Advanced Contracts: Commercial Trans

▼ What Body of Laws Applies?

▼ Some rules of contracts cannot be varried by agreement
▼ Duty of good faith, diligence, reasonableness and care as prescribed
by the UCC
• But the parties can agree on standards by which the above are measured.
▼ Some things will apply unless they are disclaimed
• Like warantee of merchantibility for a particular purpose.
▼ Course of trade, course of performance, course of dealling
• Commercial contexts like these are taken seriously by the courts.
▼ Merchants
▼ Certain issues only apply to merchants
▼ Implied warrantee of merchantibility
• Arises if the merchant deals in goods of that type.
▼ Art 1- General Terms
▼ 1-102 If any transaction is governed by any part of the UCC, then the
general rules of Art. 1 apply.
• Specific Rule trumps general rule
▼ Art 2-100 Definitions
▼ 2-102- Transactions in goods.
• Transactions includes "sales"
• If its in substance the transaction is an article 9 transaction, then it
doesn't count under art 2
• The article does not impair or repeal any statute regulating sales to
consumers, farmers or others classes of buyers.
▼ 2-104- Merchant
• A person who deals in goods of the kind, or otherwise by his occupation
holds himself out as having knowledge or skill peculiar to the practices
or goods involved in the transaction.
▼ 2-105 Goods definition
▼ "Goods"- All things movable at the time of identification
▼ Includes:
• Specially manufactured good, unborn young of animals, growing crops
▼ Excludes:
▼ Money, Investment Securities,"Things in action"
• What is a thing in action
▼ Goods must be both existing and identifiable before any interest in them
can pass.
• Otherwise they are future goods, and a contract for future goods is a
contract to sell, not a contract for the goods themselves.
▼ 2-107- Goods to be severed from the land.
▼ contracts for the sale of somthing to be severed from real property
 by the seller is covered under art. 2, but until the object is actually
severed, the contract is just a contract to sell something in the future.
• eg Oil or gas.
▼ contracts for goods that are apart of the land, but readily identifiable
before severance, do fall under art 2, regardless of who is going to sever
the goods.
• EG: crops
• Note: The scope of Art 2 is not decided when identification occurs.
▼ Art 2-200 Form Formation and Readjustment
▼ 2-201 Statute of Frauds.
▼ 1)If more than $500, the K is not enforceable unless evidenced by a
writing sufficient to determine that a K has been made, and signed by the
party against whom enforcement is sought.
• What is that? Its a wispy standard.
▼ (1)- The courts will not attempt to extrapolate a quantity term beyond 1 if
the writting calls for a "desk". Maybe 2 if it calls for "desks"
• If the writting is a check, then there can some etrapolation to what the
payment covers.
▼ 2) Between merchants- if a confirmation is received, it satisfies
section (1) unless objected to within 10 days of receipt.
▼ If it is sufficient under 2-201(1) then its sufficient under 2-201(2).
• Except as against the other party. It's only good against the same party
under both sections.
▼ (2) Merchants must check their mail. Confirmation sent in a reasonable
time are effective if the party receiving it has reason to know its contents,
unless the person receiving objects within 10 days.
• The rejection must be written, not oral
• It must be an objection to the exictence of the K, and not the terms. ???
Look up this
▼ 3(b) Judicial admission exception
• You have no right to attempt to solicit an admission through a deposition
if one has not already admitted it in a previous filling
• Most courts require a sworn statement denying the existance of the K,
or at most a little bit of discovery.
• Partial performance can substitute for a writting, but only for the goods
which have been accepted, or payment made and accepted.
• Letterhead can be construed as a signture.
▼ 2A diff.
• Part payment not available under 2A-201(4)c
▼ 2-202 Parol Evidence
• Contracts that are final expressions of the agreement may not be
contradicted by evidence of prior agreement, or contemporaneous oral
agreement, but may be explained or supplemented, by course of
performance, course of dealing, or usage of trade, or by evidence of
 consistent additional terms unless the court finds the writing to be a
complete and exclusive statement of the terms of the agreement.
▼ We can't think of everything!
• It is close to impossible to predict every possible even that may occur
• And it is hardly ever practical to try and negotiate every possible solution.
▼ Some terms will be excluded by law
• trying to waive the duty of good faith
• trying to disclaim certain waranties.
▼ For all practical respects, Art. 2, and 2A are the same, and there is no
