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Unit 14

Contracts under the Uniform Commercial Code

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Definition

ν An agreement between two or more parties enforceable in court.

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Elements of a contract

ν Competent partiesν Proper subject matterν Offerν Acceptanceν Consideration (detriment)

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Competent parties

ν Ageν Sound mindν Exception for necessariesν Void versus voidable contracts

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Proper subject matter

ν Not illegalν Not (excessively) immoral

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Meeting of the minds

ν Offer must contain material terms– Newspaper ads - invitation to make an

offerν Acceptance must be unqualified

– Qualified acceptance is a counteroffer• Terminates offer

– Grudging acceptance

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Consideration/Detriment

ν Exchange of valueν Need not be money

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Sale of Goods

ν Tangible personal property–Existing– Identified–Examples

• Unborn animals• Growing crops

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Statute of frauds

ν $500 or moreν Sufficiency of writing

– Quantity– Signature of party to be charged

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Statute of frauds - Exceptions

– Completed transaction• Payment made & accepted or goods delivered &

accepted– Specially manufactured goods– Admission in pleadings or otherwise– Merchants

• Definition: one regularly engaged in a particular business• Written confirmation w/n reasonable time• Party to be charged has reason to know contents• Fails to object w/n 10 days

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Remedies for breach

ν Sellers– Resell and sue for difference– No resale; sue for difference from market

price– Volume seller: lost profits

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Remedies for breach

ν Buyers– Non-delivery or nonconforming goods

(perfect tender rule)• Cover• Accept w/ notice, sue for damages