REG B-LAW UCC Contracts

Special rules that apply only to contracts for the sale of goods UCC

Sales Article includes certain rules that only apply to merchants, someone who deals with goods.

Merchants Firm Offer

Are written promises by merchants to keep the offer open. They are irrevocable for the time stated, but in any case, not longer than three months.

Mirror Image rule

Does not apply

SHipment of nonconforming goods

Constitutes both an acceptance and a breach of contract

Auctions

• Generally the bid is the offer, and the acceptance is the fall of the hammer

• Generally, auctions are with the reserve; the seller does not have to sell

• If the auction sates that it is without reserve, the highest bid must be accpeted

Fraud(Defense)

The defrauded party may rescind and sue for damages

Statute of Limitations

Four years from the time the contract was breached

Statute of Frauds

Contracts for the sale of goods for $500 or more must be in wriitng including the quantity. Exceptions for SWAP, Specially manufacured goods, written confirmation, admission in court, and perfomance.

Identification

For the risk of loss (ROL) to pass, the goods must be identified as the goods for this contract.

FOB

Means free on board. Designation is followed by a destination. ROL passes when the goods reach the destination.

Effect of Breach

If the seller sends nonconforming goods, ROL always remains with the seller.

Sale on approval

ROL on the seller until the buyer gives approval

Sale on Return

ROL passes to the buyer when the seller delivers

Title

The title can pass as parties agree, but it cannot pass before the goods are identified to the contract.