The Formation of Sales Contracts

Chapter 10

Article 2-Sales of Goods

• Sale: "the passing of title from the seller to the buyer for a price" [UCC 2-106(1)]. The price may be payable in money, goods, services, or land.

• Goods: tangible personal propertyIf a transaction involves both goods and services, a court determines which aspect is dominant.

Merchant

• Merchant:• (1) deals in goods of the kind involved; • (2) by occupation, holds themselves out as

having knowledge and skill peculiar to the practices or goods involved in the transaction;

• (3) employ a merchant as a broker, agent, or other intermediary. UCC 2-104:

UCC Changes from Common Law

1, Open Terms ( Price, Payment, Delivery) UCC 2-204

2. Merchant's Firm Offer UCC 2-2053. Acceptance

a. promise to ship or prompt shipment 2-206(1)(b) accommodation b. Additional Terms 2-207

4. Modification needs no consideration, must be in good faith

International Sale Goods

• Contracts for the international sale of goods are governed by the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG).

Applies when the parties to an international sales contract do not specify in writing the precise terms of their contract.

Does not apply to consumer sales.

Comparison of CISG and UCC Provisions

• Mirror Image Rule applies in CISG(Art 19)

• An offer is irrevocable if the offeror states that it is; offeree reasonably relies on it as irrevocable; writing and consideration not needed. Art. 16(2).

• CISG – No Statute of Frauds. (Art.11)

• CISG - Must state price

Special Provisions in International Contracts

• Choice of Language • Choice of Forum ( Place of litigation)• Choice of Law (Sellers place of business if

not specified.)• Force Majeure ("Impossible or Irresistible Force")

Stipulates that acts of God and other eventualities (government orders regulations, embargoes, shortages of materials) may excuse a party from liability for nonperformance.