1L Contracts UCC governing Principles

  1. Define firm offer:

    • An offer by a merchant to buy or sell goods in a signed writing which
    • gives assurance that it will be held open is not revocable, for lack of
    • consideration for a reasonable time

    • (i) UCC Art. 2 (Sales) Section
    • 2-205: Promise but no consideration is required
  2. Element of signed writing requirement:
    ANY SYMBOL; Any language, printed, typed, short hand, logo, initial, e-signature…
  3. Reasonable Time Element:
    • i. Irrevocable for time
    • stated

    • ii. Less than 3 months
    • but not exceed that time

    iii. To extend effectiveness… add consideration and make it a option contract
  4. Is consideration needed for UCC?
  5. What does 2-207 apply to:
    • Applies
    • only to the sale of goods
    • (something moveable)

    Predominate factor=goods

    • Applies to consumers and
    • merchants
  6. 2-207(1):
    • Acceptance is a definite and
    • seasonable expression of assent or written confirmation*

    • 2-207(1) was designed to deal with two
    • situations:

    (i) Written Confirmation- oral agreement followed by written confirmation which varies from the terms of the oral agreement

    • (ii) Varying Acceptance - a definite and seasonable expression of acceptance. Occurs where a purported
    • acceptance varies from that of the original offer.
  7. Under 2-207...

    What's the general rule for purchase orders, price quotes...
    Purchase order are generally offers

    • Price quotes do not constitute an offer (but rather a
    • proposal to enter into negotiations

    Acknowledgment of purchase order or written confirmation of an oral agreement is usually acceptance...
  8. 2-207(2)- Additional Term Rules
    • Additional Terms: terms in acceptance but not in the offer
    • (i) NOT between merchants (merchant to consumer) additional terms= mere
    • proposals for addition to the K and do not become part of agreement UNLESS
    • party expressly agrees to those terms coming in.

    (ii) Between Merchants, additional terms will automatically become part of the K UNLESS:

    • 1. Offer expressly limits acceptance to terms of offer
    • “Acceptance is limited to the terms stated in this order”

    2. The terms materially alter the contract OR

    • a. When a purchase order and acknowledgement forms differ significantly
    • Materially alter=cause undue surprise or hardship

    3. Expressed objection to terms prior to acceptance or within a reasonable time after acceptance.
  9. 2-207(2) Different Term Rules
    • terms in the offer and acceptance but
    • conflict btwn parties

    • Courts
    • have taken 3 approaches:

    • (i) Treat the
    • different terms the same way you treat additional terms

    (ii) Knock out- the different terms are knocked out and supplemented w/ terms from the code

    (iii)Drop out- the different terms fall out and are NOT replaced.

    • *For exam—go through all approaches except if a
    • specific approach provided
  10. 2-207(3):
    Contract based on the parties’ conduct

    • expressly limited v. acceptance
    • expressly conditional; but they act like they have a contract.

    (i) Conduct: No, then no contract

    (i) If yes, then what are the terms of the contract?

    • 1. Terms the
    • parties agree upon, AND

    • 2. Terms the
    • parties don’t agree on is knocked out and replaced w/ gap fillers
  11. What is magic language? Who can give it and what does it do?

    What is limiting language?
    MAGIC LANGUAGE: Offeree: “Acceptance is made expressly conditional upon assent to the additional and/or different terms contained herein.”

    • 1. Prevents a
    • contract from forming and constitutes a counteroffer.

    • 2. Only magical
    • if contained in the ACCEPTANCE. If you see it in the offer it is considered
    • limiting language. Offeror states
    • “offer expressly limits acceptance”… not magic just limiting language which
    • prevent additional terms from become part of K between merchants
  12. General rule w/ UCC and mirror image
    Mirror image is rejected and not enforced
Card Set
1L Contracts UCC governing Principles
Contracts UCC governing Principles: Firm Offers (2-205), Sale of Goods (2-207)