real anolouge to the parol evidence rule in CISG.
• Under 2 and 2A the parol evidence rule is a really loose net. It has no real
teeth to it, especially a motivated party.
• A lot of weight is placed on writtings.
▼ Usage of trade, course of dealing, course of performance.
• Generally allowed in,
• Contextual facts and circumstances matter.
• The rule operates to give the judge control over elements instead of the
jury.
• Complete and exclusive agreements cannot be contradicted by anything
except a modification
• Modifications to contracts do not need consideration to be enforceable
under the UCC (Maybe as only between merchants.??)
▼ No writing req. for the CISG
• Unless a country reserves the application of thier own StoF
▼ 2-204- Formation in General
• Contracts can be made in any manner sufficient to show agreement-
including conduct that recognizes the existence of the K.
• Contracts do not fail for indefiniteness, if the parties intended to make a
K, and there is a reasonably certain basis for giving an appropriate
remedy.
▼ 2-205- Merchants firm offers
• Firms offers in a signed writting, which state that the offer is open for a
period of time, are not revokable for lack of consideration during the time
stated.
• 2-206 - An order for something to be shipped is an offer that is accepted
upon shipment of conforming goods.
▼ 2-207- Conflicting terms - how to handle them.
• 1) Do the writings form a contract?
▼ 2) What are the terms if: there is already a K, or the writtings form a K
under (1)
▼ What are MATERIAL terms? Is there a significant effect? Is there a
significant reduction in remidies available?
• Disclaiming consequential damages is material enough.
▼ 3) If no K prior to the writtings, or from the writtings under (1)- then
 the conduct of the parties can recognize a contract.
• If the conduct does recognize a K then what are its terms.
• If you put additional terms in an acceptance, and expressly make
acceptance of the K conditional on the acceptance of the new terms,
then you won't have a K on the terms of the writings, but you may
have one on conduct.
▼ If you get it so wrong- you ship the wrong thing, you get the
business terms wrong- then there is no definite and seasonable
expression of acceptance.
• The question develops when you are trying to figure out what is a material
term.
▼ How your contract is formed determines where you go to find the
terms
▼ Contract by conduct? Then look to 2-207(3)
• Only the terms where there is agreement are binding. All the others fall
out as inapplicible to the contract.
• Everyone agrees that the statute is hard, and the results may or may not
be rational.
• It is very difficult to write a form that will avoid 2-207 problems in all
cases.
▼ 2-209 Modification, Rescission and Waiver
• Modifications need not be supported by consideration.
▼ Unresolved Art 2 questions
• What is an offer? Look to "general rules of law and equity"
▼ Art 2- 300 Warranties
▼ Warrantee's
▼ Are a risk allocation devise. They are nothing more than an
additional contract
• They determine who bears the risks when the expectations to not bear out.
▼ Express 2-313
▼ Arise when the seller does something affirmative
• They show a sample or model,
▼ If what the seller does becomes the "basis of the bargain" then
there will be an express warrantee.
• And it will be part of the K unless disclaimed.
▼ The trick to express warrantees is to determine whether one has arisien-
• What is an affrimation of fact vs puffing. 
▼ Is the statement really broad or very narrow
▼ This computer is super!
• A broad statement is less likely to be found as an express statement.
▼ This computer get 10 hours of battery life
• Very specific, likely to establish an express warranty
• Expressions of the opinion of experts can suggest a higher degree of
reliability, and thus possibly creates and express a warranty.
 ▼ You need not show that the statement was actually relied on, only that it
was said, in order to form the basis of the bargain.
• As long as it is not disclaimed.
▼ Maybe express
• specific
• fact
• expert
• reliance
• response to a question of fact
• You can tell if it's breached.
▼ Not express
• Opinion
• Novice person
• broad, non-specific.
• Responce to a question asking for an opinion.
▼ Implied
• Warrantee of title- 2-312
• Implied warrantees are like leaches- once present they attach themselves
to the transaction, and the seller must take an affirmative step to remove
them from the transaction.
• Because they are implied, they cannot run to the ultimate purchaser if
made at a level above the ultimate buyer and the their seller.
▼ Implied merchantability.
▼ Courts will strongly look at the contents of the law suit.
▼ EG Products Liability
• They will often say that lack of privity, between manufacturer and
