Sales Script

First, Is there a K for the sale of goods?

 A K for the sale of good arises when the subject of the K is movable at the time of K.
 Some (most) Ks will contain both sale of goods and services. The UCC uses the
predominant purpose test to determine if UUC or CL will apply. If the K is for the sale of
goods, with services incident, the UCC will apply. But, if the K is for services with goods
incidental, then CL will apply.

Second, now that it is a K for the sale of goods, was a valid K formed?
1. Was there an offer?
a. The UCC retains the CL, unless the UCC displaces the CL rules. The UCC does not
define what an offer is, so we use the CL. The RST 3rd says that an offer is anything
that would reasonably be seen as inviting an offer. If an offer is made, it is freely
revocable until accepted, unless the offer is a firm offer.
i. What is a firm offer?
1. A firm offer is an offer left open for a period of time. It must come
from a merchant, and state, in writing signed by the merchant, that the
merchant agrees to leave the offer open. The offer will be left open for
the time stated, and if not stated, for a reasonable time never to exceed
three months. Also, a firm offer under the UCC does not require
consideration; but, if there is consideration, it can be left open for
longer than the three months.
2. If there was an offer, was it accepted?
a. Under the UCC, an offer can be accepted in any reasonable manner and by any
reasonable means, unless the offer explicitly says how it is to be accepted. This
means that if the offer does not state how it must be accepted, an oferree can accept
by either performing or sending notice of intent to perform. There are three
takeaways from this. First, the offeror is still the master of the offer. This means he
can still dictate how the offer is to be accepted. Second, the UCC did away with the
mirror image rule. This means that form of the offer and the form of the acceptance
 need not be identical, unless the offeror explicitly requires it for acceptance.
Therefore, since the terms don’t have to be identical, a K for the sale of goods will
not fail for indefiniteness; as long as there is quantity and other evidence of intent
allowing a court to create a remedy, a K for the sale of goods will be enforced.
Third, since the oferree can accept by performing, if he performs by sending
nonconforming goods, that is both an acceptance and a breach, unless he sends
seasonable notice, then it is a counter offer.
3. If the offer was accepted, how do we determine the terms of that K? (Battle of forms)
a. A K for the sale of goods will not fail for indefiniteness. As long as quantity is stated
and other evidence showing intent and the court can create a remedy, a K for the sale
of goods will be enforced. Inherently with this, the terms of the offer and the terms of
the acceptance will likely differ. To determine the terms of the K, we look at the
status of each party. If at least on party is not a merchant, the non-matching terms are
considered proposals, and are stricken from the K unless assented too. If both the
parties are merchants, then the new terms are automatically included, unless one of
three exceptions apply. [1] The offer explicitly requires assent to these terms; [2] the
oferree rejects; [3] or if the additional terms are a material impairment. This occurs if
it changes the basis for the bargain, such as if the additions are a surprise and unduly-
harsh. For any terms that are left open, they will be inferred (as long as there is
reason to enforce a K) depending on performance, dealings, custom, or UCC gap
fillers.
4. Also, before knowing if the K will be enforced, we must know if it complies with the SOF.
a. The SOF requires all K for sale of goods of $500 or more must be in writing signed
by the party which enforcement is sought against. If the SOF applies, it is a complete
defense unless waived. Also, there are 5 exceptions. [1] confirmation letter; [2]
Admission before a court; [3] specially manufactured goods, which are goods that are
actually specially made, for the B, it can be resold, and the manufacturer has
substantially performed.; [4] Partial pay; [5] partial delivery. These exceptions apply
because it gives the court reason to believe a K has been formed, thus there is no
fraud—the purpose of the SOF.
Challenging the terms of that K for the sale of goods.
NOTE: If a party is challenging the terms of a K for the sale of goods, depending on what the
claimant is challenging, we either use the parol evidence rule or the modification rule. If the
claimant is challenging the terms before the K is formed—parol evidence. If the claimant is
challenging the terms after the K is formed—modification.

