Dated: August 23, 2016 Outline Overview f Sales Fall 2016 University f Nrth Dakta Schl f Law Prf. Eric E. Jhnsn I. FORMATION, APPLICABLE LAW, AND OTHER BASICS Tpic 1: The Rle and Scpe f Cdes in Sales Systems Key cde sectins: 1-201(b)(3) definitin f agreement 1-302 variatin f UCC rules by agreement 1-303(a)(b)(c) & (d) curse f perfrmance, curse f dealing, and usage f trade 2-102 general scpe f Article 2 2-105(1) definitin f gds 2-104 definitin f merchant 2-308(a) gap-filler fr place f delivery Key learning bjectives: be able t cmpare and cntrast the cde system vs. the cmmn-law understand the imprtance f lking t the statute fr answers fr a sales cntract, understand the hierarchy f imprtance amng cntractual prvisins, the UCC cde prvisins, and the cmmn law in general, as far as the rules that cntrl the deal and any dispute abut it, frm highest t lwest what cntrls is: cntractual prvisins the UCC but nte that sme UCC rules cannt be cntracted arund the cmmn law but nte that sme cmmn-law rules, like fraud, can t be cntracted arund fr a sales cntract, understand the hierarchy f imprtance amng express terms, curse f perfrmance, curse f dealing, and usage f trade 1 f 21
as far as the cntent f the cntract, frm highest t lwest what cntrls is: express terms curse f perfrmance curse f dealing usage f trade understand when gap-fillers are used and when they are superseded gap-fillers are superseded when terms are supplied by express term f the cntract curse f perfrmance curse f dealing usage f trade understand the scpe f a gd under the UCC be able t apply the gravamen test and predminant purpse test t mixed cntracts (H 12-14) predminant-purpse test lks at the deal gravamen test lks at the dispute be able t apply the UCC definitins rather than the cmmn-sense definitins f terms in interpreting UCC prvisins Tpic 2: Scpe Issues with Leases, CISG, and Real Estate Key cde sectins: 2A-103(1)(j) definitin f lease 1-203 lease vs. security interest 2-107 gds vs. real prperty CISG Articles 1, 2, 3, 10 when CISG applies Key learning bjectives: understand smething f the business interests and real-wrld stakes in leases and sales with security interests appreciate, at a very general level, the business cncerns relevant t categrizing transactins as leases r sales with a disguised security interest appreciate hw the need fr financing drives transactinal frms appreciate why parties might want a security interest appreciate the relative benefit, frm the seller s perspective f wanting t get paid r t get back the gds, f categrizing a transactin as a lease, a secured transactin, r an unsecured sale appreciate the relative benefit, frm the perspective f a third party seeking t claim the gds, f categrizing a transactin as an unsecured sale, a secured transactin, r a lease be able t analyze whether a transactin is a true lease 2 f 21
be able t analyze whether a sales transactin is gverned by CISG apply CISG prvisins regarding scpe understand the applicatin f chice-f-law prvisins f cntracts and the applicability f CISG understand what is necessary t prevent applicatin f CISG in a cntract and have UCC gvern instead must nt nly chse a certain UCC jurisdictin (e.g., New Yrk) but als expressly state CISG des nt apply (since New Yrk is part f USA, a CISG signatry) be able t analyze whether a transactin invlving sales f things n r taken frm land are gverned by UCC Article 2 r the cmmn law Tpic 3: The Prcess f Sales Cntract Frmatin Key cde sectins: 2-204 2-205 2-206 2-207 cntract frmatin, indefiniteness firm ffers ffer and acceptance in cntract frmatin additinal terms in acceptance r cnfirmatin a/k/a battle f the frms Key learning bjectives: understand the key aspects f cntract frmatin under 2-204 cntracts can be frmed by express cmmunicatins r purely by cnduct it s nt necessary t be able t determine the exact mment a cntract is frmed pen (un-agreed-upn) terms d nt prevent the frmatin f a valid, enfrceable cntract, s lng as there is sme basis upn which a curt culd prvide a remedy understand hw firm ffers can be binding under 2-205 firm ffers can be binding if they have cnsideratin (same as the cmmn law) firm ffers withut cnsideratin are binding if: by a merchant in a signed writing assurance given it will be held pen (nt revked) but the irrevcability perid fr a withut-cnsideratin firm ffer cannt exceed three mnths understand hw ffers can be made and validly accepted under 2-206 an ffer can invite acceptance in any reasnable manner an ffer can be accepted by shipping gds shipping cnfrming gds cunts as acceptance even shipping nn-cnfrming gds can cunt as an acceptance 3 f 21
