Unit L UCC Professor Ludlum UCO Last updated Oct. 12, 2016 Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning.

What is a “Sale”? UCC Article 2 applies to the “sale of goods.” A “sale” is the passing of title of “goods” to/from a “merchant” (seller or buyer) for a price (money, goods, services, etc.). Barter is a “sale”?

What is a “Good”? A good is both tangible and movable. UCC does not apply to real estate. Intellectual property are not “goods”? Generally contracts for services are not considered goods.

Who is a “Merchant”? A Merchant: Deals in goods of the kind being sold. Holds himself out with special knowledge or skills. Is employed as a broker or agent in a transaction.

The Scope of the UCC UCC Article 2: UCC 2 preempts common law. Where UCC2 is silent, common law governs. Oklahoma adopted in 1961

If contract has (1) Merchant (2) Sale of (3) Goods Then UCC applies (Apple, Microsoft, Walmart) If not… State law applies No merchant, land, services, etc.

Spontaneous Ad for LS 4223 Commercial Transactions Law

Offer - Open Terms Article 2-204: even if terms of uncertain, a contract may still exist. Open Terms: “Indefiniteness” is OK as long as the parties intended to make a contract and there is a reasonable basis for a court to grant a remedy.

Offer - Open Terms “Open Quantity” (UCC 2-306): generally courts will NOT impose a quantity

Merchant’s Firm Offer Article 2: An offer made by a merchant is irrevocable for reasonable period of time if a written assurance is given. No consideration necessary.

Statute of Frauds Sale of goods over $500 must have a signed writing to be enforceable. Exceptions to this rule: Specially manufactured goods. Admissions by breaching party. Partial performance. Merchant doesn’t object within 10 days.

Obligations of the Seller or Lessor Seller has a duty to “tender” delivery of “conforming goods.” Tender means “delivery” to agreed place: With reasonable notice. At a reasonable hour. In a reasonable manner. Exactly, unless otherwise agreed.

The Perfect Tender Rule If goods, or tender of delivery, fail in any respect to conform to the contract, the Buyer has the right to: Accept the goods; Reject the entire shipment; or Accept part and reject part.

Remedies of the Buyer When Seller breaches its contract, Buyer has the right to: Cover: buy or lease substitute goods in good faith. Buyer can recover difference between cost of cover and contract price. Not if in bankruptcy time the Buyer learned of the breach at the place were the Seller was supposed t o deliver the goods

Sales and Lease Warranties: Title Automatically arises in most commercial sales transactions. UCC 2-312 creates 3 warranties: Good Title. No Liens. No Infringements.