Here are some of the most common issues you will see on a UCC contracts essay and how you should start off your rule statements.
This is not an exhaustive list. Only use those topics that are applicable to the essay.
Applicable Law
The Uniform Commercial Code (UCC) governs all contracts for the sale of goods, while common law governs all other contracts. Goods are defined as movable, tangible objects at the time the contract was entered into. When a contract includes both services and goods, the contract will be governed by whichever predominates the contract.
Parties
Certain rules of UCC Article 2 only apply to merchants. Merchants are those who either regularly deal in the type of good sold, or claim to have specialized knowledge in the type of good sold.
Contract Formation
In order to determine the rights of the parties, it is first necessary to ascertain whether or not a valid contract was formed. A valid contract requires (1) Mutual assent (offer and acceptance) (2) Consideration (or a valid substitute) (3) No defenses.
Offer
An offer is a manifestation of intent to be bound by certain and definite terms communicated to an identifiable party. To be binding, an offer must clearly manifest an intent to be bound such that a reasonable person would view it as inviting acceptance.
Catalog
Catalogs are generally not considered offers because they lack the three requirements for offers. There is no intent to be bound, there are no certain and definite terms regarding quantity, and there is no identifiable party to accept. Thus, catalogs are usually considered invitations to offer.
Phone call that also asks for a sample
A's phone call to B on January 1 does not qualify as an offer. Although it contained the definite terms of quantity, price, and quality, and was communicated to an identifiable offeree, B, the request for a sample widget demonstrates that A had no intention to be bound by the order. Thus, the call was not a valid offer.
Order form sent after a phone call
Unlike the phone call, the order form has all of the necessary elements of an offer. It has the same terms communicated during the phone call with the additional term that B must adhere to the sample. Based on the prior negotiations and the effort that goes into preparing an order form, it was manifested that A had the intent to be bound. Finally, the order form clearly identifies B as the offeree. Thus, the order form was a valid offer.
Acceptance
Under the UCC, any reasonable means of acceptance is considered a valid acceptance.
Perfect Tender Rule
Under the UCC, the Perfect Tender Rule requires that performance fully satisfy the terms of the offer, otherwise the acceptance is also a breach.
If the seller sends goods with a good faith belief that they are conforming, he may cure and send conforming good as long as the date of performance has not lapsed.
If the seller provides the non-conforming goods with a notice that they are an accommodation, the buyer can either accept the goods and enter into the contract or reject the goods without liability to the seller.
Consideration
Consideration is defined as a bargained for legal detriment or benefit.
Statute of Frauds
Under the UCC, all contracts for the sale of goods for $500 or more, or those that cannot be performed in one year or less must be in writing and signed by the party to be charged.
However, UCC 2-201 provides that in contracts between merchants, a detailed written memorandum that (1) confirms the terms orally agreed upon and (2) is not objected to within 10 days of delivery, satisfies the Statute of Frauds requirement.
Breach
By sending nonconforming goods, the seller both accepted and breached the contract under the UCC. The issue is whether the breach amounts to a material breach.
Parol Evidence Rule
The Parol Evidence Rule precludes the introduction of any evidence from prior oral or written negotiations in order to contradict, change, or add to the terms of a fully written integrated contract. The only exceptions are to prove defenses to formation such as fraud, clear up an ambiguity or to demonstrate that a condition precedent to formation has not been satisfied.
Integration is determined by one of two theories. The traditional, or Williston approach, looks at the four corners of the document and determines whether it contains all of the essential terms of a contract and thereby must be the full and final expression of the parties' intent. The modern, or Corbin approach, analyzes integration more broadly. Under this approach, the court reviews the document and surrounding circumstances including the parties' history, the norm in the industry, etc.
Right to Inspect Goods
Under the UCC, the buyer has the right to inspect goods within a reasonable time of performance and may reject nonconforming goods. If the buyer elects to waive the non-conformity, it must pay for the accepted goods.
This is not an exhaustive list. Only use those topics that are applicable to the essay.
Applicable Law
The Uniform Commercial Code (UCC) governs all contracts for the sale of goods, while common law governs all other contracts. Goods are defined as movable, tangible objects at the time the contract was entered into. When a contract includes both services and goods, the contract will be governed by whichever predominates the contract.
Parties
Certain rules of UCC Article 2 only apply to merchants. Merchants are those who either regularly deal in the type of good sold, or claim to have specialized knowledge in the type of good sold.
Contract Formation
In order to determine the rights of the parties, it is first necessary to ascertain whether or not a valid contract was formed. A valid contract requires (1) Mutual assent (offer and acceptance) (2) Consideration (or a valid substitute) (3) No defenses.
Offer
An offer is a manifestation of intent to be bound by certain and definite terms communicated to an identifiable party. To be binding, an offer must clearly manifest an intent to be bound such that a reasonable person would view it as inviting acceptance.
Catalog
Catalogs are generally not considered offers because they lack the three requirements for offers. There is no intent to be bound, there are no certain and definite terms regarding quantity, and there is no identifiable party to accept. Thus, catalogs are usually considered invitations to offer.
Phone call that also asks for a sample
A's phone call to B on January 1 does not qualify as an offer. Although it contained the definite terms of quantity, price, and quality, and was communicated to an identifiable offeree, B, the request for a sample widget demonstrates that A had no intention to be bound by the order. Thus, the call was not a valid offer.
Order form sent after a phone call
Unlike the phone call, the order form has all of the necessary elements of an offer. It has the same terms communicated during the phone call with the additional term that B must adhere to the sample. Based on the prior negotiations and the effort that goes into preparing an order form, it was manifested that A had the intent to be bound. Finally, the order form clearly identifies B as the offeree. Thus, the order form was a valid offer.
Acceptance
Under the UCC, any reasonable means of acceptance is considered a valid acceptance.
Perfect Tender Rule
Under the UCC, the Perfect Tender Rule requires that performance fully satisfy the terms of the offer, otherwise the acceptance is also a breach.
If the seller sends goods with a good faith belief that they are conforming, he may cure and send conforming good as long as the date of performance has not lapsed.
If the seller provides the non-conforming goods with a notice that they are an accommodation, the buyer can either accept the goods and enter into the contract or reject the goods without liability to the seller.
Consideration
Consideration is defined as a bargained for legal detriment or benefit.
Statute of Frauds
Under the UCC, all contracts for the sale of goods for $500 or more, or those that cannot be performed in one year or less must be in writing and signed by the party to be charged.
However, UCC 2-201 provides that in contracts between merchants, a detailed written memorandum that (1) confirms the terms orally agreed upon and (2) is not objected to within 10 days of delivery, satisfies the Statute of Frauds requirement.
Breach
By sending nonconforming goods, the seller both accepted and breached the contract under the UCC. The issue is whether the breach amounts to a material breach.
Parol Evidence Rule
The Parol Evidence Rule precludes the introduction of any evidence from prior oral or written negotiations in order to contradict, change, or add to the terms of a fully written integrated contract. The only exceptions are to prove defenses to formation such as fraud, clear up an ambiguity or to demonstrate that a condition precedent to formation has not been satisfied.
Integration is determined by one of two theories. The traditional, or Williston approach, looks at the four corners of the document and determines whether it contains all of the essential terms of a contract and thereby must be the full and final expression of the parties' intent. The modern, or Corbin approach, analyzes integration more broadly. Under this approach, the court reviews the document and surrounding circumstances including the parties' history, the norm in the industry, etc.
Right to Inspect Goods
Under the UCC, the buyer has the right to inspect goods within a reasonable time of performance and may reject nonconforming goods. If the buyer elects to waive the non-conformity, it must pay for the accepted goods.