but understand that a shipment f nn-cnfrming gds will be cnstrued as a cunter-ffer if it s ffered as an accmmdatin, which the seller can d by seasnably ntifying the buyer that the shipment is intended as an accmmdatin understand what happens where the ffer and acceptance are nt the same understand the cmmn-law backgrund under the cmmn law, the ffer and acceptance must be the same fr a cntract t be frmed by them (the mirrr-image rule ) under the cmmn law, a purprted acceptance that desn t match the ffer will be cnstrued as a cunter-ffer if cnduct by the recipient subsequently establishes that there is a cntract, then the party receiving the purprted acceptance (the cunter-ffer) will be cnstrued t have accepted that cunter-ffer by cnduct, and the terms f the cunter-ffer will cntrl (a situatin giving rise t what s called the last-sht rule) understand in general abut 2-207 (the battle f the frms ): 2-207 was intended t change the cmmn-law rules where the ffer and acceptance are nt the same 2-207 permits cntract frmatin even where ffer and acceptance are nt the same, abrgating the mirrr-image rule 2-207 is intended t avid the harsh results f the last-sht rule understand when 2-207 is nt an issue, including when the ffer and acceptance match when there is an acceptance by cnduct prir t any differing writing where the purprted acceptance cmes t late t cunt as a valid acceptance understand that incnsistent expressins in ffer and acceptance can create a cntract (2-207(1)) but recgnize acceptances expressly made cnditinal n assent t additinal r different terms will nt perate as an acceptance (2-207(1)) understand that in such a situatin, if the parties cnduct indicates a cntract was nnetheless frmed, 2-207(3) applies be able t distinguish between different terms and additinal terms and understand the cnsequences that fllw frm that distinctin fr additinal terms, where there is a valid cntract, be able t apply 2-207(2) fr different terms, where there is a valid cntract, be able t apply the majrity knck-ut rule where the cnflicting terms drp ut f the cntract and gap-fillers are used t fill-ut the cntract understand that when there are writings that dn t establish a cntract, but cnduct that des, 2-207(3) prvides that the terms f the cntract are thse terms that the parties writings agree n, tgether with gap-fillers 4 f 21
Tpic 4: Frmatin with Leases, Internatinal Sales, and Real Estate Key cde sectins: 2A-204 lease cntract frmatin, indefiniteness mirrrs 2-204 2A-205 firm ffers mirrrs 2-205 2A-206 ffer and acceptance in lease cntract frmatin very similar t 2-206, missing the part abut inviting shipment and acceptance by shipping cnfrming r nn-cnfrming gds CISG Article 16, 17 firm ffers CISG Articles 18, 19 ffer and acceptance Key learning bjectives: understand the key aspects f cntract frmatin under 2A-204 (the fllwing mirrrs 2-204:) cntracts can be frmed by express cmmunicatins r purely by cnduct it s nt necessary t be able t determine the exact mment a cntract is frmed pen (un-agreed-upn) terms d nt prevent the frmatin f a valid, enfrceable cntract, s lng as there is sme basis upn which a curt culd prvide a remedy understand hw firm ffers can be binding under 2A-205 (the fllwing is virtually the same as fr 2-205:) firm ffers can be binding if they have cnsideratin (same as the cmmn law) firm ffers withut cnsideratin are binding if: by a merchant in a signed writing assurance given it will be held pen (nt revked) but the irrevcability perid fr a withut-cnsideratin firm ffer cannt exceed three mnths understand hw ffers can be made and validly accepted under 2A-206 (clse t 2-206:) an ffer can invite acceptance in any reasnable manner understand the CISG prvides fr the enfrceability f irrevcable ffers withut cnsideratin and withut being capped by law as t duratin understand the general cnturs f the CISG with regard t ffer and acceptance, in particular that it is similar t the UCC in rejecting the mirrr-image rule, but that it des nt clearly reject the last-sht rule with regard t real estate, have a general understanding f hw residential real estate deals cme tgether in terms f ffer, acceptance, and cntingencies 5 f 21
