LGS 200, Week 6 notes
LGS 200, Week 6 notes LGS 200
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This 3 page Class Notes was uploaded by Grant Logsdon on Thursday February 25, 2016. The Class Notes belongs to LGS 200 at University of Alabama - Tuscaloosa taught by Charlye S. Adams in Winter 2016. Since its upload, it has received 24 views. For similar materials see Legal Environment of Business in Law and Legal Studies at University of Alabama - Tuscaloosa.
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Date Created: 02/25/16
Ch 11 Sales and Lease Contracts 2/25/16 UCC Article 2 ● Contracts for the sale of goods ● “Sale” passing of title from seller to a buyer for sa price (payable in cash, goods, services) ● “Goods” must be tangible and movable ○ tangiblehas physical existence ○ movable can be carried from place to place ● Goods associated with real estate ○ Contract for sale of minerals or a structure is a good IF severance is made by seller ○ Sale of growing crops ○ Other “things” attached to real property, capable of being severed without harm to land ● Merchant deals in same goods in the sale, ● Definition of a Lease Agreement ○ contract for lease of personal goods between a lessor and a lessee ○ Lessor transfers right to possess and use goods under lease ○ Lessee acquires right to possess and use goods ● Offer ○ At common law once a valid offer is unequivocally accepted, a binding contract is formed ○ UCC allows for open pricing, payment, and delivery terms, even if terms undefined ● Open Terms ○ “Indefiniteness” is OK as long as the parties intended to make a contract and there is a reasonable basis for a court to grant a remedy ○ Open Price Terms If parties have not agreed on pricing, court can determine “reasonable price at the time of delivery” ○ Open Quantity generally courts will not impose a quantity and there is no remedy unless: the contract is either a requirements or output contract ○ Open Payment Term: Unless otherwise agreed, payment is due on delivery ○ Open Delivery Term: Unless otherwise agreed, buyer takes delivery at the seller’s place of business ● Merchants Firm Offer ○ Offer made by merchant in a signed writing is irrevocable for reasonable period of time. No consideration is necessary ○ The Offer must be in writing and signed by the offeror ● Methods of Acceptance ○ Offeror can specify a means of acceptance ○ Under the UCC, the “mailbox rule” means any reasonable means of acceptance under the circumstances is permissible ○ A promise to ship or prompt shipment is acceptance ○ Shipment of nonconforming goods is both an acceptance and a breach, unless goods were sent as “accommodation” to buyer, with prompt notice ● Statute of Frauds sale of goods over $500 must have a signed writing to be enforceable ○ Exceptions Oral contracts for specially manufactured goods will be enforced, Oral contract is enforceable if there are admissions by breaching party; partial performance an oral contract is enforceable IF payment has been made or goods have been accepted ● Unconscianability ○ Contract is one that is so unfair and onesided it is unreasonable to enforce it ○ UCC allows court to strike one clause or the entire contract ● TItle and Risk of lossIdentification takes place when specific goods are designated as the subject matter of the contract. Ch 10 Continued Damages ● Compensatory Damages designed to compensate nonbreaching party for loss of the bargain ○ Standard Measure: difference between value of promised performance and value of actual performance ○ Incidental Damages: expenses caused directly by breach of contract ○ Sale of Goods: difference between contract and market price ○ Sale of Land: specific performance ○ Construction Contracts ● Consequential (Special) Damages. ○ Foreseeable losses ○ Breaching party is aware or should be aware, the breach will cause additional loss to the injured party. ● Punitive Damages—punish or deter future conduct ○ Generally not available for mere breach of contract. Requires commission of a tort in addition. ● Mitigation of Damages ○ When breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he/she suffered. Duty owed depends on the nature of the contract. ● Liquidated Damages vs. Penalties. ○ Liquidated Damages: specific amount agreed to be paid as damages in the event of future breach ○ Penalties: designed to penalize, generally unenforceable. ● Rescission ○ Remedy whereby a contract is canceled and the parties are restored to the original positions that they occupied prior to the transactions. ● Restitution ○ Both parties must return goods, property, or money previously conveyed. Rescission does not always call for restitution. Restitution is called for in some cases not involving rescission ● Specific Performance. ○ Equitable remedy calling for the performance of the act promised in the contract, for contracts involving: Sale of Land. Personal Services Waiver ● •The nonbreaching party accepts defective performance of contract