2-207

THE BATTLE OF THE FORMZ

A Definite and Seasonal Expression of Acceptance OR Written Confirmation

Which is sent within a Reasonable Time operate as acceptance

NO
YES contains
Additional
Additional Terms
Terms
if u in da box, u have halted
YES CONTRACT! formation bc lack of assent
DONE! WOW Great!
Acceptance Acceptance is NOT
ITSELF is conditional on terms
are the new terms....
conditional

Additional Look at Different

Terms the K Terms
Assent by NO
Offeror Assent
2-207(3)
No Conduct Not Yes 3 options
CONTRACT! parties still
(No K) accepted accepted 1. Knockout Doctrine
DONE perform
- Conduct 2. First Shot
(k) 3. Treatas if it was an
Buyer is Part of additional term
Buyer is a Non- K
Merchants Merchants

Part of Contract unless

2-207(2) NOT part
1. Offer limits of K
acceptance to offer
terms
2. Acceptance material
alters K (most likely)
3. Notification of
Objection to terms
already sent
 START
HERE

don’t apply parole is there a

NAH! writing? YAS!
evdc rule

don’t apply parole is the writing

evdc rule complete? YAS!

look at the evi-

dence in qustn

Before K During K After K

apply parole evdc rule! don’t apply parole
“this contract oral ☺ ☺ X evdc rule
contains
the entire Is the writing complete/is written ☺ X X
agreement” there a merger clause?

YAS! NAH!

total partial
integration integration
private
X ☺
additional
private
contradictory X X
evidence is
addit/interp X =
☺ ☺ not heard
gap filler
contradictory
X X evidence is
gap filler ☺ =
heard
WARRANTIEZ
EXPRESS WARRANTIES IMPLIED WARRANTIES OF IMPLIED FIT 4 PP FINANCE LEASES
MERCHANTABILITY 2-315
2-313 2-314 2A-315
- STATUTE two things must happen: 1. K for sale of goods - STATUTE
- affirmation 1. K for sale of goods 2. Any seller (not merchant) - affirmation
- description of good 2. Seller must be merchant 3. Particular Purpose that the buyer - description of good
- sample/model of good sees in the goods - sample/model of good
the product sold will work the 4. Seller must objectively know that
way that they were intended to the buyer is getting that good for
work/fit for ordinary purpose/etc the special reason AND buyer
must rely on seller’s explanation
of why good meets buyer’s
special needs

ANTICIPATORY REP v.
PROSP INAB. 2 PERF

Hierarchy of Contractual Did the buyer....

Interpretation 2-610 2-609

1. the Agreement

2. Course of Performance
1-303, 2-208

3. Course of Dealing
Entitled to remedy
1-303, 2-208
for breach of K
Buyer responds
4. Trade Usage with assurance
1-303, 2-208

5. UCC Gap Fillers Continue w/ K as Entitled to remedy

planned for breach of K
 STATUTE OF FRAUDS Writing Requiremnt
1. Is there a writing suffcient
to show exitence of a K
2. Signed by party seeking
to avoid K AND
3. A Quantity Term

YES, K satisfies the NO, but can we meet an

statute of frauds applicable exception?

Merchants Exception Admission in Pleadings Partial Performance Promissory Estoppel § - Promissory Estoppel Goods < $500
2-201(2) 2-201(3)(b) 2-201(3)(c) Non-Statuory 2-201(3)(a) 2-201
1. Is there a writing Party claiming there is no If either party performs There was detrminental There was detrmi- Sale of goods for less
suffcient to show exitence K, admits to its existence by shippin or pays for reliance on the part of nental reliance on the than $500
of a K in the pleadings. goods, you cant really say the party claiming there oral agreement before
2. Signed by party seek- there was no K was a K making goods “under
ing to enforce K circumstances reasonably
3. A Quantity Term indicate goods were 4 the
4.Objection sent within buyer’
10 days
5. Adctually received by
other party
 QUALITY TITLE FINANCE LEASES