Tpic 5: Statute f Frauds with Sales f Gds Key cde sectins: 2-201 statute f frauds, requirement f writing 1-201(b)(37) definitin f signed 1-201(b)(43) definitin f writing 1-103 general cnstructin f UCC fr purpses and plicies, applicability f ther law Key learning bjectives: understand when a cntract fr the sale f gds must be evidenced by a signed writing when the price is $500 r mre understand the threshld f what is necessary fr a signed writing the signed writing need nt be the cntract itself mstly yu just need: the quantity f gds t be specified nte that the cntract cannt be enfrced fr beynd the quantity specified that the writing is signed by the party against whm enfrcement is sught understand that the requirements fr a signature are quite liberal (1-201(37)) culd be a typed name, a printed name, an X, the fact that smething was sent n letterhead just as lng there is evidence f intent t authenticate the dcument be able t apply the between-merchant exceptin t the requirement f a signed writing under 2-201(2) even where the party against whm enfrcement is sught never created a signed writing, the statute f frauds can be satisfied with a written cnfirmatin under specified circumstances: bth parties are merchants the writing is sufficient against the sender (that is, the sender has bund herself r himself under 2-201(1)), the recipient has reasn t knw f the cntents f the cnfirmatin, and the recipient fails t bject within 10 days after receipt recgnize the varius exceptins t the statute f frauds listed in 2-201(3), f which any ne will d t make a cntract enfrceable: specially manufactured gds where there s a reliance interest (see 2-201(3)(a)) admissin in curt testimny r pleading (2-201(3)(b)) 6 f 21
in sme jurisdictins, yu might be able t advance a lawsuit just t see if yu can get this admissin in discvery payment was made and accepted (2-201(3)(c)) gds were received and accepted (2-201(3)(c)) prmissry estppel and utright fraud, in many curts (via general principles f law and equity incrprated thrugh 1-103) Tpic 5A: Basic Cntract Interpretatin Key cde sectins: Nne Key learning bjectives: understand the basics f cntract interpretatin Tpic 6: Parl Evidence with Sales f Gds and Mdificatins Key cde sectins: 2-202 parl evidence rule 2-209(1) mdificatin Key learning bjectives: understand when the parl evidence rule is relevant and hw t apply it understand the difference between cntract-interpretatin questins and issues invlving the parl evidence rule understand that a mdificatin t a cntract fr the sale f gds can be binding withut independent cnsideratin (2-209(1)) Tpic 7: Requisites t Frmalizatin in Leases, Internatinal Sales, and Real Estate Sales Key cde sectins: 2A-201 statute f frauds fr leases has substantial differences vs. 2-201 2A-202 parl evidence rule fr leases mirrrs 2-202 CISG Article 1(1) applicability f CISG CISG Article 6 parties can chse t exclude CISG r vary its prvisins 7 f 21
CISG Article 8(3) relevance f negtiatins and pst-agreement cnduct t interpreting a cntract CISG Article 11 n requirement f writing r frmalities Key learning bjectives: understand that the parl evidence rule (2A-202) is the same fr leases as it is fr sales f gds understand the key differences in the statute f frauds fr leases (2A-201) as cmpared t the statute f frauds fr sales f gds the dllar amunt threshld fr requiring a signed writing is $1,000 in ttal lease payments the signed writing, if required, must include a descriptin f the gds leased and the lease term understand that a lease fr which a signed writing is required is nt enfrceable beynd the term stated in the signed writing knw that the signature requirement is the same as fr sales f gds (and that requirement is quite lse) knw that there is n between-merchants exceptin fr leases that is analgus t 2-201(2) there are exceptins t the signed-writing requirement in 2A-201(4) that are largely the same as 2-201(3): the exceptins are: specially manufactured gds where there s a reliance interest (see 