Sales of Goods and Commercial Transactions
Sales of Goods and Commercial Transactions tests UCC Article 2 scope, performance, risk of loss, warranties, and remedies.
Core rules
- Article 2 applies to transactions in goods; contracts for services, real estate, and intangibles fall outside, though mixed contracts use the predominant purpose.
- Risk of loss depends on delivery terms. In a shipment contract (e.g., F.O.B. seller's plant), risk passes when conforming goods are delivered to the carrier. In a destination contract, risk passes at destination.
- Perfect tender: buyer may reject nonconforming goods unless seller cures within the contract time. Acceptance limits rejection; revocation requires a substantial impairment.
- Warranties: express; implied merchantability (merchant seller); fitness for particular purpose. Disclaimers must be conspicuous; as-is language can disclaim implied warranties.
- Remedies: cover, market difference, incidental and consequential damages; limitations cannot be unconscionable.
Worked example
Seller contracts F.O.B. Seller's warehouse to ship 1,000 parts. Seller delivers conforming parts to the carrier; the carrier's truck overturns. Buyer bears the risk because the term is a shipment contract and the seller had no breach.
Traps
Title and risk are distinct. Perfect tender is not the general contract standard of substantial performance. A signed as-is clause does not automatically exclude fraud or personal injury claims. The CISG may displace Article 2 in international sales.