16-2 Learning Objectives 1.Determine when to apply the law of sales under the UCC. 2.Describe the special rules for sales contracts. 3.Explain the four exceptions to the rule requiring that contracts for the sale of goods costing $500 or more must be in writing. 4.Judge, in a given situation, whether a writing satisfies the requirements of the UCC. 5.Contrast an auction with reserve with an auction without reserve.
16-3 Question? _________ are all things (other than money, stocks, and bonds) that are movable. A.Needs B.Wants C.Goods D.Mercantiles
16-4 The Sale and Lease of Goods Goods –all things (other than money, stocks, and bonds) that are movable. Future goods –Goods that are not yet in existence or under the control of people
16-5 Question? What is a contract that transfers ownership of goods by the seller to the buyer for a price? A.Purchase B.Merchandise contract C.Sale D.Auction
16-6 The Sale and Lease of Goods Sale –a contract that transfers ownership of goods by the seller to the buyer for a price Contract for sale –includes both a present sale of goods and a contract to sell goods at a future time
16-7 Different Laws Apply to Different Transactions
16-8 Contracts for Both Goods and Services When a contract includes both goods and services, the dominant element of the contract determines whether it is a contract for goods or a contract for services.
16-9 Special Rules for Sales Contracts Good Faith Course of Dealings and Usage of Trade Formation of a Sales Contract Offer and Acceptance Firm Offer Open-Price Terms Output and Requirements Terms Additional Terms in Acceptance Modification
16-10 Course of Dealings and Usage of Trade When the parties have dealt with each other before, their prior dealings give special meaning to sales contracts. Usage of trade
16-11 Formation of a Sales Contract An enforceable sales contract may come about even if the exact moment of its making cannot be determined and even though some terms are not completely agreed upon
16-12 Question? _________ goods are those that are in accordance with the obligations under the contract. A.Conventional B.Matched C.Non-conforming D.Conforming
16-13 Offer and Acceptance Conforming goods –those that are in accordance with the obligations under the contract Nonconforming goods –those that are not the same as those called for under the contract or that are in some way defective
16-14 Question? What is a person who deals in goods of the kind sold in the ordinary course of business? A.Proprietor B.Administrator C.Owner D.Merchant
16-15 Firm Offer The UCC holds merchants to a higher standard than non-merchants. Merchant –a person who deals in goods of the kind sold in the ordinary course of business or who otherwise claims to have knowledge or skills peculiar to those goods
16-16 Question? With a _______offer the writing must be signed by the merchant, and the time period for holding the offer open may not exceed three months. A.Firm B.Strong C.Solid D.Concrete
16-17 Firm Offer Firm offer –writing must be signed by the merchant, and the time period for holding the offer open may not exceed three months
16-18 Open-Price Terms Open-price terms –occur when the parties intend to be bound by a contract but fail to mention the price or decide to set the price later.
16-19 Output and Requirements Terms Output contract Requirements contract
16-20 Additional Terms in Acceptance A contract for the sale of goods occurs even though the acceptance states terms that are additional to or different from those offered or agreed upon (unless acceptance is made conditional on assent to the additional terms). The additional terms are treated as proposals for additions to the contract if the parties are not both merchants.
16-21 Form of Sales Contracts As long as the price is under $500, an oral contract for the sale of goods is enforceable If the price is $500 or more, a sales contract must be in writing to be enforceable.
16-22 Exceptions to the General Rule 1.Oral contracts between merchants 2.Specially manufactured goods 3.Admissions in court 4.Executed contracts
16-23 Requirements of Writing The writing that is required to satisfy the UCC must indicate that a contract for sale has been made between the parties and mention the quantity of goods being sold. It must also be signed by the party against whom enforcement is sought (the defendant).
16-24 Signature Requirements Under the UCC, a signature includes any symbol made with the intent to authenticate a writing.
16-25 International Law United Nations Convention on Contracts for the International Sale of Goods (CISG) –applies only to sales bet0ween businesses whose places of business are in different countries that have adopted the law.
16-26 Question? With an _________ the auctioneer may withdraw the goods at any time before announcing completion of the sale if the highest bid is not high enough. A.Auction with reserve B.Auction without reserve C.Contract with reserve D.Contract without reserve
16-27 Auction Sales Auction with reserve –the auctioneer may withdraw the goods at any time before announcing completion of the sale if the highest bid is not high enough Auction without reserve, –After the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time