2A-201(4)(a)) admissin in curt testimny r pleading (2A-201(4)(b)) leased gds were received and accepted (2A-201(4)(c)) but nte there is n equivalent exceptin fr payment was made and accepted (cf. 2-201(3)(c)) the lease term fr a lease excepted frm the signed-writing requirement under 2A-201(4) is determined by 2A-201(5) prmissry estppel and utright fraud, in many curts (via general principles f law and equity incrprated thrugh 1-103) will allw enfrcement f a lease despite the lack f a signed writing understand that there is n parl evidence rule under the CISG understand that there is n statute f frauds under the CISG understand what parties must d t exclude parl evidence that wuld add t r vary the terms f a written cntract gverned by the CISG. They must: select a jurisdictin with a bdy f law that has the parl evidence rule (e.g., a UCC jurisdictin) de-select CISG (since UCC states are part f the United States, which is a CISG signatry) include a merger clause fr real estate, understand that the cmmn-law statute f frauds requires a signed writing fr the sale f real prperty understand that the cmmn-law statute f frauds fr real estate is stricter than the UCC statute f frauds 8 f 21
fr real estate, the signed writing must generally include all material terms exceptins are equitable estppel (detrimental reliance) part perfrmance understand the ptential difficulty, exemplified by Richard, f prving that cnduct is part perfrmance f a real-estate sales cntract rather than just cnsistent with a lease f the real prperty Tpic 7A: Licensing Key cde sectins: Nne Key learning bjectives: understand the basics f licenses a license is a legally binding cnsent a license has legal effect as an affirmative defense a license is nt a cntract, but might be part f a cntract understand the relatinship f licenses t cntracts and cnsequences fr available claims and remedies a license is nt a cntract, but a license can be a term f a cntract; that is, a license can be a thing bargained fr be able t recgnize when a cntract cntaining a license will nt preclude nn-cntractual causes f actin based n extracntractually existing rights (such as causes f actin fr trespass r cpyright infringement) when the license is made cnditinal upn sme cnditin nt met be able t recgnize when a cntract cntaining a license will preclude nn-cntractual causes f actin based n extracntractually existing rights (such as causes f actin fr trespass r cpyright infringement) when the license is given as part f the bargain (i.e., nt made cnditinal) II. TERMS Tpic 8: Warranties with Sales f Gds Key cde sectins: 2-313 2-314 2-315 express warranties implied warranty f merchantability; ther implied warranties frm usage f trade 9 f 21
implied warranty f fitness fr a particular purpse Additinal relevant cde sectins: 1-201(b)(20) definitin f gd faith 1-303 curse f perfrmance, curse f dealing, usage f trade 1-304 general bligatin f gd faith 2-104(1) definitin f merchant Key learning bjectives: express warranties be able t apply 2-313 understand hw express warranties are frmed be able t distinguish puffery frm an express warranty implied warranty f merchantability be able t apply 2-314 understand what is warranted, 2-314(2) understand in what cntexts the warranty exists, 2-314(1) implied warranties frm usage f trade understand that ther implied warranties may arise frm usage f trade, 2-314(3) implied warranty f fitness fr a particular purpse understand when the warranty exists when seller has reasn t knw f a particular purpse fr the gds, and the buyer is relying n seller s skill r judgment t select r furnish gds understand what is warranted fitness fr that purpse Tpic 9: Ntice and Privity Key cde sectins: 2-607(3)(a) requirement f ntificatin within a reasnable time 2-607(5)(a) with ntice, upstream seller bund t factual determinatins in the litigatin that upstream seller chse nt t defend 2-318 third-party beneficiaries f express r implied warranties Key learning bjectives: understand the imprtance f ntice in breach f warranty disputes 10 f 21
