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UCC Art. 2 - Coggle Diagram

- - - - Express terms can be supplemented by Sec. 1-303 CoP (this agreement), CoD (prior agreements), or UoT (industry standards)
        
        CoP: a sequence of conduct between the parties to a particular transaction that exists if:
        
        CoD: a sequence of conduct concerning previous trnasactions 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 conduct
        
        Uot is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify and expectation that it will be observed w/ respect to the transaction in question.
        
        the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
        
        The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it w/o objection
    - - Every contract or duty w/in UCC imposes an obligation of good faith in its performance and enforcement.
        
        Does not vest pre K
        
        Not a standalone cause of action
        
        Good faith means honesty in fact (subjective) and the observance of reasonable commercial standards of fair dealing (objective).
    - - Have the parties modified an existing agreement?
        
        2-209: 1. no consideration
        
        Did they expressly agree to modify?
        
        Did they wiave theri right to enforce the agreement?
        
        If yes to any of those questions, is it enforceable?
        
        Good faith is necessary
        
        Does SOF or a NOM bar enforcement?
        
        Agreement to modify may be made in the same manner that original agreement can be formed and is subject to general formation rules
        
        Did they implicityly modify their agreement through CoP?
        
        No consideration
        
        If it has a NOM, it can only be modified in writing
        
        If SOF applies to K, it applies to mod
        
        If requirements 2 & 3 are not met above, it might be a waiver
        
        2 more items...
        
        If a an oral modification of a written agreement changes the quantity or increases the price above $500, the modification will only be enforceable if it is memorialzed in writing
        
        parties may use a NOM which operates as a private SOF
  - - - Warranties of title sec. 2-312 or
        
        warranties of quality - 2-313
        
        Express Warranties
        
        When are they made?
        
        Words or conduct by the seller during negotiations or even after transaction has closed
        
        Under the UCC, do not need to coincide with formation
        
        2-323)1)(a) can be created by any AFFIRMATION OF FACT or PROMISE made by the seller to the buyer relating to the goods
        
        2-313(1)(b) created by any description made by seller to buyer relating to the goods
        
        2 more items...
        
        2-313(2)
        
        1 more item...
        
        affirmation of fact: those shoes are made of leather
        promise: will not need to be repaired for at least x months
        
        Opinion or commendation does not create a warranty
        
        to determine if a statement was an opinion
        
        2 more items...
        
        Damages for breach of express warranty
        
        difference at the time an place of acceptance between the value of goods accepted and the value they would have had if they had been as warranted
        
        Implied Warranties
        
        Warranties created by law, not promise based,
        
        default rules that may become part of the agreement if the parties have not already agreed on a term that covers the same issue
        
        Or if the term in the agreement becomes unenforceable
        
        Implied warranty of merchantability
        
        Based on the UNSTATED reasonable expectation of the BUYER that the goods are:
        
        2 more items...
        
        Breach occurs at the point of sale
        
        Implied Warranty of Fitness for a Particular Purpose
        
        Focus on a particular buyer's expectation
        
        1 more item...
        
        REQUIRES
        
        2 more items...
        
        Implies in every K, that goods sold to a buyer come with a good title free of any encumberances.
        
        Entrustment and 2-403
        
        Valid title passes when the transferor has right to pass title;
        
        voidable title is created when seller voluntarily transfers goods to buyer and something goes wrong
        
        entrustment
        
        void title occurs when there is no voluntary transfer of possession, any eventual buyer is prohibited from obtaining title
    - - A representation is an assertion of a fact, which is give by one party to induce another party to enter a K or take some other action
        
        if rep is untrue, it is inaccurate and is thus a misrepresentation, recipient is entitled to remedies for misrepresentation
      - Warranty is a future promise or affirmation of fact that an assertion of fact is true, supported by an implied promise of indemnity if the assertion is false.
        
        if warranty is untrue, it is breached, and recipient of the warranty is entitled to damages for breach of K
  - - - For terms that were not discussed, the UCC will fill in the gaps in the contract with CoP, CoD, UoT or implied terms.
        
