6 The UCCThe Uniform Commercial Code (UCC) is a collection of laws that governs various types of business transactions.When you have a contract involving goods, the UCC will apply.
7 The Sales ContractA sales contract may involve either a sale or a contract to sell.
8 The Sales ContractEvery time you buy goods and take ownership of them, a sale occurs.However, if you will take ownership at some future time, the agreement is a contract to sell, not a sale.
9 Contracts for Both Goods and ServicesWhen a contract includes both goods and services, the dominant element determines the type of contract.
10 Contracts for Both Goods and ServicesIf the sale of goods dominates, the laws of the UCC apply.If the performance of service dominates, the common law of contract applies.
11 Special Rules for Sales Contracts With some exceptions, the UCC applies to all sellers and buyers of goods.
12 Special Rules for Sales Contracts A merchant is a business or person who deals regularly in the sale of goods or who has a specialized knowledge of goods.A non-merchant is a casual or occasional seller.
13 Special Rules for Sales Contracts A sales contract must contain the same elements as other contracts, but the UCC has relaxed some of the strict rules of contract law.
14 Good FaithParties to a sales contract must treat each other fairly.
15 Methods of Dealing and Usage of Trade When parties have previously dealt with each other, those methods of dealing may be used to supplement or qualify the terms of their sales contract.
16 Methods of Dealing and Usage of Trade This rule is true with any usage of trade, which is the method of dealing that is commonly used in the particular field.
17 Formation of a Sales Contract You may make a contract in any manner that shows that the parties have reached an agreement.
18 Acceptance of an OfferIn most situations, you may accept an offer by any means and in any reasonable manner.
19 Different or Additional Terms An acceptance may have different or additional terms added without a complete rejection of the offer.
20 Firm OfferA firm offer is a merchant’s written promise to hold an offer open for the sale of goods.It does not require payment to be binding.
21 Open-Price Terms A sales contract may be made without a settled price. Unless the parties agree on a price prior to delivery, a reasonable price can be settled at the time of delivery.
22 Output and Requirement Terms Output and requirement contracts are allowed even if they are not definite.
23 Output and Requirement Terms An agreement to buy all of the manufacturer’s goods is anoutput contract.A requirement contract occurs when a seller agrees to supply the needs of a buyer.
24 ModificationNo consideration is necessary to change a contract for the sale of goods.The modification may be oral, unless the original agreement is in writing and states that it must be modified in writing.
25 Leasing GoodsYou can apply the sale-of-goods rules to the leasing of goods, with a few modifications.
26 Form of Sales Contracts Many sales contracts are oral rather than written. As long as the price is less than $500, an oral contract for the sale of goods is enforceable.
27 Form of Sales Contracts If the price is $500 or more, a sales contract must be in writing to be enforceable with the following exceptions:
28 Exceptions to the $500 rule Written confirmation of an oral contract between two merchants is sent within a reasonable time, and no objection is made within ten days.
29 Exceptions to the $500 rule The contract involves specially manufactured goods that cannot be resold easily.
30 Exceptions to the $500 rule The buyer receives and accepts the goods or pays for them.The parties admit in court that they entered into an oral contract.
31 Anton Carapoli makes handcrafted violins for professional musicians Anton Carapoli makes handcrafted violins for professional musicians. His instruments are famous and sell for over $20,000.
32 If Carapoli and a buyer contract orally for a violin, is the contract enforceable if the buyer later refuses to pay the agreed sum?
33 ANSWERYes. A Carapoli violin is a specially manufactured good.
34 Other Sales Governed by UCC Rules Other sales governed by the UCC rules include auction sales and bulk transfers.
35 Auction SalesIn an auction with reserve, the auctioneer doesn’t have to sell the goods for the highest bid if it’s lower than the reserve amount.The auctioneer may withdraw the goods at any time before a sale is completed.
36 Auction SalesIn an auction without reserve, the auctioneer must sell the goods to the highest bidder.The goods cannot be withdrawn from bidding unless no bid is made.
37 Auction SalesAn auction sale is with reserve unless it is expressly stated that it is without reserve.
38 Bulk TransfersSometimes a business transfers all merchandise and supplies at once, known as a bulk reserve.
39 Bulk TransfersThe UCC rules require that the buyer of the bulk goods notify all of the seller’s creditors at least ten days before the transfer will take place.
40 Reviewing What You Learned When do you use the law of sales? Section AssessmentReviewing What You LearnedWhen do you use the law of sales?
41 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnswerFor the sale and lease of goods.
42 Reviewing What You Learned Section AssessmentReviewing What You LearnedWhat special rules apply to sales contracts?
43 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnswerMust be in good faith; may be supplemented with methods of dealing and usage of trade; may result from the parties’ conduct; offer may be accepted by any reasonable means;
44 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnsweracceptance may include terms different than those in offer; consideration not required for firm offer; price need not be settled; out put and requirement contracts allowed; may be modified without consideration.
45 Reviewing What You Learned Section AssessmentReviewing What You LearnedWhen must sales contracts be in writing? What are the exceptions?
46 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnswerFor sale of goods for $500. Exceptions: oral contracts between two merchants when a confirmation is sent and no objection made; oral contracts for specially manufactured goods; admissions in court; executed oral contracts.
47 Reviewing What You Learned Section AssessmentReviewing What You LearnedWhat are some rules for auctions and bulk sales?
48 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnswerIn an auction with reserve, the auctioneer need not accept the highest bid. In an auction without reserve, the auctioneer must accept the highest bide.
49 Reviewing What You Learned Answer Section AssessmentReviewing What You LearnedAnswerThe UCC rules require that the buyer of bulk goods in a bulk transfer notify all of the seller’s creditors at least ten days before the transfer will take place.