understand hw persns withut privity t the sales cntract can sue fr breach f warranty Tpic 10: Magnusn-Mss Key cde sectins: 15 U.S.C. 2301 definitins f key terms particularly nte cnsumer, 2301(3) 15 U.S.C. 2302 requirements f written warranties ther rules gverning cntents f warranties 15 U.S.C. 2303 designatin f written warranties as full r limited 15 U.S.C. 2304 minimum standards 15 U.S.C. 2308 ineffectiveness and prhibitin f disclaimers f implied warranties allwance f limitatin f duratin f implied warranties 15 U.S.C. 2310 remedies in particular 2310(a) infrmal dispute reslutin 2310(b) prhibited acts 2310(c) FTC and DOJ actins, federal jurisdictin 2310(d) recvery f csts and attrneys fees Key learning bjectives: recgnize when Magnusn-Mss applies t cnsumer prducts recgnize that Magnusn-Mss des nt require sellers t issue warranties understand the mst imprtant places where Magnusn-Mss gets its pwer making written cnsumer warranties meaningful, by requiring that full warranties meet minimum standards that implied warranties nt be disclaimed where a written warranty is issued making enfrcement pssible thrugh attrneys fees understand hw the definitin f cnsumer vercmes a lack f privity, allwing suits by parties wh are nt a party t the sale be able t apply the statute t determine whether a seller has vilated Magnusn-Mss be able t explain what an aggrieved cnsumer can d under Magnusn-Mss t enfrce a warranty in a given situatin 11 f 21
Tpic 11: Lease, Internatinal, and Real Estate Warranties Key cde sectins: 2A-209 CISG Article 35 Key learning bjectives: understand certain enumerated, key aspects f lease warranties understand certain enumerated, key aspects f internatinal sales warranties understand certain enumerated, key aspects f real estate warranties Tpic 12: Reducing r Eliminating Warranty Liability: Basics Key cde sectins: 1-201(b)(10) definitin f cnspicuus 2-302 uncnscinability 2-316 exclusin r mdificatin f warranties 2-719 mdificatin r limitatin f remedy Key learning bjectives: understand the incentives in seller-buyer relatinships and hw that affects warranties and infrmal making things right lng-term relatinships, imprtance f repeat business versus large transactins where ptential fr repeat business in vlume is lw appreciate that in enfrcing warranty limitatins with cnsumers, curts ften tend t be very tugh n the seller appreciate the tensin in the UCC between pr-freedm-f-cntract and antippressin be able t apply 2-316 t determine the enfrceability f limitatins n warranties 2-316(2) requirements f, fr a written disclaimer: mentining merchantability t exclude warranty f merchantability being cnspicuus t exclude IWM and IWFfaPP 2-316(3) allwance f as is r with all faults language that in cmmn understanding makes it plain there are n implied warranties unless circumstances indicate therwise be able t apply 2-719 t determine the enfrceability f limitatins n warranties allwability f limitatin f remedy t return fr price, r fr repair and replacement allwability f exclusin f cnsequential damages, unless uncnscinable 12 f 21
exclusin f cnsequential damages fr persnal injury frm cnsumer gd being prima facie uncnscinable Tpic 13: Reducing r Eliminating Warranty Liability: Advanced Key cde sectins (already listed under preceding tpic): 15 U.S.C. 2304 minimum standards 15 U.S.C. 2308 ineffectiveness and prhibitin f disclaimers f implied warranties allwance f limitatin f duratin f implied warranties 2-719 mdificatin r limitatin f remedy Key learning bjectives: understand that express written warranties, nce made, cannt be disclaimed 15 U.S.C. 2-316(1) understand that, theretically, express ral warranties that are made cannt then be disclaimed but understand that the parl evidence rule can effectively allw a written cntract with a warranty disclaimer t disclaim ral warranties while this may prevent a breach f warranty actin, it will nt bar a fraud actin understand that a disclaimer that is valid under the UCC may nt be valid under Magnusn-Mss understand that fr exclusive remedy prvisins t be valid: it is nt enugh t specify a certain remedy it must be made clear that the specified remedy is the sle remedy, r that ther remedies are excluded the remedy specified must nt fail f its essential purpse, 2-719(2) understand the limits Magnusn-Mss sets n limitatins f remedies fr full warranties, an exclusin f cnsequential damages must be cnspicuus and n the face f the warranty fr limited warranties, an exclusin f cnsequential damages must be cnspicuus but need nt be n the face f the warranty if seller cannt remedy a warranty prblem after a reasnable number f attempts, the seller must give the buyer a replacement prduct r a full refund Tpic 14: Cmmercial Impracticability Key cde sectins: 2-615 excuse by failure f presuppsed cnditins i.e., cmmercial impracticability (mre general prvisin) 2-613 13 f 21
