Regulation of Accounting

Goods

Things (other than money, stocks, and bonds) that are tangible, movable, and valuable.

Future goods

Goods that are not yet in existence or under the control of people.

the law that is applied to the contract will differ depending on the nature of the contract.

It is important to identify whether the contract is for goods or services because____________________________

predominant factor

We look at the _____________ to apply the law

Good faith

Under the UCC, every contract or duty imposes an obligation of good faith.

All parties must act honestly

Course of Dealings

When the parties have dealt with each other before, their prior dealings give special meaning to sales contracts.

Usage of trade

Any method of dealing that is commonly used in the particular field.

enforceable sales contract

An _________________ may come about even if the exact moment of its making cannot be determined and even though some terms are not completely agreed upon.

Acceptance

Unless otherwise indicated, the offeree may accept the offer in any reasonable manner.

Timing

A contract comes into existence when the acceptance is sent, as long as it is sent by a reasonable method.

Conforming goods

Those that are in accordance with the obligations under the contract.

Nonconforming goods

Those that are not the same as those called for under the contract or that are in some way defective.

Firm Offer

In writing, signed by the merchant; max time period for holding the offer open is three months.

No consideration is necessary when a merchant promises in writing to hold an offer open for the sale or lease of goods

Merchant

Person who deals in goods of the kind sold in the ordinary course of business or who otherwise claims to have knowledge or skills peculiar to those goods.

higher standard

The UCC holds merchants to a ______________ than nonmerchants.

Additional Terms in Acceptance

A contract for the sale of goods occurs even though the acceptance states terms that are additional to or different from those offered or agreed upon (unless acceptance is made conditional on assent to the additional terms).

Are treated as proposals for additions to the contract if the parties are not both merchants.

Modification

An agreement modifying a contract for the sale of goods needs no consideration to be binding.

Any such __________ may be oral unless the original agreement is in writing and provides that it may not be modified except by a signed writing.

Writing Requirement - Sales Contract

As long as the price is under $500, an oral contract for the sale of goods is enforceable.

If the price is $500 or more, a sales contract must be in writing to be enforceable.

The writing that is required to satisfy the UCC must indicate that a contract for sale has been made between the parties and mention the quantity of goods being sold.

It must also be signed by the party against whom enforcement is sought (the defendant).

Under the UCC, a signature includes any symbol made with the intent to authenticate a writing.

Shipment contract

One in which the seller turns the goods over to a carrier for delivery to the buyer.

f.o.b.(Free on board)

When goods are sent f.o.b. the place of shipment, they will be delivered free to the place of shipment.

The buyer must pay all shipping charges from there to the place of destination.

Destination Contracts

Contracts that require the seller to deliver goods to a destination.

Unconscionable contract

One that gives an unfair advantage to one of the parties

Tender of Delivery

Occurs when seller makes conforming goods available to buyer

Place of Delivery

If contract does not specify, then place is the seller’s place of business/residence or location of goods

Shipment contracts

Must deliver goods to carrier and make contract for transport

Destination contracts

Must tender goods and hold at the buyer’s disposal