1. A party is challenging the terms of the K prior to formation, we use the parol evidence rule.
a. The UCC parol evidence rule states that if the K is fully integrated, no extrinsic
evidence can come in. But if the K is not fully integrated, extrinsic evidence can
come in as long as it is consistent additional terms. However, in any case
performance, dealings, custom can always come in; and extrinsic evidence can come
in to show no K was formed, some type of illegality, or resolve ambiguates. To
determine if a K is fully integrated, we look at four factors: [1] the sophistication of
the transaction; [2] whether the parties were represented by counsel; [3] the time it
took the parties to negotiate and draft the K; [4] and a merger clause, though this
alone is not enough.
b. Two step method: First, determine the integration of the K; second, determine what is
trying to come in: extrinsic evidence or conduct. However,
2. A party challenging the terms of the K after it was formed, modification.
a. Under the UCC, no consideration is required to modify a K. Also, a modification
does not need to be in writing, unless the original K requires or the SOF requires.
Also, all modifications must be in good faith. This means honesty in fact and within
in reasonable commercial standards; it can’t be to harass or coerce.

A K for the sale of goods has been formed and will be enforced, but the terms are
not complete. What are the terms?
A K under the UCC will not fail for indefiniteness; as long as there is quantity and other intent of
K so a court can a form a remedy, K will be enforced. To determine to terms of the K, look at:
1. Use the written terms of the parties that do align.
2. After that use course of performance, course of dealings, trade usage, and then the UCC Gap
Fillers.
a. What are the UCC Gap Fillers?
i. If there is no price, it is a reasonable price at time of delivery. If no method of
payment, it a reasonable commercial method. If no time of pay, it is time and
place of delivery. If no delivery date, a reasonable one. If not method of
delivery, shipment K. If no place of delivery, sellers place of delivery.
3. If the parties did not K about warranties, there are implied warranties.
a. The implied warranty of title, states that the seller promises he is selling good title
free from liens and other security claims. However, the seller can disaffirm good
title. Also, if not disclaimed, the shelter rule applies.
b. Also, there can be express warranties of quality. These are created by any
affirmation of fact regarding the good. They are created by any statement comparing
the good to something or implying it is like something. However, the representation
must be more than mere puffery, meaning, it must be part of the basis for the bargain.
Most attempts to disclaim express warranties fail, because of its contradiction. Also,
the buyer must notify the seller of the breach to preserve its remedy.
c. For every sale of goods, unless disclaimed or modified, there is an Implied
Warranty of Merchantability. This means that the seller, who must be a merchant,
promises the goods are fit for their ordinary purpose. Meaning they are of like grade
and quality of goods in the trade. This is in terms of manufacturing, labeling, and
packaging. Ordinary purpose means any reasonably foreseeable purpose. This
warranty can be disclaimed either orally or written, but it was specifically state that it
is disclaiming the IWoM. If it is written, it must be conspicuous. Also, the buyer
must notify the seller of the breach to preserve its remedy.
d. For every sale of goods, unless disclaimed or modified, there is an Implied
Warranty of Fitness for a Particular Purpose. This applies when the seller, who
does not have to be a merchant, knows or should know that buyer is buying this good
for a particular purpose, and that the buyer relies on the sellers representations of the
good for that purpose and buys the good. The seller need not have actual knowledge
 the buyer is relying on him, just that it is reasonable to conclude that byer relied on
sellers representations. Also, if the buyer does not rely on seller, meaning he had his
own knowledge or looking for a particular thing, IWoFFPP does not apply. It can
only be disclaimed in writing and with conspicuous language. Also, the buyer must
notify the seller of the breach to preserve its remedy.