1. Express Warranty - Any Seller 1. Warranty of Title - promising any rights of seller, are Finance Lease - has 3 parties involved
- Express statement about the good now buyer’s rights. a. Supplier - party that supplies the goods that will be
- Description of good was basis of the bargain leased to the lessee
- Sample/model good set standard for good A. Good Title - sale of goods, transferring all rights from b. Lessor - (the bank) role is strictly one of financing
someone with good title and has little to do with goods themselves (so no
2. Implied Warranty of Merchantability - Just Merchants B. Void Title - resulting from the purchase of title from implied warranties)
Step One: - Sale for K of goods someone who did not have good title (thief) c. Lessee - the party that wants to use the goods the
Was a warran- - By a Merchant C. Voidable Title - resulting from someone wrongfully lessor is acquiring.
ty created?
gaining good title from a seller (con man) 1. Lessee as Beneficiary of Supply Contract - benefit of
3. Implied Warranty of Fitness 4 Particular Purpose D. Entrustment Doctrine - when u entrust ur goods to supplier’s promises and warranties to lessor extend to the
- Sale for K of goods a merchant who mistakenly sells ur good to a good lessee
- Particular Purpose [not ordinary use], seller must be faith buyer in ordinary course of bis, resulting in good 2. Irrevocable Promises: Hell or High Water Clause -
aware of buyer’s necessity for particular use title for the buyer. the lessee’s promises under the lease contract become irre-
- Buyer relies on sellers affirmation that goods r fit vocable and independent of the lessee’s acceptance of the
- Any Seller goods. U must continue to pay lessor, even if item breaks!
3. Express Warranty
- Express statement about the good
DISCLAIMING QUALITY WARRANTIES DISCLAIMING TITLE WARRANTIES - Description of good was basis of the bargain
- Sample/model good set standard for good
1. Express Warranty 1. Specific Language - in writing, conspicuous
- The same conduct/language that created the express
Step Two: warranty can be used to limit the warranty. DISCLAIMING FINANCE LEASE WARRANTIES
Can we
1. Buyer has reason to know that seller did not actually
disclaim war-
ranty? 2. Implied Warranties have title at time of sale/contracting 1. Express Warranty
A. General As Is Language - The same conduct/language that created the express
B. Specific Language warranty can be used to limit the warranty.
Merchantability - must say “merchantability”, in
writing, conspicuous 2. CANT DISCLAIM Hell or High Water Clause
Fit 4 PP - in writing, conspicuous
C. Buyer’s Examination - Disclaims to extent of exam
D. Parties Agree/Course of Dealing/Course of Perform

Does the Person bringing suit have privity? Vertical Privity

Wholesaler/Manufacturer
Step Three:
Vertical Privity Horizontal Privity
Any - The ability of a buyer to sue a seller other - The ability of a non-buyer to who uses or is
Defenses? than the person who sold it to him (aka man affected by a product to sue a seller for
ufacturer) under a breach of warranty claim. breach of warranty. Seller
- Privity runs with the K, however, when the - Jurisdictional Approach
seller is sued by the buyer, he can “vouch in” ALT A ALT B ALT B
the manufacturer. If the manufacturer refuses Any natural person who Any natural person who Any natural person who
to come into the suit, he is bound by first is in the family or house- is reasonably expected to is reasonably expected to
court and is now subject to suit by the seller. hold or who is a guest use good and is injured use good and is injured Non-Buyer User Buyer User
reasonably expected to in person as a result of in person OR financially
use good and is injured use. as a result of use.
in person as a result of
use. **only bodily injury **any injury - fiscal or
Horizontal Privity
(Majority) body
**only bodily injury
RISK OF LOSS
PROVISIONS Did buyer and seller agree
to risk of loss provisions
inside the K?

YES NO

Follow the use the code to

agreed upon figure out ROL
provisions.

Is there a breach of contract

regarding the goods? AKA
did seller send the right
goods?
RED FLAG: ROL -
some bad shit went
YES breach of K, seller down when goods
sent wrong goods NO breach of were on route
2-510 K, seller sent
right goods
2-509
who How were goods sent?
breached? 1. Common carrier
2. Warehouse (bailee)
3. Direct Seller 2 Buyer
Seller Buyer

509(1) 509(2) 509(3)

Breach by failing Common Warehouse Direct Seller to
buyer rightfully buyer repudiates
to properly tender Carrier (bailee) Buyer
revokes accep- as to conforming
the right goods= goods before ROL
tance = ROL on Destination K ROL to buyer
ROL with seller Shipment K
seller from get-go passes to him,
until cure or rejec- (FOB Seller) (FOB Buyer) when: seller is seller is non-
510(2) seller can treat
tion by buyer ROL as on buyer
(default prov) ROL passes to biuyer a. buyers receipt merchant merchant
ROL passes to buyer wehn goods are ten- of title instrument risk to buyer
510(1) for a commercial- Risk to
when goods are deliv- dered as to enable b. acknowledg-
ly reasonable time
ered to carrier teh buyer to take ment by bailer, of buyer on on tender of
less any insurance receipt of delivery
delivery. the buyers right to
510(3) possess the good goods
tender = c. after receipt
seller hold conforming goods of title or writ-
at the buyer’s disposition AND ten direction re:
give the buyer notice good r delivery
ready
What happens from tender 503/507
until goods are in the hands TENDER
of the buyer. *Put, Hold, and Notify*
(Tender is not delivery)

