Please enable JavaScript.

Coggle requires JavaScript to display documents.

UCC Warranties and Contracts - Coggle Diagram

- - - - (3) If the parties intend to make a contract for sale and there is a basis for appropriate remedy, one or more terms can be left open.
      - (2) An agreement can be a contract even without knowing when it was made.
      - (1) A contract for goods can be made in any form that shows agreement, including conduct by both parties recognizing a contract.
    - - (2) When beginning performance is a reasonable mode of acceptance, an offeror who isn’t notified of the acceptance in a reasonable time can treat the offer as lapsing before acceptance.
      - (1) (a) An offer to make a contract invites acceptance in any reasonable manner. (b) An order or offer to buy goods for a prompt shipment invites acceptance by prompt promise to ship or shipment of conforming or non-conforming goods. A shipment of non-conforming goods is not an acceptance if the seller notifies the buyer that the shipment is only an accommodation to the buyer.
    - - (2) If the price will be fixed by either party, they should do so in good faith.
      - (3) When a price is left open and is not fixed due to fault of one party, the other may treat the contract as cancelled or set the price themselves.
      - (4) If the parties only intend to be bound by the contract with a fixed price, and there is an open price term, there is no contract. In these cases, the buyer must return any goods they received or pay the reasonable value at the time of delivery. The seller must return any amount paid.
      - (1) Parties can create a contract even if the price isn’t explicitly stated. In those cases, the price is a reasonable price at the time for delivery if: (a) nothing is said as to price; or (b) price is left to be agreed by the parties and the don’t agree; or (c) the price is fixed by in terms of some standard to be used at the time of delivery.
    - - Mere opinion or puffery does not constitute an express warranty. However, even if an affirmation of fact does form the basis of the bargain, the parol evidence rule will generally render an express warranty unenforceable if the final terms of a subsequent written agreement disclaim or limit any express warranty. (Boud)
      - Typically bars a party who has signed a sales agreement with a limited warranty from introducing evidence of any prior express warranty. (Boud)
      - Parol Evidence Rule will generally render an express warranty unenforceable if the final terms of a subsequent written agreement disclaim or limit any express warranty. (Boud)
  - - - A purchase order is generally but not necessarily considered an offer. Depending on the circumstances, a purchase order may be considered an acceptance or written confirmation of the parties’ oral contract.
      - Based on the parties’ course of dealing, purchase orders could be reasonably considered acceptances, or written confirmations of offers that were made via telephone.
      - Bio-Tech Pharmacal, Inc.: Over 4 months, Bio-Tech made orders to IBC for materials. IBC would call Bio-Tech with the price and Bio-Tech would follow up with a purchase order (included "terms of contract" and required immediate fax/email response). IBC never sent a response. Bio-Tech wanted to cancel already shipped order.
  - - - When it appears to the court that part of the contract is unconscionable, both parties will have the chance to present evidence to aid the court in making the determination.
      - If the court finds that any part of a contract was unconscionable when it was made, the court can refuse to enforce the contract, enforce the contract without the unconscionable part, or limit application of any unconscionable part.
- - - - Mere opinion or puffery does not constitute an express warranty. (Boud)
      - Even if an affirmation of fact does form the basis of the bargain, the parol evidence rule will generally render an express warranty unenforceable if the final terms of a subsequent written agreement disclaim or limit any express warranty. (Boud)
    - - (b) any description that’s part of the basis of the bargain creates an express warranty that the goods will match the description.
      - (c) any sample or model creates an express warranty that the goods will conform to it
      - Exception: The seller doesn’t need to use formal words or have a specific intent to make a warranty. An affirmation of the value of the goods or a statement of the seller’s opinion of the goods doesn’t create a warranty.
      - (a) an affirmation or promise of fact related to the goods creates a warranty that the goods will meet that promise
  - - - (c) fit for ordinary purpose that the goods are used for
      - (d) equal quality and quantity within each unit and among all units involved
      - (e) adequately contained, packaged, and labeled
      - (f) conforms to the promises of fact on the container or label.
      - (a) pass in the trade under the contract description
      - (b) fair average quality within the description
    - - Establish Seller's Obligation
        
        To prove a breach of the implied warranty of merchantability, a plaintiff must establish a recognizable obligation on the merchant’s part. (Greene - coffee)
        
        The party claiming a breach of implied warranty must describe an objective standard to which the product was required to conform. (Greene v. Boddie - coffee)
      - The extent of a merchant’s obligation under the implied warranty of merchantability depends on the circumstances of a transaction. (Hodges v. Johnson)
      - Who's Liable: Only entities within the manufacturing, selling, or distribution chains are liable for breach of warranty. (Wallace - bike)
    - - Merchant: Merchantability of goods is implied in a contract for their sale if the seller is a merchant with respect to those kinds of goods.
      - Implied warranties may arise from course of dealing or usage of trade.
  - - - Example: Here, even though Angelone conveyed valid title to the 1985 Corvette, the vehicle was not a typical Corvette, having been rebuilt with major parts assembled from other vehicles after being destroyed in a fire. The Corvette was impounded by state police because Costa reasonably though mistakenly believed that some of the car parts were stolen. The car remained impounded at the time of trial. The title was substantially shadowed, and Saber was undeniably deprived of possession of his car. (Saber v. Dan)
  - - - Sophisticated business parties may disclaim the creation of an express warranty by description
      - 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
    - - Course of Dealing/Performance: An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade
      - Inspect Goods: When a buyer (before entering into the contract) has examined the goods or had the opportunity and refused, there is no implied warranty for an issue they would have found if they inspected the goods
    - - Whether a disclaimer is conspicuous focuses on the size of the typeset, the location of the disclaimer within the warranty, or other visible characteristics of the text. (Rinaldi)
    - - (2) To exclude or modify the implied warranty of merchantability or any part of it: (a) it must be in writing; (b) the language must mention merchantability; and (c) it must be conspicuous.
      - Example: “There are no warranties which extend beyond the description on the face hereof.”
      - All implied warranties are excluded by expressions like “as is”, “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty
  - - - There is a third-party beneficiary exception to the general privity rule (requiring direct contractual privity) when there is reliance on an underlying contract as a third-party beneficiary. (Tex Enterprises)
      - The third-party beneficiary exception is based on the underlying contract between the manufacturer and distributor, and does not exist independently of that contract.