end user, in implied warrantee of merchantability is void as a
matter of public policy
▼ Warranttee of merchantability
▼ A colorful warantee 2-314
• Is the seller a merchant of goods of that kind? Then unless
disclaimed, it becomes a part of the bargain.
▼ Assuming the party is a merchant
• The thing you buy will do the things that you expect the thing do
to.
▼ warrantee of fitness for a partiular purpose. 2-315 -semi complicated
territory.
▼ Were the circumstances present to create the warrantee?
• Someone has a need for a product that is different from the normal
need.
• The buyer communicates to the seller that they have this particular
purpose and the buyer is releying on the sellers expertise to decide
which goods are appropriate for the buyer
• You must also show that the buyer actually relied
 ▼ Does not depend on the seller being a merchant of goods of that
kind.
• There may be a fitness question without there being a
merchantability question.
▼ Your need is different from the average need.
▼ What distinguishes a partiular purpose from an ordinary use
• See comments for instructions.
▼ Disclaimers
• You can't disclaim everything from a transaction
• The buyer expects to get something for their money.
▼ Art 2A Warrantees
• Express warantees are esentially the same as art 2.
▼ Merchantabilty
• Same Except with respect to finance leases.
▼ Under the CISG there is no case where the rights of buyers can be
passed onto third parties.
• Privity is a significant bar under the CISG
▼ Warrantee Table
• Art 2 2A CISG
• Express 2-313 2A-210 Art. 35
• Merch. 2-314 2A-212 35
• Fitness 2-315 2A-213 35
• Privity 2-318 2A-216 No analogue
• Notice 2-607(3)(a) 2A-516(3)(a) Various.
•
• Creation
• Disclaimer/Exclusion
• Breach
• Defenses
• Remedy Limitations
▼ Warrantee Analysis
▼ Creation
• If you think you can draw a bright line where a warranttee and puffing come
together, then you are over confident.
▼ What does it mean to say that something is the basis of the bargain?
• Comments are instructive.
• Disclaimer
• Breach
• Defenses
• Remedy Limitations
▼ Warrantee Defenses
• These are the most erratic of any section of this class.
▼ Lack of Privity
 ▼ Horizonatal Privity
• The person sueing is not the purchaser, but is someone who was
injured by its use. They usually have no contractual relationship with the
manufacturer, or people up the chain of distribution. If they are suing the
purchaser, then there is a question of horizontal privity issue.
• 2-318 only deals with horizontal privity issues
• Econonomic loss will almost always require privity
• Products liability will almost never require privity
• Property damage may or may not require privity.
▼ Vertical Privity
• The Ultimate purchaser is sueing not the person that they bought the
product from directly, but someone further up the chain of distribution
• Pure vertical privity problems are not settled by article 2- you need to
look outside of the code for a solution.
• "Except where the barrier of privity has been legislativly or judiciailly
removed, the absence of a contractual relationship between the seller or
manufactuerer of an alledgedly defective product and a person injured by it
continues to preclude products liability actions for breach of express and
implied warranties.
▼ A,B, C states 2-318
• Do A states limit themselves only to consumer warranttees? Household
▼ Lack of Notice. 2-6073a
• Really straight forward compared to privity-
▼ Once goods are tendered buyer must give notice of defect within a
reasonable time- otherwise it is a COMPLETE BAR TO RECOVERY
▼ What is a reasonable notice?
• Highly factual.
▼ What does the content of the notice have to be?
▼ Does it need to explicitly say "Notice of Breach"?
• Maybe not.
• THe content need mearly be sufficient for the seller to know that the
transaction is still troublesome and needs to be watched.
▼ To what extent must a third parties give notice?
• Essentially the same as the buyer.
▼ To what extent must the buyer give notice to those in privity with the
seller.
▼ Statute says you must give notice to your seller
• But the reason of the section should carry over to others in the
vertical privity chain.
• There are privity like issues involved when you move beyond a
transaction involving a single buyer and a single seller.
▼ Consumer who is injured and is suing the manufacture
• Notice requirements are relaxed
• When you move away from personal injuries and to economic losses
 and property damage, notice is going to be more strict.
▼ Binah's Notes from missed day.
• If the transaction is a finance Lease from Standard’s perspective, it removes any privity
barrier to suing Billings.
This is in exchange for its remedies against First National, which are then restricted.