        Must have
        
        Intent to make a K;
        
        Reasonably certain basis for giving an appropriate remedy.
      - Price sec. 2-305:
        
        Reasonable price at the time of delivery if
      - Time for Delivery sec. 2-309
        
        A reasonable time
        
        open ended K calling for repeated performances may be terminated by either party w/ reasonable notice
      - Place of Delivery sec. 2-308
        
        seller's place of biz
        
        if no place of biz, seller's residence
        
        unless K is for sale of identified goods located elsewhere, then where the goods are located is place of delivery
      - Manner of delivery unspecified
        
        Dellivery in single lots or several lots
        
        Single delivery and payment due on tender
      - Time for payment unspecified
        
        due at time and place at which buyer is to receive goods
      - When quantity is determined by output or requirement
        
        permissible under SOF for quantity to be determined by seller's output or buyer's requirement
        
        Requirement K: quantity is determined on basis of buyer's needs, except:
        
        to protect against manipulation, quantity must be in good faith and not unreasonably disproportionate to any stated estimate or comparable prior dealing.
        
        Output K: quantity determined on the basis of seller's output or production
  - - - Risk of loss passes once seller places conforming goods into hands of the carrier
        
        No added specification that seller assure the goods' arrival at a particular destination
        
        FOB Seller's place of Biz
    - - Risk does not pass to buyer until conforming goods arrive at specified destination, and tendered as to enable buyer to take delivery
        
        Seller assures goods' arrival at a particular destination
        
        FOB Buyer's place of business
    - - risk passes to buyer on buyer's receipt of document of title
    - - risk passes to buyer on buyer's receipt of the goods.
        
        If seller is C, passes on tender of delivery
    - - Sec. 2-718 Liquidation or Limitation of damages
        
        1) Damages for breach by either party may be liquidated in the agreement but only:
        
        at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach.
        
        the difficulties of proof of loss, and
        
        the inconvencience or non-feasibility of otherwise obtaining an adequate remedy
        
        May:
        
        specify a pre-determined dollar amount of damages; or
        
        specify a formula for computing them as long as the amount is reasonable in light of the anticipated or actual harm caused
        
        May Not:
        
        Cannot be disproportionate to the actual harm
        
        A penalty in disguise or interpreted as a penalty is unenforceable.
        
        Thus, Requirements for enforceability:
        
        A liquidated damages provision is enforceable only if:
        
        The damages are uncertain or difficult to quantify at the time of contract
        
        The stated amount is reasonable and proportionate to the harm suffered under the circumstances
        
        The clause does not function as a penalty
      - 2-719 Contractual Modification or Limitation of Remedy
        
        Allows parties to agree to add to, reduce or eliminate a type of remedy normally available.
        
        Allows parties to place caps or ceilings on the maximum amount of damages available
        
        Cap the maximum liabilty to the purchase price in the agreement
        
        The parties may eliminate or lime consequential damages or lost profits.
        
        Limit available remedies to:
        
        Repair; Replace; but not refund
        
        719(1)(a) Allows parties to change HOW to compute.
        
        719(1)(b) contractual rules are presumed to be optional unless the agreement expressly makes them exclusive (what to include)
        
        719(2)&(3) When can/can't do it.
        
        2: provides that if a limited remedy "fails of its essential purpose then the normal statutory remedies become available.
        
        (3) allows the parties to limit or exclude consequential damages.
        
        "fails its essential purpose" test:
        
        Identify what is the purpose of the remedy; and
        
        Whether the remedy failed to accomplish the purpose by asking "what is the outcome?"
- - - - intent to be bound manifested by words or conduct.
  - - - parties intended to make a contract
      - there is a reasonable basis for granting a remedy
  - - - in writing
      - siged by the merchant
        
        if the other party supplied the firm offer:
        
        the merchant making the FO must seperately sign the clause (OC 2)
        
        authentication (at least initialing)
        
        subsequent letterhead confirmation
        
        telegram
        
        CoD or UotT won't help here
      - gives assurances of irrevocability
      - no consideration necessary
      - during time stated
        
        if no time period is stipulated, then a reasonable time not to exceed 3 months.
        