casualty t identified gds i.e., cmmercial impracticability (mre specific prvisin) Key learning bjectives: understand that the general rule is that parties made wrse ff by a bargain even much wrse ff are generally stuck with their bad deal cmmercial impracticability is meant t be rare be able t apply the general cmmercial impracticability prvisin f 2-615 as a general matter there must be an unfreseen cntingency understand that 2-615 is the default analg t frce majeure clauses nte that increased cst withut mre is nt a basis fr excuse nte that failure f supply can be a basis fr excuse, but failure f a particular supplier surce usually is nt nte that a change in regulatins is recgnized as a situatin where cmmercial impracticability may apply be able t apply the specific cmmercial impracticability prvisin f 2-613 applies when particular gds identified t the cntract are damaged befre risk f lss passes t buyer if ttal, seller avids the cntract if partial, buyer has the ptin t taking the gds at a discunt t accunt fr the damage understand that this des nt award a windfall t the seller, wh still absrbs the lss but the seller avids sme harsher pssible remedies, such as cnsequential damages Tpic 15: Uncnscinability Key cde sectins: 2-302 uncnscinability Key learning bjectives: understand that uncnscinability is meant t be rare nnetheless, it frms an imprtant uter bund t ppressive behavir particularly by merchants tward cnsumers parties t a cntract wh have made a bad bargain are, as a general matter, bund regardless understand that the apprpriate pint in time fr deciding whether a cntract is uncnscinable is the time when the bargain is made nt sme time later when circumstances change that end up making the deal a bad ne understand that a determinatin f uncnscinability is highly cntext dependent in this vein, nte that 2-302(2) specifically requires a curt t give parties a reasnable pprtunity t present evidence as t its cmmercial setting, purpse and effect t aid the curt in making the determinatin. 14 f 21
understand that a finding f uncnscinability sufficient t avid a cntract generally requires bth prcedural uncnscinability unfairness r ppressin in the making f the deal an absence f meaningful chice substantive uncnscinability ppressive, harsh terms in the substance f the deal unreasnably favrable terms (i.e., t the party wanting t enfrce the deal) understand the three remedial paths (three ptins) a curt can take subsequent t a finding f uncnscinability: refusal t enfrce the cntract excise the uncnscinable prvisin and enfrce the rest f the cntract limit the applicatin f the uncnscinable prvisin s as t avid an uncnscinable result Tpic 16: Title with Sales f Gds Key cde sectins: 2-312 warranty f title cncerns seller liability with regard t title 2-403 pwer t transfer, entrusting, gd-faith purchasing cncerns buyer liability with regard t title 1-201(b)(20) definitin f gd faith 1-204 what cnstitutes value Key learning bjectives: understand the basics f warranty f title, what is warranted and when the warranty arises, 2-312(1) be able t determine whether warranty f title has been validly disclaimed, 2-312(2) understand the indemnificatin liability prvisins f 2-312(3) f sellers fr claims against buyer frm third parties f buyer fr claims against seller where the seller was acting accrding t buyer specificatins be able t determine when a buyer will gain title t a gd despite the wner f that gd nt selling it under 2-403 be able t apply 2-403, 1-201(b)(20), and 1-204 15 f 21
