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IN SW Juris study materials
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IN SW Juris: Contracts and Sales (UCC Article 2)

IN SW Juris · Work through your exam, one topic at a time.

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Contracts and Sales (UCC Article 2)

Contracts and Sales tests common-law formation and UCC Article 2. Identify the governing law first: goods are UCC; services are common law.

Core rules

  • Offer and acceptance: common law requires a mirror image; UCC § 2-206 allows acceptance by any reasonable manner. UCC § 2-207 handles the battle of the forms.
  • Consideration: bargained-for exchange; promissory estoppel requires reliance. UCC § 2-205 makes a merchant's signed firm offer irrevocable for up to three months without consideration.
  • Statute of Frauds: common law covers one year, land, surety, marriage, and executor promises; UCC § 2-201 covers goods of $500 or more, with exceptions for merchant confirmation, specially manufactured goods, admission, and payment and acceptance.
  • Parol evidence bars prior or contemporaneous terms that contradict a fully integrated writing; UCC trade usage and course of dealing may explain terms.
  • UCC gap fillers: reasonable price, seller's place of business, reasonable time, and shipment or destination risk of loss.
  • Performance: perfect tender under § 2-601; cure under § 2-508; installment contracts under § 2-612; anticipatory repudiation under § 2-610.
  • Remedies: expectation damages; consequential damages under Hadley; UCC cover and market damages; liquidated damages must be reasonable.

Worked example

Merchant Seller signs a writing promising to keep open an offer to sell 1,000 widgets for 60 days. Under UCC § 2-205, the offer is irrevocable without consideration because the offeror is a merchant, the assurance is signed, and 60 days is within three months. If the period were six months, it would be irrevocable only for three months. Buyer's acceptance by a reasonable manner under § 2-206 creates a contract; additional terms are analyzed under § 2-207.

Traps

An option needs consideration unless it is a UCC firm offer. UCC § 2-207 can produce different terms, not always a knockout. Risk of loss depends on shipment versus destination terms. Common-law substantial performance does not apply to UCC perfect tender.