        For more than 3 months, MERCHANT must:
        
        renew the firm offer upon original 3-month expiration
        
        Provide consideration, thus allow it for extended period until stipulated.
    - - the offeror's power of revocation may be bargained away in exchange for return consideration
      - revocable K becomes irrevocable
      - option K are formed w/ exchange of consideration
  - - - (1)(a) If offeror has not stipulated a method, then any reasonable medium and manner is acceptable
        
        reasonable medium=oral, in writing, fax
        
        reasonable manner=promise or performance as acceptance
      - (1)(b) Promise to promptly ship is proper acceptance; or
      - (1)(b) shipment of nonconforming goods (ACCEPTANCE AND BREACH AT SAME TIME)
        
        If seller notifies Buyer that non-conforming goods have been shipped, then this is NOT an acceptance. IT IS AN ACCOMODATION AKA COUNTEROFFER
      - (1)(b) Shipment of conforming goods
        
        (2) When performance is a reasonable means of acceptance, lack of notice to the offeror within a reasonable time may be treated by the offeror as a LAPSE OF OFFER.
    - - Have we formed a K? If so, what are the terms?
        
        2-207(1) allows additional OR different terms in acceptance.
        
        Unless the acceptance is expressly conditional upon assent to terms of the acceptance (magic language); THIS IS A CONDITIONAL ACCEPTANCE
        
        When acceptance has magic language, the only way a K will be formed is:
        
        Conduct
        
        2-207(3) regulates the siutation when the parties have not agreed on the terms and do not have a written K, BUT PERFORMANCE HAS COMMENCED BY CONDUCT
        
        1 more item...
        
        other party EXPRESSLY ASSENTS to add'l terms
        
        Acceptance does not contain the Mag. Lang.
        
        2-207(2) deals w/ new terms if agreement was formed under subsec. 1 ON THE WRITINGS
        
        Under 207(2): if MvC, then any add'l or different term will be a mere proposal and will not become part of K w/o assent.
        
        MvM
        
        2-207(2) add'l terms become part of K unless a, b, or c exist
        
        3 more items...
    - - Is a validly formed K enforceable?
        
        SOF is a defense, which is inapplicable if it is not:
        
        A k for sale
        
        a K for the sale of goods
        
        3 not a good
        
        4 less than $500
        
        SOF requirements:
        
        Applies to a sale of $500 or more.
        
        A writing must exist sufficient to indiat a K was made.
        
        Writing may be:
        
        1 more item...
        
        The writing is signed by the party against whom enforcement is sought
        
        2 more items...
- - - - ie: small print; legales; lack of meaningful choice; illiteracy; language barriers; deception; deficiencies in the bargaining process
    - - Ie: warranties; price; limitations on remedies
    - - Usually, both types (procedural and substantive) are necessary, unless one is in abundance.
        
        Difficult to prove and courts favor freedom of contract
- - - - Including 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 realy (Sec.2-107).
      - Things in action (not a good under art. 2)
        
        Right to recover money
        
        a claim or cause of action
        
        a right to be paid
        
        a right to possession that is recoverable by a cause of action
        
        intangible property right or asset
    - - Identified and Exisiting
      - Future goods
      - Contracts for sales can be either:
        
        Present sale of existing goods
        
        Present sale of future goods.
        
        future sale of existing goods
        
        future sale of future goods.
        
        Sec. 2-106: Sale - The passing of title from the seller to the buyer for a price.
        
        Sec. 2-106: Present Sale - sale which is accomplished by the making of the contract, aka simultaneous formation and discharge of performance.
        
        Sec. 2-106: Contract for sale - present sale of goods & contract to sell at a future time, this is a general concept that applies to all K's under Art. 2.
    - - IF SEVERED BY THE SELLER
    - - IF REMOVED BY SELLER