607/608 606 reasonable 601/602

opportunity to
REVOKING ACCEPTANCE REJECTION
inspect
ACCEPTANCE 1. Take the conforming *Goods must meet the perfect
1. Substantially impaired value goods tender rule*
of the good & 2. Take the non-conform- 612 1. Rejection is reasonable
2. notice w/in rsnbl time ing goods INSTALLMENT K’s (aka goods fail PTR)
3. One of the following: 3. Ineffective rejection one promise with multiple 2. Goods are Rejected
▶ induced to accept damaged 4. Act in a manner incon- opportunities to tender - within a reasonable time
good because of promise to sistent with ownership - seasonably notified seller 508
cure by seller, but never hap- (even if reject goods REJECTION OF REJECTION OF SELLER’S HAS A RIGHT
pened. OR properly, proceed to use INSTALLMENT ENTIRE K TO CURE
▶ didn’t know about the prob- them) • installment is • substantially im- *Seller must have has a rea-
lem, because of assurance by substantially paired install- son to believe that the original
seller – "trust me its fine" OR impaired ment substan- goods were acceptable!*
▶ didn’t know about problem • seller cannot tially devalues so long as:
because, impossible 2 find cure the install- entire K • Time for performance is
during reasonable inspection ment not over
• Buyer is seasonably noti-
fied of the cure
• Seller actually cures
What about a finance lease?
Art. 2 Boundaries of Sellers R2C
Supplier → Lessor Shaken Faith Doctrine
Scope: it exploded/caused buyer trauma
→

Repetition: it doesn’t work everytime

→

Art. 2A Promise to $$$

Hell or High
Breach of
Water Clause
Warranty
Claim
If your H or If your H or
HW Clause HW Clause is
is expressly NOT expressly
negotiated in negotiated in
your K, you have your K!
→

Lessee to keep paying!

2A-517
REVOKING
ACCEPTANCE in a FIN LEASE
1. Substantially impaired value
of the good &
2. Didn’t know about the prob-
→
lem, because of assurance by
seller – "trust me its fine"
 SELLERS REMEDIES- WHEN THE BUYER BREACHES
*** SELLER NEVER GET CONSEQUENTIAL DAM**
What is the source of the
General Breach
→ problem? → Insolvency of Buyer 2-702

upon discovery of a
when buyer has breached the seller may: buyer;s inability to pay
debts, a seller may:
1. refuse delivery
except for cash$$
2-703(a) 2. stop delivery before
• withhold delivery of it occurs
goods 3. some situations re-
2-703(b) claim goods already
• stop delivery by any 2-703(e) delivered
bailee Action for 2-703(d) 2-703(e)
2 2-703(c) the Price Resale Market Price
• id contract goods for (spec. perf) Damages Damages
resale
703(f) 2-709 2-706 2-708(1) or if u hav lost volume seller:
• Cancel the K Seller only A4P under these Seller eligible for resale damages Seller may recover when: 2-708(2)
• Buyer anticipatory repu- circumstances: when: 1. Buyer repudiates contract OR Seller is a lost vol. seller if:
diated the goods 1. buyer has accepted the goods 1. buyer breaches; 2. Wrongfully fails to accept 1. u would have sold the goods OR
2. conforming goods have 2. seller reasonable identifies 2. ur ability to sell the goods never
been lost or damaged w/ goods being resold as stops
in commercially reasonable referring to the broken MP= time & place of tender. **If ur good is so desirable that you
time after risk of loss has contract FOB Seller
cant keep up with the consumer
FOB Buyer
passed to the buyer OR 3. seller gives buyer notice of (shipment K) (Destination K) need, u lose lost volume status**
3. seller has identified goods the resale; AND Market Price Market Price
to the contract and there is 4. seller resells the goods at @ Seller's @ Buyer's
location
no reasonable prospect of either a public or private sale
location

reselling them to a third party • if no notice of resale, use

for a reasonable price the §2-708 formula (unless it KP - MP + ID - ES KP - DC + ID
results in benefit to breacher,
then he gets nothing ) - market
contract
- direct
costs + damages
incidental
price + damages - saved bc of
contract incidental expenses
KP + ID price
price
breach

contract
price + incidental
damages KP - RP + ID - ES
contract
price
- resale
price + incidental
damages
- expenses
saved bc of
breach
 SELLERS REMEDIES Incidental Damages
FORUMLAZ any commercially reasonable
charges, expenses, or
2-703(e) KP + ID commissions incurred in
Action for contract
the Price price
incidental stopping delivery, in the
damages
(spec. perf) transportation, care and
custody of goods after the
buyer’s breach, in connection
with return/resale/otherwise
resulting from the breach
2-703(d)
Resale
KP - RP + ID - ES
Damages
contract
price
resale
price
incidental
damages
expenses
saved bc of
Expenses Saved bc
breach of Breach
any commercially reasonable
expenses that were saved
by seller, because they no
longer need to perform on
2-703(e)
Market Price
KP - MP + ID - ES K. Ex. sale of car to buyer in
Damages
contract market incidental expenses different state requires seller
price price damages saved bc of
breach to pay shipping costs. By
MP= time & place of tender. now selling locally, no longer
FOB Seller FOB Buyer
incur costs related 2 shipping
(shipment K) (Destination K)
Market Price Market Price
@ Seller's @ Buyer's
location location