Now that we know that a K will be enforced and the terms of that K, what must
each party do to not breach the K?
1. The seller must perform.
a. Under the UCC, the seller must do perfect tender. This means that he must tender
conforming goods. Tender means to make reasonably available to the buyer, whether
it is notification of available to pick up, or shipment. However, if the seller sends
nonconforming goods, he may be able to cure the nonconformity, so not to be in
breach.
2. Once the seller has tendered, the buyer has the right to inspect the goods.
a. Inspection must be in a reasonable manner and a reasonable time and place. Also, the
buyer must pay the costs of inspection, but it can recoup under incidental damages
upon breach. If the K is a COD or prepayment K, payment does not equal
acceptance. If the buyer fails to reject the goods in a reasonable time, he has accepted
the goods.
3. Acceptance.
a. If the goods are conforming goods, the buyer must accept them. Upon acceptance,
the buyer must pay for the goods, and he loses his right to reject. Also, if he does not
seasonably notify the seller of any deficiencies, he loses his remedy. Acceptance
results by either an express or implied acceptance, failing to reject in a timely manner,
or otherwise acting inconsistent with the sellers ownership rights.
4. Uh oh, the goods are non-conforming, what do we do?
a. Were the goods accepted?
i. No. If the goods are not accepted, then the buyer can reject the goods, for any
amount of nonconformity. However, if the buyer is rejecting the goods, he
must give the seller reasonable notice so the seller can attempt to cure. If the
 non-conformity is de minimis, then the seller can cure. Also, if the buyer is
rejecting the goods, depending on the status of the buyer, he is held to
standards while holding the goods.
ii. Yes. If the goods were accepted, the buyer can no longer reject them.
However, the buyer may try and revoke. Revocation can occur if there is a
substantial harm to the buyer, and some type of justification. Substantial harm
to buyer usually means economic harm. Justification occurs in one of three
ways: [1] buyer thought seller would cure, and he didn’t; [2] latent defect; [3]
specific assurance. Also, the buyer must give the seller reasonable notice of
the revocation.
5. If the goods are non-conforming, sellers right to cure.
a. If the goods are nonconforming, the seller may be able to cure. If the time to perform
has yet to expire, unconditional right to cure. If time has lapses, can only cure if he
gives reasonable notice of intent to cure, and if he reasonably believes buyer will
accept the goods.

When can performance be excused?

If the ROL has passed to buyer, performance will not be excused. If ROL has not passed to
buyer, performance may be excused.
- Shipment K- B pays insurance and freight cost. ROL passes when delivered to carrier.
- Destination K- S pays insurance and freight cost. ROL passes when delivered to buyer.
- Non-carrier K-
o Seller is a Merchant—ROL passes when buyer actually receives goods.
o Seller is a Non-merchant—ROL passes on tender of delivery.

 If the ROL has not passed to buyer, the performance of seller may be excused. In order for
the excuse doctrine to apply, the goods must have been identified to the K, the ROL must not
have passed to buyer, there must be some devastation, at no fault of either party. If so, the
sellers performance will be excused.
 Also, if the performance has become exceedingly difficult, performance may be excused.
However, the impracticability cannot be at the fault of either party, and there cannot be any
 reasonable commercial alternatives. Also, if the parties could foresee or contemplated the
event, not excused. Also, increase in cost alone is not enough.
 If party receives assurance from the other party of its intent or inability to not perform, the
party who is able to perform can repudiate the K. However, repudiation is only applicable
when it deprives the aggrieved party of substantially the whole of the benefit that they would have
received if the remaining obligations were performed under the contract. If the performing party
anticipates a repudiation, he can: perform and wait and see if the party performs, if not then sue; go ahead
and sue, even if he gave notice that he would wait; or suspend his own performance (IF HE SUSPENDS
HIS OWN PERFORMANCE, CAN HE SUE???).

If there is a breach of the K, what are the remedies?

Buyers remedies
 The buyer can Cover. This means he goes into the market place and buys an alternative. The
remedy is the market price minus the K price. Also the buyer can get incidental and
consequential damages where applicable. However, though cover is not mandatory, a buyer
who fails to cover will have the difference made up in the damages.
 The buyer can, sometimes, get specific performance. This only occurs when the goods are
unique and are identified to the K. Also, there can be no substitute in the market place. If
the buyer choses this remedy, he may also get incidental and consequential damages, where
applicable.
 Also, for any breach, the remedy will be the price paid minus the K price.
 The buyer can get incidental damages, which are out of pocket expenses.
 Consequential damages, foreseeable harms.

Sellers remedies
 Resale is the sellers form of cover. It allows him to resale the goods, in good faith. He can
recover from the buyer the sale price minus the K price. Also, he can get incidental damages,
and if applicable consequential damages.
 Sue for the price is his version of specific performance. It allows him to sue for the K price.
 Any other remedies are price paid minus k price.