Tpic 17: Title with Leases, Internatinal Sales, and Real Estate Key cde sectins: CISG Article 4 CISG Article 41 Key learning bjectives: understand certain enumerated, key aspects f title with leases understand certain enumerated, key aspects f title with internatinal sales understand certain enumerated, key aspects f real-estate title Tpic 18: Clsing the Sale with Sales f Gds Key cde sectins: 2-508 cure by seller after buyer s rejectin 2-606 what cnstitutes acceptance f gds 2-607 effect f acceptance preclusin f rejectin preclusin f revcatin if acceptance is with knwledge f nncnfrmity unless n reasnable assumptin f seasnable curing requirement f making ntice f breach within reasnable time after it was r shuld have been discvered withut which any remedy is barred 2-608 revcatin f acceptance available if buyer reasnably assumed nn-cnfrmity wuld be cured nn-cnfrmity was undiscvered and acceptance was reasnably induced by difficulty f discvery r seller s assurances requires under 2-608(2) ccurrence within a reasnable time after buyer shuld have discvered ntice t seller 2-612 breach f installment cntract Key learning bjectives: understand under what circumstances a buyer can reject (refuse t accept gds) any time they dn t cnfrm (a/k/a nt perfect) this is knwn as the perfect-tender rule 16 f 21
understand under what circumstances a buyer can revke (after acceptance) nn-cnfrmity must substantially impair the value f the cntract there must be sme gd reasn fr the buyer waiting the buyer reasnably believed acceptance wuld be cured, r the buyer was strung alng by the seller s assurances, r the prblem was t difficult t discver befre acceptance revcatin must be timely understand that the perfect-tender rule des nt apply t installment cntracts Tpic 19: Clsing the Sale with Leases, Internatinal Sales, and Real Estate Key cde sectins: Nne Key learning bjectives: understand certain enumerated, key aspects f clsing-the-sale issues with leases understand certain enumerated, key aspects f clsing-the-sale issues with internatinal sales understand certain enumerated, key aspects f clsing-the-sale issues with real estate Tpic 20: Risk f Lss with Sales f Gds Key learning bjectives: understand certain enumerated, key aspects f risk f lss with sales f gds Tpic 21: Risk f Lss with Leases, Internatinal Sales, and Real Estate Key cde sectins: 2A-219 Key learning bjectives: understand certain enumerated, key aspects f risk f lss with leases understand certain enumerated, key aspects f risk f lss with internatinal sales understand certain enumerated, key aspects f risk f lss with real estate IV. REMEDIES Tpic 22: Seller s Remedies Key cde sectins: 2-703 sellers remedies in general 17 f 21
2-704(1)(a) right t identify gds t the cntract 2-706 resale resale damages 2-708(1) cntract-price/market-price-differential damages 2-708(2) lst-prfits damages 2-709 actin fr the price Other cde sectins used: 1-201(b)(18) definitin f fungible gds 2-105(4) identificatin f fungible gds in bulk 2-501 identificatin f gds 2-510 effect f breach n risk f lss Key learning bjectives: understand the basic idea theme f remedies fr sellers: the benefit f the bargain understand that sellers under the UCC cannt get cnsequential damages be able t analyze which remedies r cmbinatin f remedies will be mre beneficial t a particular seller given a particular set f facts recgnize 2-703 s fur ways that buyers can breach: wrngfully rejecting gds (refusing t accept) wrngfully revking acceptance failing t make payment when due anticipatrily repudiating the cntract recgnize seven categries f remedies (nt necessarily mutually exclusive) listed under 2-703: withhld delivery f gds stp delivery f gds by a bailee identify gds t the cntract in the case f anticipatry repudiatin resell and recver resale damages under 2-706 recver 2-708 damages fr nn-acceptance cntract-price/market-price differential under 2-708(1) recver lst prfits under 2-708(2) actin fr price under 2-709 cancel the cntract actin fr the price under 2-709: recgnize this as specific perfrmance, an unfavred remedy under the UCC be able t apply 2-709 t determine when this remedy is apprpriate be able t figure ut what happens when this remedy is rdered 18 f 21