2-708(2)
Lost Profit
Seller KP - DC + ID must be paid for regardless
Damages contract direct incidental fixed
of sale, ex. utility bills,
price costs damages costs
salaries, rent, insurance
fixed costs affiliated with
direct the specifc production/
costs assurance/delivery of the
good at issue
 BUYERS REMEDIES- WHEN THE BUYER BREACHES
***BUYS CAN GET CONSEQUENTIAL DAM**
Did the Buyer get the
YES
→ Goods? → NO

other damages
If buyer accepts non
conforming goods, then
his remedies are limited 2-716 Buyers can get CD!!! - 2-715
2-713
to Breach of Warranty Specific • Incidental Damages 2-712
Contract Market
Performance expenses reasonably incurred because of the Cover
under 2-714 Price
1.when the goods are breach Buyer purchases goods in 1. Used in cases of
VCG - VNCG + ID - CD unique; OR • Consequential Damages SUBSTITUTION of those due non-delivery of goods
2.in other proper cir- Any loss resulting from: from the seller OR
cumstances 1. needs of buyer which the seller at the • in good faith 2. repudiation by the seller
time of contracting had reasons to know • without unreasonable • in good faith
AND delay • without unreasonable
2. which could not covered; AND
delay
3. breach of warranty proximate cause of
injury RBPP + CC – KP + ID + CD – ES

MP= time u learned of breach

2-718 & place of _______.
Lost Profit Seller
(middleman seller) buyer rejects non-delivery or
or revokes repudiation by
acceptance the seller
2-718 upon arrival MP @ time of
2-712 No Cover (Market Price) MP @ time breach and
Cover 3 Approaches and place of place of tender
breach - arrival
adn rejection
Literal Formula Allied Canning Ap- Texpar Approach: Literal Statutory Damages: of good
RBPP + CC – KP + ID + CD – ES proach: limit to lost The greater of: RBPP + MP – KP + ID + CD – ES location
• There are NO Damages profits (otherwise • MP – KP, or • MP = time of breach, place RBPP + MP – KP + ID + CD – ES
Down the Line included in include DDL also) • CD of tender
CD because you covered! ***only applies if • CD = includes damages
• LP is ALWAYS going to be end-user-buyer does buyer must pay and lost
the same as CC – KP not sue supplier profits
***For Curtis, if you covered, • If you COULD have cov-
DO NOT INCLUDE CD! ered, but didn’t, CD only
includes amount of lost
profits that you would have
gotten if you covered.
 2-714
Breach of Warranty Dam-
ages for Buyer Accepts
VCG - VNCG + ID - CD consequential damages - naturally
and foreseeable damages arising from
Non-Confrmoing/Fail to value of value of non- incidental consequential the breach including lost profits and
damages down the line
conforming conforming damages damages
Revoke good (k Price) good

difference of these should

be the cost to fix or replace
the good

RBPP + CC – KP + ID + CD – ES
2-712 return of cost of contract incidental consequential expenses
Cover purchase price cover price damages damages saved
to buyer

2-713
RBPP + MP – KP + ID + CD – ES
Contract Market return of market contract incidental consequential expenses
purchase price price price damages damages saved
Price
to buyer

MP= time & place of tender.

FOB Seller FOB Buyer

(shipment K) (Destination K)
Market Price Market Price
@ Seller's @ Buyer's
location location
SELLER LIQ.DAM!

2-718
Liquidated
Damages
• reasonable in light of the
anticipated or actual harm
caused by the breach an
• unreasonable liquidated
damages clause will be void

LD Clause in K; LD Clause in K; No LD Clause in K;

Buyer has not made Buyer has made Buyer has made
down payment down payment down payment

common law ideas breaching buyer Statutory Liquidated

of reasonableness to may get some of the Damages
uphold LD apply prepayment back if 2 Approaches
prepayment is higher;
OR Literal Statutory
may be responsible for Liquidated Damages
additional remedies
the lesser of:
if prepayment is less 1 • 20% total obligat-
than LD clause Restitution = Prepayment – ed performance or – sellers – benefit to
• $500 or damages buyer
• Prepayment

literal application of restitution back to buyer when deposit and

or buyer breach

NERI Application
the lesser of:
• 20% total obligat-
2 Restitution = Prepayment – the greater ed performance or – benefit to
of: • $500 or buyer
• Prepayment

OR
sellers damages

formula ONLY applicable if seller has actual damages