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Ch. 10: Formation of Sales and Lease Contracts
Terms in this set (41)
Uniform Sales Act
a law governing sales of goods that was adopted by most states; later subsumed within Article 2 of the UCC.
Uniform Commercial Code
comprehensive statutory scheme that includes laws that cover aspects of commercial transactions.
Article 2 (Sales)
a section of the UCC that deals with the sales of goods.
property that is a "right" rather than a physical object, even though the right may be evidenced by a physical piece of paper, e.g., patent, stock, trademark, copyright/goodwill.
Article 2A (Leases)
An article of the UCC that governs leases of goods.
a statute proposed to legislatures for adoption, e.g., the Model Probate Code proposed by the National Conference of Commissioners of Uniform Laws.
Revised Article 2
a recent revision of Article 2 to the UCC that deals with the sale of goods.
the passing of title from a seller to a buyer for a price.
tangible things that are movable at the time of their identification to the contract.
a sale that involves the provision of a service and a good in the same transaction.
a person who deals in the goods of the kind involved in the transaction or by his/her occupation holds him/herself out as having knowledge/skill peculiar to the goods involved in the transaction.
Uniform Commercial Code—Leases
Article 2 of the UCC directly addresses personal property leases, including the formation, performance, and default in leases in goods.
Common Law definition of a lease
a contract for the exclusive possession of lands/tenements for a terminate period; a contract by which the lessor grants the lessee the exclusive right to possess and use personal property of the lessor for a specified period of time
UCC Article 2a
a transfer of the right to possession and use of goods for a term in return for consideration; a sale, including a sale on approval/a sale/return/retention/creation of a security interest is not a lease; unless the context clearly indicates otherwise, the term includes a sublease.
a three-party transaction consisting of the lessor, lessee, and the supplier.
one engaged in the business of making products available to consumers; all persons in the chain of production and distribution of a consumer product.
a section of a sales/lease contract on which the parties are allowed to "read into" the meaning of that section.
A rule that says an open term can be "read into" in a sales or lease contract.
Open price term
where a sales contract does not contain a specific price, a "reasonable price" is implied at the time of delivery.
Firm offer rule
under the UCC, a merchant who offers to buy, sell/lease goods and who gives a written and signed assurance that the offer will be held open cannot revoke the offer for the time stated/a reasonable time.
a shipment that is offered to the buyer as a replacement for the original shipment when the original shipment cannot be filled.
Mirror image rule
for an acceptance to exist, the offeree must accept the terms as stated in the offer.
if one/both parties to the contract are non-merchants, any additional terms do not constitute a counteroffer/extinguish the original offer; if the offeree's proposed conditions are accepted by the original offeror, they become part of the contract; if they are not accepted, the sales contract is formed on the basis of the original offer.
Battle of the forms
where the parties to a contract go back and forth with each other, trying to get the other to agree to their standard contract form.
Specially manufactured goods
goods manufactured specifically for the buyer.
Admissions in pleadings/court
when a party admits in pleadings, testimony/otherwise in court that a contract for the sale/lease of goods was made, the oral contract is enforceable against that party.
when a sales/lease contract is oral but should have been in writing, the contract is enforceable, only to the extent to which the goods have been received and accepted by the buyer/lessee.
Parol Evidence rule
a rule that says that if a written contract is a complete and final statement of the parties' agreement, any prior/contemporaneous oral/written statements that alter, contradict/are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract; there are several exceptions to this rule.
Course of performance
the history of previous conduct of the parties regarding the contract in question.
Course of dealing
a sequence of previous acts and conduct between the parties to a particular transaction, which fairly establishes a common basis of understanding for interpreting their communications and other conduct.
Usage of trade
a regularly observed/adhered-to practice/method of dealing in a particular trade/industry.
Federal Trade Commission (FCC)
federal government agency empowered to enforce federal franchising rules; empowered to enforce the FCC Act and other federal consumer protection statutes.
prohibits unfair and deceptive practices.
Letter of credit
a written instrument addressed by one person to another, requesting the latter to give credit to the person in whose favor it is drawn.
the buyer in regard to a letter of credit.
the institution that issues the letter of credit.
a person/organization designated in the will that receives all/a portion of the testator's property at the time of the testator's death; the person who is to receive the life insurance proceeds when the insured dies; person for whose benefit a trust is created.
a securities firm, bank/other financial organization that regularly performs services for another in a place/market to which the other does not have direct access, e.g. a correspondent on an exchange; correspondent bank.
Bill of lading
a document of title that is issued by a carrier when goods are received for transportation.
Article 5 (Letters of Credit)
a section of the UCC that governs letters of credit, unless otherwise agreed to by the parties.
Uniform Customs and Practices for Documentary Credits (UCP)
rules created by the International Chamber of Commerce that govern the formation and performance of letters of credit.
THIS SET IS OFTEN IN FOLDERS WITH...
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