You want to include stuff in your transaction that says “this is a finance lease” and
addresses the requirement

Hypo:
You want to sell flying bicycles out of your garage. They’re experimental and not very
safe. Customers want to buy it cheap.
Don’t forget about torts and products liability law, consumer protection!

Consumer protection laws that apply in this field:

Magnuson Moss Warranty Disclaimer act - consumer products in which a written
warranty is given. (Federal Law)
-Terms in the MMWD are defined differently from UCC terms, ie consumer good ≠
consumer product
-Doesn’t require that a warranty be given, but if you do provide a warranty, then its
regulated
If you have a disclaimer warranty under MMWD, 2 consequences:
1) Must be described in clear and easy to understand language, explain to consumer
their rights
2) Must call your warranty either a limited warranty or a full warranty
-If limited, then you can define the limits
-if Full, subject to minimum federal standards, that are pretty extensive.
Most warranties these days are limited warranties (except for the Igloo cooler - what
could go wrong?)
If you limit the duration of the warranties, you can only limit the implied warranties to
the same limit as the express warranties (not shorter).

What does lifetime warranty mean?

Who’s life? Your life? Products life? If the product doesn’t work then isn’t it dead?
NO DEFINITE ANSWER - might mean for the usual expected lifetime of the product

-Gives you a federal cause of action, if your amount in controversy is high enough you
can get into federal court.
-Might get your around pesky UCC notice issues

You can make statute of limitations to raise the number of possible defenses you have.
Or you can include remedy limitations.

Creation Exclusion/Disclaimers Defenses Remedy Limitations

Courts get more and more conservative in interpreting contracts
So, if you want to really prevent seller liability, better to do it with the creation of the
 warranties, instead of at the remedy limitations end.

Courts hate letting sellers make warranties and then snatch it away.

§ 2-316
If you had conduct that gave rise to an express warranty, but your language disclaims
the warranty, you try to construe them to not conflict. But, if you can’t get them to
reconcile, then the disclaimer prevails (because of the parol evidence rule, used to
exclude evidence of the express warranty because the writing boots it out).
*Note: Parol evidence rule doesn’t bar evidence of the circumstances that give rise to
IMPLIED warranties.
-Mention merchantability
-In the case of a writing, must be conspicuous

Exercise: Draft the perfect disclaimer under UCC

3a) Language must bring it home that the seller is taking no responsibility for the
quality of the goods (i.e. as is, with all faults). This can get rid of implied
merchantability, even though the merchantability requirement of 2 which requires
Merchantability to be mentioned in order to exclude implied warranties.

