Sales and Leasing

  1. Course of Performance
    how parties have acted in the course of that K
  2. Course of Dealing
    The way parties have dealt with each other in prior transactions
  3. Usage of Trade
    How parties similarly situated deal with one another in the same trade
  4. Good Faith (new)
    • Quasi-merchant standard
    • honesty in fact and the observance of reasonable commercial standards of fair dealing
  5. Revised 1-301 choice of law provision
    parties can shose any law to govern their K regardless of what state parties are in (not adopted in NC)
  6. 1-201 Security Interest
    An interest in personal property or fixtures which secures payment or performance of an obligation
  7. Security interest includes:
    any interest of a cosignor and a buyer of accounts, chattel paper, payment intangible, or a promisory note in a transactionsubject to article 9
  8. Security interest does not Include
    special property interest of a buyer of goods on identification of those goods to a K for sale under 2-401, but a buyr may also acquire a security interest by complying with article 9
  9. 1-203 Transaction in the form of a lease creates a security interest if
    • the lessee is to pay the lessor for the right to possessionand use of the goods is an obligation for the term of thelease and is not subject to termination by the lessee, and:
    • (1) term of lease >=remaining economic life ofthe goods or,
    • (2) the lessee must renew the lease for the remaining economiclife of the goods become the owner or,
    • (3) the lessee can renew the lease for the remaining economic life for no additional or nominal consideration or,
    • (4) the lesseeBargain purchase option
  10. Effect of a judgment
    Entitles judgment creditor to dispossess debtor of non-exempt property and cause property to be sold and the proceeds applied towards satisfaction of the claim
  11. Replevin
    Judicial remedy to recover personal property
  12. 1-201(29) Purchase
    taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property
  13. Donee is a:
    BFP, but not for value
  14. 2-202 integration
    intended by the parties as a final expression of their agreement with respect to such terms as are included therein
  15. Integrated writings may not be
    Contradicted by evidence of any prior agreement or of a contemporaneuos oral agreement
  16. If the additional terms would certanly have been included in the document
    Evidence of their alleged making must be kept from the trier of fact
  17. A contract does not fail for indefiniteness if
    the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy
  18. Criteria for requirements contract to be enforceable
    • 1. Good faith
    • 2. no quantity that is unreasonably disproportionate
  19. Factors to consider for unreasonably disproportionate
    • 1. Amount requirements exceed K estimate
    • 2. was their a reasonable basis on which seller could forecast or anticipate increase
    • 3. amount by which market price exceeds contracted price
    • 4. was increase in MP itself fortuitous
    • 5. reason for increase of requirements
  20. Posner said this about shutting down in Requirements K
    the only test is that of good faith
  21. Shutting down is ok in requirements K if
    bkc or genuine imperiling of the very existence of entire business (doesnt have to be that severe but good test)
  22. Sale (2-106)
    passing of title from the seller to the buyer for a price
  23. Title Passes (2-401(2))
    Unless otherwise explicitly agreed, title passes to B at the time and place at which S completes performance with reference to the physical delivery of the goods (despite any reservation of a security interest)
  24. When K requires or authorizes S to send the goods to B, but does not require S to deliver them at a destination title passes
    to B at the time and place of shipment
  25. If K requires delivery at a destinations title passes
    on tender at the destination
  26. Where delivery is to be made without moving goods title passes
    • when S delivers document of title or
    • at time and place ot King, if goods present then
  27. A rejection or refusal by B to receive or retain goods
    Revests title in S, revesting is an operationof law and not a sale
  28. Purchase (1-201(32))
    taking by sale, discount, negotiation, mortgage, pledge, lien, issue or re-issue,gift or any other voluntary transaction creating an interest in property
  29. Voidable title transferring good title even though
    • 1) transferor deceived as to identity of purchaser
    • 2) Delivery in exchange for check which is later dishonored
    • 3) it was agreed that trsx was a chash sale
    • 4) delivery procured through fraud punishable as larcenous under crim law
  30. words creating puffery
    lack the specificity of an affirmation of fact upon which a warranty could be predicated
  31. Express warranties created by
    • 1) Affirmation of fact or promise made by S basis of bargain
    • 2)Description of goods made part of basis of bargain
    • c) any sample or model creates warranty that goods shall conform wito sample or model
  32. Merchantable Goods =
    • (a) pass without objection in the trade under the contract description
    • (b) for fungible goods,are fair average quality within the description
    • (c) fit for the ordinary purposes for which they'r used
    • d) run, within the variations permitted by the agreement,of even kind, quality and quantity within each unit and among all units involved
    • (e) are adequately contained, packaged, and labeled as the agreement may require
    • (f) conform to the promise or affirmations of fact made on the containeror label
  33. Warrant of Merchantability applies if:
    Contract for sale and S is a merchant with respect to goods of that kind
  34. Warranty of Particular Purpose
    Where the seller at the time of contractingknows theparticular purpose for which the goods arerequired and buyer is relyingon the seller's skill or judgment to select or furnish suitable goods
  35. To modify or exclude implied warranty of merchantability
    the language mustmention merchantability and in case of a writing must be conspicuous
  36. 1-201(10) Conspicuous
    When it is so written that a reasonable person against whom it is to operate ought to have noticed it
  37. Alternative A privity
    • (1) express or implied warranty made by S
    • (2) warranty only extends to natural persons
    • (3) Natural person has to be in FAMILY OR HOUSEHOLD or guest
    • (4) it must be reasonable to expect that this natural person may use or be effected by the goods
    • (5) person must experience personal injury
  38. 2-718 Liquidated damages ok
    if reasonable in light of probable or actual harm, difficulties in assesing loss, inconvenience and nonfeasability of obtaining adequate remedy
  39. 2-719 Limited Remedies
    if S doesnt indicate that limited remedy is the sole and exclusive remedy it's deemed legally to be cumulative
  40. 2 circumstances where revocation allowed
    • B accpeted without knowing of defect because difficult to discover (latent
    • B accepted defective goods on reasonable assumption S would cure
  41. Limitation or exclusion of consequential or injury to person
    Resulting from CONSUMER GOODS is prima facie unconscionable
  42. § 2-606. What Constitutes Acceptance of Goods.
    (acceptance occurs when buyer)
    • (a) after a reasonable opportunity to inspect the goods signifiesto the seller that the goods are conforming orthat he will take or retain them in spite of their non-conformity; or
    • (b) fails to make an effective rejection (subsection (1) of Section 2-602),but such acceptance does not occur until the buyer hashad a reasonable opportunity to inspect them; or
    • (c) does any act inconsistent with the seller's ownership;but if such act is wrongful as against the seller it is an acceptance onlyif ratified by him.
  43. acceptance precludes rejection
    unless acceptance made on reasonable assumption that non-conformity would be seasonably cured (acceptance doesnt limit other remedies)
  44. Slam dunk provision
    if B doesnt notify S of a breach within a resonable time after acceptance, B is barred from any remedy
Card Set
Sales and Leasing