Contract Law & Commercial Transactions Flashcards

Two merchants exchange forms for a sale of goods. The buyer's acceptance adds an arbitration clause not in the seller's offer, which did not limit acceptance to its terms. The seller does not object. Under UCC 2-207, the arbitration clause:

Answer: Becomes part of the contract unless it materially alters the agreement

Between merchants, additional terms become part of the contract unless the offer limits acceptance, the terms materially alter it, or the offeror objects.

A merchant signs a written promise to hold an offer open for 6 months, and the offeree gives no consideration. How long is the offer irrevocable under the UCC firm offer rule?

Answer: 3 months

Under UCC 2-205, a merchant's signed firm offer cannot be revoked for the stated time, but never for more than three months without consideration.

Under UCC 2-201, a contract for the sale of goods must be evidenced by a signed writing when the price is at least:

Answer: $500

Article 2's statute of frauds covers sales of goods for $500 or more.

Merchant A sends Merchant B a signed written confirmation of an oral sale of goods. B has reason to know what it says. To keep the statute of frauds defense, B must send written notice objecting within:

Answer: 10 days

Under the merchant's confirmation rule, the writing satisfies the statute against the recipient unless they object in writing within 10 days.

A buyer rightly rejects nonconforming goods delivered before the contract deadline. What right does the seller have?

Answer: To notify the buyer and cure with a conforming delivery before the deadline

UCC 2-508 lets a seller cure a rejected tender if the time for performance has not yet expired.

Under an F.O.B. seller's-city shipment contract, when does the risk of loss pass to the buyer?

Answer: When the seller properly delivers the goods to the carrier

In a shipment contract, risk passes when the seller duly delivers conforming goods to the carrier.

A merchant seller sells a sofa to a buyer who will pick it up the next day. No carrier is involved and nothing is agreed about risk. A fire destroys the sofa overnight in the seller's store. Who bears the loss?

Answer: The seller, because risk passes only when the buyer receives the goods

Under UCC 2-509(3), when the seller is a merchant, risk passes only when the buyer receives the goods.