seller gets paid the cntract price (KP) while buyer gets the gds and keeps them actin n price = KP with buyer keeping the gds resale and resale damages under 2-706 be able t figure ut resale damages: resale damages are cntract price (KP) less resale price (RP) plus incidental damages (ID) less expenses saved (ES) resale damages = KP RP + ID ES recgnize that fr resale damages t be recverable under 2-706, prper ntice usually must be given recgnize that resale damages d nt give the benefit f the bargain t lst-vlume sellers, wh, withut the buyer s breach, wuld have been able t sell additinal units cntract-price/market-price-differential damages under 2-708(1) be able t figure ut cntract/market-differential damages: cntract/market-differential damages are cntract price less market price (MP) plus incidental damages less expenses saved cntract/market-differential damages = KP MP + ID ES recgnize that the market price is measured by reference t the time and place f tender lst-prfits damages under 2-708(2) be able t figure ut lst-prfits damages: lst-prfits damages are, rughly, the cntract price less csts plus incidental damages lst-prfits damages = KP csts + ID recgnize that lst-prfits damages allw lst-vlume sellers t get the benefit f the bargain Tpic 23: Buyer s Remedies Key cde sectins: 1-305(a) liberal prvisin f remedies benefit f the bargain cnsequential, special, and penal damages prhibited except where specifically prvided fr 2-609 demand fr assurances 2-610 anticipatry repudiatin 2-711(3) self-help remedy f hlding gds as security fr refunding f price fr rightfully rejected r rightfully revked gds 2-712 cver cver damages 19 f 21
2-713 2-714 2-715 cntract-price/market-price differential damages damages fr breach where gds were accepted cst-f-defect damages incidental and cnsequential damages Key learning bjectives: understand the basic idea theme f remedies fr buyers: the benefit f the bargain understand that buyers under the UCC can get cnsequential damages be able t analyze which remedies r cmbinatin f remedies will be mre beneficial t a particular buyer given a particular set f facts recgnize that as a real-wrld matter, large buyers with nging seller relatinships ften use setff n the accunt as a remedy recgnize that generally sellers want t disclaim cnsequential damages as part f the sales cntract, and they ften are able t d s recgnize the rle fr demands fr assurances under 2-609 & 2-610 recgnize the rle fr the self-help remedy f hlding gds as security fr refunding f price fr rightfully rejected r rightfully revked gds under 2-711(3) cver and cver damages under 2-712: understand when cver is applicable and what must be dne under 2-712 fr a buyer t avail itself f this remedy be able t figure ut cver damages: cver damages are return f any payments made by buyer (PYMT) plus cst f cver (CC) less cntract price (KP) plus incidental damages (ID) plus cnsequential damages (CD) less expenses saved (ES) cver damages = PYMT + CC KP + ID + CD ES cntract-price/market-price differential damages under 2-713: understand when cntract/market difference is applicable damages fr nn-delivery r repudiatin be able t figure ut cntract-price/market-price differential damages: cntract-price/market-price differential damages are return f any payments made by buyer plus market price (MP) less cntract price plus incidental damages plus cnsequential damages less expenses saved cver damages = PYMT + MP KP + ID + CD ES cst-f-defect damages under 2-714: understand when cst-f-defect damages are applicable accepted gds nte reasnable-time-f-discvery bar f 2-607(3) be able t figure ut cst-f-defect damages: cst-f-defect damages are the value f the cnfrming gds under the cntract (VCG) less the value f the nn-cnfrming 20 f 21
gds received (VNCG) plus incidental damages plus cnsequential damages cst-f-defect damages = VCG VNCG + ID + CD understand the rle f freseeability in the recverability f cnsequential damages under 2-715(2) under 2-715(2)(a): cnsequential damages are available fr any lss resulting frm buyer s requirements that seller had reasn t knw abut (and which culdn t have been prevented by cver r therwise) in ther wrds, under 2-715(2)(a): any categry f cnsequential lss is recverable, but it is Hadley-freseeability limited under 2-715(2)(b): cnsequential damages are available fr any injury t persn r prperty ( dent r bruise ) prximately caused by breach f warranty in ther wrds, under 2-715(2)(b): recvery is limited t categries f injury t persn r prperty ( dent r bruise ), but it is Hadley-freseeability unlimited 2016 Eric E. Jhnsn. Knmark Mst rights sharable. Instructrs wishing t use this r ther curse cntent withut charge shuld feel free t ask. 21 f 21