§ 2a-214

▼ Art 2A- Leases-Difference between a lease and security interest

is one of the peskiest sections of the UCC.
▼ There is a fine line between some 2 and 2A transactions.
▼ The UCC adopts an economic realities test. It doesn't matter what the
parties intend. The facts of the case determine whether it is a lease or
not.
• What matters is what the "lease" is in fact, objectivly.
▼ The problem is distinguishing a lease from a transaction where something
is sold and the seller retains a security interest in the good.
▼ Sale-
• Ownership transfered w/o an interest retained by the seller.
• Sale w/ Seller retaining security interest
▼ Lease
• A transfer of right to possession and use of a good for a term in exchange
for consideration
• A retention of a security interest is not a lease.
▼ A lessor is the real owner of the goods
• The lessee has no right to sell the goods because they do not hold a
transferable title.
▼ The problem develops when the rights and obligations are
negotiated between the two parties to make the distinction unclear.
• Where is the balance of the center of gravity of the transaction (who has
the most rights retained?)
 ▼ Security Interest?
• A conditional right to repossess the goods in the event of the occurance
of a condition.
▼ Test- A lease creates a security interest if
• The lessee is obligated to pay rent for the duration of the lease
• The lessee may not terminate the lease (not talking about the lessor)
▼ AND
• The term of the lease is equal to or greater than the economic life of the
goods
• the lessee is bound to renew for the remaining economic life, or they are
bound to become the owner
• The lessee has an option to renew for the remaining economic life for
nominal or no consideration upon completion
• The lessee has an option to purchase for nominal or no consideration upon
completion.
• A purchase option taken alone- doesn't create a security interest.
▼ 2A-204, 205, 206, are all pretty much the same the sales equivalents.
• There is no analog to 2-207 because a lease is generally negotiated
personally, and the parties sign the same document.
▼ CISG
• A lawyers dream and a buisness person's nightmare.
▼ A number of significant countries are not parties to the treaty
• Brazil, England, Portugal, Saudi Arabia, India, much of the middle east,
most of africa.
▼ Substantive scope is similar to Art. 2
• Doesn't really define sales or goods.
• Doesn't govern consumer transactions.
• Exculdes the sale of negotiable instruments.
• Exculedes Personal injury and death
• Also excludes questions of ownership.
• Jurisdictional Scope is the tricky part.
▼ It is a compromise piece of law
• In the controversial rules- it tends to punt.
▼ There is a strong flavor of freedom of contract and to the actual
intentions of the parties.
• But there are places where it is weirdly formalistic.
▼ Scope
▼ Sale of goods
• There is no definition of goods in the CISG
▼ Specially manufactured goods count as sales- 3.1
▼ Unless the purchaser supplies the preponderant raw materials to
be manufactured.
• What is preponderant? Not quite sure .
 ▼ Does not apply to contracts
• for goods bought for personal, family, or household use.
• auctions
• ships, vessels, hovercraft, aircraft.
• electricity
• securities.
• The states must be contracting states.
▼ Between parties whose place of business are in different member
states
• Art 10: the place of business is the place that has the closest relationship to
the contract or its performance.
• It you don't know that the place of business is in different state, the art 1 is
disregarded.
▼ Approach
• Arts 14-17 Offers
• Art 18 Acceptance
▼ Art 19 - 2-207
▼ KInd of like the mirror image rule, but with a modification.
• Not as extreme as 201, or 202.
▼ Under the CISG if the differences are "non-material" you still might have a
K.
• But you prevent the formation of the K by objecting to the K's.
▼ Material things are defined by section 3.
• And it enumerates pretty much everything anyone would really care
about.
▼ Its kind of mechanical
▼ Look for the offer, look for the acceptance, there you have a K
