyerreasonable notice of the time and place of the resale; and
      - (c) if the goods are not to be within the view of those attending the sale the notification of sale must state the place where the goodsare located and provide for their reasonable inspection by prospective bidders; and
      - (d) the seller may buy.
- - - - Alternative A
        
        A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.
      - Alternative B
        
        A seller's warranty whether express or implied extends to any natural person who may reasonably be expected to use, consume or be affected by the goodsand who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.
      - Alternative C
        
        A seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume or be affected by the goodsand who is injured by breach of the warranty. A seller may not exclude or limit the operation of this section with respect to injury to the person of an individual to whom the warranty extends.
- - - - (a) the amount to which the seller is entitled by virtue of terms liquidating the seller's damages in accordance with subsection (1), or
      - (b) in the absence of such terms, twenty per cent of the value of the total performance for which the buyer is obligated under the contract or $500, whichever is smaller.
    - - (a) a right to recover damages under the provisions of this Article other than subsection (1), and
      - (b) the amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.
  - - - (a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer's remedies to return of the goodsand repayment of the price or to repair and replacement of non-conforming goods or parts; and
      - (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.
- - - - (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faithwith any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
      - (b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contractas well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable.
      - (c) The seller must notify the buyer seasonably that there will be delay or non-delivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.
- - - - that the buyer suffered a loss or injury
      - that the breach of warranty is the factual and legal cause of the injury, and
      - that the seller breached that warranty
      - the amount of loss
      - that there is a warrany with respect to the goods
- - - - Specific performance can be awarded for the sale of a limited edition vehicle if the injured party can establish that it is unique or other proper circumstances exist.
      - Section 2-716 of the Uniform Commercial Code permits specific performance when “the goods are unique or in other proper circumstances.” One proper circumstance is when the goods could only be obtained elsewhere at a considerable expense, trouble, or loss, none of which could have been expected at the time of contracting.
    - - (1) Specific performance may be decreed where the goodsare unique or in other proper circumstances.
      - (2)The decree for specific performance may include such terms and conditions as to payment of the price, damages, or other relief as the court may deem just.
      - (3) The buyer has a right of replevin for goods identified to the contractif after reasonable effort he is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered.
    - - Under the Uniform Commercial Code, the remedy of specific performance is only available for unique goods.
    - - Specific performance is no longer limited to goods which are already specific or ascertained at the time of contracting. The test of uniqueness under this section must be made in terms of the total situation which characterizes the contract. Output and requirements contracts involving a particular or peculiarly available source or market present today the typical commercial specific performance situation, as contrasted with contracts for the sale of heirlooms or priceless works of art which were usually involved in the older cases. However, uniqueness is not the sole basis of the remedy under this section for the relief may also be granted “in other proper circumstances” and inability to cover is strong evidence of “other proper circumstances”.
    - - (1) Subject to subsection (2) and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which he has a special property under the provisions of the immediately preceding section may on making and keeping good a tender of any unpaid portion of their price recover them from the seller if the seller becomes insolvent within ten days after receipt of the first installment on their price.
      - (2) If the identification creating his special property has been made by the buyer he acquires the right to recover the goods only if they conform to the contract for sale.
  - - - (1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2-612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid
        
        (a) "cover" and have damages under the next section as to all the goods affected whether or not they have been identified to the contract; or
        
        (b) recover damages for non-delivery as provided in this Article (Section 2-713).
      - (2) Where the seller fails to deliver or repudiates the buyer may also
        
        (a) if the goods have been identified recover them as provided in this Article (Section 2-502); or
        
        (b) in a proper case obtain specific performance or replevy the goods as provided in this Article (Section 2-716).
      - (3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (Section 2-706).
    - - (1) After a breach within the preceding section the buyer may "cover" by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.
      - (2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (Section 2-715), but less expenses saved in consequence of the seller's breach.
      - (3) Failure of the buyer to effect cover within this section does not bar him from any other remedy.
    - - (1) Subject to the provisions of this Article with respect to proof of market price (Section 2-723), the measure of damages for non-delivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in this Article (Section 2-715), but less expenses saved in consequence of the seller's breach.
      - (2)Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.
    - - (1) Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goodsrightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.
      - (2) Consequential damages resulting from the seller'sbreach include
        
        (a) any loss resulting from general or particular requirements and needs of which the sellerat the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and
        
        (b) injury to person or property proximately resulting from any breach of warranty.
    - - (1) Where the buyer has accepted goods and given notification (subsection (3) of Section 2-607) he may recover as damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller'sbreach as determined in any manner which is reasonable.
      - (2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goodsaccepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.
      - (3)In a proper case any incidental and consequential damages under the next section may also be recovered.
    - - (a) The remedies provided by [the Uniform Commercial Code] must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in [the Uniform Commercial Code] or by other rule of law.
      - (b) Any right or obligation declared by [the Uniform Commercial Code] is enforceable by action unless the provision declaring it specifies a different and limited effect.