Contracts and Sales
Scope
Contracts questions blend common-law doctrine with UCC Article 2. Decide which body governs before analyzing: Article 2 covers transactions in goods; services, real estate, and intangibles stay at common law, and Michigan's statute of frauds, MCL 566.132, supplies the writing requirement for the non-UCC categories.
Formation
- Common law: offer, mirror-image acceptance, consideration, and no indefiniteness on essential terms.
- UCC: a writing evidencing a sale of goods is enforceable despite omitted terms if there is a reasonably certain basis for a remedy; open price and delivery terms get gap-fillers, but quantity must be stated.
- Merchant's firm offer: a signed writing by a merchant keeping an offer open is irrevocable without consideration for the stated period, capped at three months.
- Battle of the forms: under 2-207 a definite expression of acceptance operates as acceptance even with different or additional terms; between merchants, additional terms enter the contract unless they materially alter it, the offer limits acceptance, or objection is made.
Performance and breach
Perfect tender governs; the seller may cure within the contract time, and after rejection the buyer may cover and recover the difference. Anticipatory repudiation excuses the other party's performance and triggers mitigation.
Worked example
A Michigan cabinet maker signs a writing: "I offer to sell 5,000 board feet of walnut at $6 per foot; this offer stays open for six months." The buyer pays nothing to hold it open. Because the offeror is a merchant and the promise is in a signed writing, the offer is irrevocable - but only for three months, since the UCC caps firm offers at that period.
Traps
Applying the mirror-image rule to goods; omitting the quantity term; awarding expectation damages without subtracting avoided costs; and enforcing a liquidated damages clause that is really a penalty.