• Instead of the loosy goosy buisness of the UCC.
• Remedy Limitations
▼ Finance Leases DEf 2A-1032
▼ If the transaction is a finance lease, all of the warrantees that run to the
lessor, run to the lessee???? WHAT VERIFY THIS
• That is why the lessee gets to examine the purchase agreement with the
seller and the lessor- to see what has been disclaimed, and hence woulf
be not available to them.
• It must be a true lease
• The lessor does not select, manufacture, or supply the goods
▼ If it is a finance lease-
• Then there is conclusivly no warrantee of merchantability
• And there is conclusivly no warrantee of a particular purpose.
• The privity ellement is gone, and you might be able to recover on the
sales contract to the lessor.
▼ Transaction
 ▼ 2-501- Identification
• To the degree that it is important- this is the point that the buyer obtains
an insurable interest in the goods.
▼ 2-503/504 Tender
• Seller has done everything that they are required to do to invoke the
buyers obligation to pay.
▼ The difference between a shipment and a Sellers Place of business is
the moment that tender takes place
• Title and risk of loss passes at the point of tender.
• Also conformity of the goods is determined at place of tender.
• The default place of tender is the sellers place of business.
▼ After delivery
▼ The buyer gets a reasonable opportunity to inspect.
▼ And then they must accept or reject
• Acceptance has huge legal consequences.
• At the time of acceptance, the buyer is on the hook for the price.
▼ As transactional attys
• We can adjust the method and place of tender
• THe time for inspection
• the method of delivery.
▼ Risk of loss
• What happens after the seller has tendered, but before the buyer has
accepted the goods.
▼ Incoterms
• A collection of terms that guide the risk of loss issues as used in
international and national shipping.
• Client Interview questions
▼ Due Dilligence
• Inform our clients, inform ourselves, and inform the transaction
▼ How much is neccessary
▼ Depends on the transaction
• Big transaction may need every single detail tracked down
• More often than not, only certain things may need to be investigated.
▼ Must make a choice
• where are the business issues and where are the legal issues.
• and then you must allocate the issues to certain lawyers.
• And you must decide which parts are for the lawyers and what parts are for
the business people .
▼ You must educate yourself about the client to inform yourself
• And their industry- to help yourself understand the situation, and how much
dilligence is due.
•
▼ Contract Structure
 • Parties and Recitals
• Definitions
• Operational Provisions
• Representations and Warranties
• Covenants
▼ Conditions
• Closing
• Performance.
• Default/ Termination
• Remidies
▼ Boilerplate
• Choise of law and forum
• arbiration provisions
• interpretation stuff.
▼ Prepare for negotiation
• does everyone have what they need.
• Does bushaw have a copy of the draft.
▼ Open questions
• what did the term sheets not answer.
▼ Is it a good idea to send the questions to the other side before hand?
• Troy says yes.
• NEgotiating style
▼ Discussion among Co-counsel - priority of the changes that need to
be changed!
• IMPORTANT
▼ When things go wrong
• Contracts are designed with the idea that something might go wrong/
▼ Risk is allocated among parties
• Just because your client ends up with a bad deal when something goes
wrong does not mean the contract was bad.
• The risk of that circumstance occuring could have been thought out and
planned for.
▼ Agreements to Agree
• Are generally not enforcible
▼ Do you have to order anything?
• When there is an exclusivity ellement, of a best efforts component, then
the UCC implies an obligation to do something--in good faith.
▼ What about the STOF
▼ Quantity terms will not be enforced beyond the terms of the writing
• Maximum quantities give the most room to maneuver.
• Requirements or exclusivity can be good proxies for exact numbers
▼ Failure of Srusuposed Conditions 2-605
• Except so far as a seller may have assumed a greater obligation and
 subject to the preceding section on substituted performance:

(a) Delay in delivery or non-delivery in whole or in part by a seller that

complies with paragraphs (b) and (c) is not a breach of his duty under a
contract for sale if performance as agreed has been made impracticable
by the occurrence of a contingency the non-occurrence of which was a
basic assumption on which the contract was made or by compliance in
good faith with any applicable foreign or domestic governmental
regulation or order whether or not it later proves to be invalid.

(b) Where the causes mentioned in paragraph (a) affect only a part of the
seller's capacity to perform, he must allocate production and deliveries
among his customers but may at his option include regular customers
not then under contract as well as his own requirements for further
manufacture. He may so allocate in any manner which is fair and
reasonable.

(c) The seller must notify the buyer seasonably that there will be delay or
non-delivery and, when allocation is required under paragraph (b), of the
estimated quota thus made available for the buyer.
• Extreamely Rare for releif to be granted under this
• Probably would be reserved for cases where performance would be
disastrous financially for one party, rather than performance not allowing
them to get a windfall.
▼ Remedies
• They type of remedy is highly dependent on the type of breach.
▼ Perfect Tender Rule
• As long as the definition of what constitutes perfect tender is loosly defined,
then the degree of "perfection" can vary.
▼ Identification- must occur before a remidy can attach
• Identification occurs when the goods a re shipped, marked, or otherwise
designated.
▼ Tender 2-503, 2-504
• typically- title and risk of loss pass at time of tender.
▼ Shippment contract-
• tender occurs at shipment
▼ Destination
• tender occurs on receipt
• It doesn't matter who is paying for the shippment.
• 2 other types
• Risk of Loss 2-509, 2-510,
▼ Rejections
• Must occur within a reasonable time after delivery
▼ You must do something affirmative.
• "Seasonably notify the seller of your rejection"
 • You have a reasonable opportunity to reject them
▼ Acceptance can be manifest in asserting ownership over the product.
• Rejection must happen before acceptance.
▼ 2-607 Before acceptance- the burden of proof is on the seller to
show that the goods were conforming
• After acceptance, the burden on the buyer to show that they were
not.
• After acceptance, the burden on the buyer to show that they were
not.
• 2-510
▼ Remedies 2
▼ Outline
• General principles- 1-305
▼ Buyer Does not " have" the good
▼ Buyer
▼ 2-712, Cover-K+Inc+Consequential-Expenses Saved
• A real world answer
▼ 2-713 Market -K+Inc+Consequential-Expenses Saved
• a hypothetical economic price
▼ 2-716 Specific Performance
• Courts are hesitant to grant this for anything other than truly
unique goods, also in requirements or output contracts.
▼ Seller
• 2-706 K-Resale+Inc- Expenses Saved.
• 2-708(1) K-Market+INC-Expenses Saved
▼ 2-708(2) Profit
• Tricky- The "volume seller" problem
• What was the lost profit? Hards
▼ The Buyer "has" the goods
▼ Buyer
• 2-714 Loss+INC+Consequential
▼ Seller-
• THis is generally the only time that the seller can sue for the contract
price.
• 2-709 Price
▼ Incidentals
▼ Buyer
• 2-715
▼ Seller
• 2-710
▼ Consequentals
▼ Buyer
• 2-715
 ▼ Seller
• ???
▼ Right to Adjust Own Performance
▼ Buyer
• 2-717
▼ Seller
• 2-702, 704
• If the buyer has accepted the goods, then the buyer has to pay for the
goods.
▼ Compensation is the purpose of UCC remidies
• An expectation measure of damages
• 2-312
▼ Sellers Remidies
• Most of the remidies of art 2 deal with the goods themselves.
• If you end up with a breach that is not directly related to the goods. then
you may have problem figuring out the remidies.
▼ Contractual modifiactions to remidies
• presumptions are built into the contract.
▼ Notice and cure previsions
• what constitutes notice and cure, and how they are to be defined
• Arbitration agreements.
• Liquidated damages
• Waiver of a Jury trial
▼ If you want to specifiy something different that what article 2
provides you can do what you want as long as certain things are
observed.
▼ Liquidating
• You can only liquidate within limits- 718-1
▼ 719- authorizes and limits the parties ability to modify damages.
• Examples of remidies that you can add to the agreements, or limit
remidies to those liswted
▼ 1(b)Resort to a remidy is optional, unless it is specified that the remidy is
agreed to be exclusive
• "The buyers sole remidy is ...."
▼ Failure of essential purpose.
▼ vs. Unconscionability- is a matter of perspective\
• Failure of essential purpose- happens because of the way that the
circumstances have played out in the contract
• Uncsionability is going to be uncoinsiotnable regardless of the
cirucumstnaces after contractsin
▼ STOL
• Default is 4 years from when the "action accrues"
• You can contract for less, but not less than 1 year.
• You cannot contract for more than 4 years.