UCC — Sales

MBEMax wiki article — paired with the Contracts question set on mbemax.com.

One-line summary

Article 2 of the UCC governs contracts for the sale of goods — movable tangible property — replacing common-law rules with more flexible formation, modification, gap-filling, and remedy provisions tailored to commercial transactions.

Mnemonic

G-M-P-R — Goods (scope), Merchant vs. non-merchant rules, Perfect-tender, Risk of loss & remedies.

Picture a shipping container labeled "GMPR" rolling through the UCC pipeline.

Scope — what are "goods"?

• All things movable at the time of identification to the contract (§ 2-105).
• Includes growing crops, unborn young of animals, and other identified personalty.
• Excludes real property, services, intangibles, investment securities.
• Mixed contracts (goods + services) — "predominant purpose" test; if goods dominate, Article 2 applies; if services dominate, common law. Bonebrake v. Cox.

Formation — flexible

• § 2-204 — contract may be made in any manner sufficient to show agreement, including conduct. Terms may be omitted without defeating formation.
• § 2-205 firm offer — merchant's signed, written promise to hold offer open is irrevocable up to 3 months, even without consideration.
• § 2-206 — offer may be accepted in any reasonable manner. Shipment of conforming goods is acceptance (accommodation shipment with notice = counteroffer).
• § 2-207 battle of the forms — non-mirror-image acceptance not a rejection; additional terms between merchants become part of contract unless (a) offer limits acceptance to its terms, (b) terms materially alter, or (c) timely objection. Different terms — knockout rule in many jurisdictions.

Gap fillers

• Price (§ 2-305) — reasonable price at time of delivery.
• Delivery place (§ 2-308) — seller's place of business; residence if none.
• Delivery time (§ 2-309) — reasonable time.
• Payment (§ 2-310) — due at time and place where buyer is to receive goods.
• Single-lot delivery (§ 2-307) — unless otherwise agreed.

Warranties

• Express (§ 2-313) — affirmations of fact, descriptions, samples, or models that become basis of bargain. Statements of opinion and puffery are not express warranties.
• Implied warranty of merchantability (§ 2-314) — merchants in that kind of goods; goods fit for ordinary purposes; passes without objection in trade; runs of even quality; adequately packaged; conforms to label.
• Implied warranty of fitness for particular purpose (§ 2-315) — seller knows buyer's specific purpose and that buyer is relying on seller's skill or judgment.
• Disclaimers — express warranties hard to disclaim (cannot both warrant and disclaim). Merchantability may be disclaimed with "merchantability" in conspicuous language. Fitness must be by conspicuous writing. "As is" / "with all faults" disclaims both implied warranties (§ 2-316).
• Magnuson-Moss Warranty Act — federal overlay for consumer goods; restricts ability to disclaim implied warranties when express written warranty given.

Performance — perfect tender

• § 2-601 Perfect-tender rule. Buyer may reject goods or tender that "fails in any respect to conform to the contract."
• Cure (§ 2-508) — seller may cure non-conforming tender before performance date; may cure late if seller had reasonable grounds to believe the tender would be acceptable.
• Installment contracts (§ 2-612) — substantial impairment required before rejection of installment or whole.
• Acceptance — acts inconsistent with rejection, signifying conforming acceptance, or retention after reasonable opportunity to inspect.
• Revocation of acceptance (§ 2-608) — non-conformity substantially impairs value; acceptance was on assumption non-conformity would be cured or without knowledge of defect; revocation within reasonable time.

Risk of loss (§§ 2-509, 2-510)

• Shipment contract (FOB seller) — risk passes when seller tenders to carrier. Default for shipment.
• Destination contract (FOB buyer) — risk passes when tender at destination.
• Non-carrier sale — if seller merchant, risk passes on receipt; if non-merchant, on tender.
• Breach rule (§ 2-510) — if seller's tender is non-conforming, risk stays with seller until cure or acceptance.

NCBE loves to test

• Predominant-purpose test. Mixed contracts; key inquiry.
• § 2-207 analysis. Steps: (1) Was there a contract? (2) If yes, do additional/different terms get in? (3) Material alteration examples (arbitration, warranty disclaimers).
• Firm offer rules. Merchant + signed writing + assurance to hold open; 3-month max irrevocability.
• Implied warranty triggers. Merchantability requires the seller be a merchant in those goods. Fitness for particular purpose requires disclosure and reliance.
• Disclaimers. "As is" = effective. Conspicuous language of merchantability / fitness = effective.
• Perfect-tender narrowing. Installment contracts relaxed; cure available.
• Risk of loss. Shipment contracts are the default; magic words "FOB" matter.
• Statute of limitations. § 2-725 — four years from breach; can be shortened to one year by agreement but not less.
• Remedies. Cover (§ 2-712), market-price damages (§ 2-713), incidental + consequential damages (§ 2-715), specific performance when goods unique or other proper circumstances.

Fast hypos

Hypo 1. Contract for 1,000 widgets at $2 each. Seller tenders 999 widgets. Buyer rejects. Perfect-tender rule — buyer may reject; seller may cure before performance date.

Hypo 2. Merchant confirms an oral deal by signed writing; other merchant doesn't object within 10 days. § 2-201 merchant confirmation — SOF satisfied against both.

Hypo 3. Seller agrees to deliver a boat "FOB Seller's dock." Boat sinks during ocean shipment. Shipment contract — risk passed to buyer on tender to carrier; buyer bears loss.

Hypo 4. Consumer buys car with "as is, no warranties" in fine print. Car breaks within a week. "As is" likely effective to disclaim implied warranties unless Magnuson-Moss express-written-warranty overlay applies.

Case anchors

• Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974) — predominant-purpose test.
• Jannusch v. Naffziger, 379 Ill. App. 3d 381 (2008) — conduct forming contract under § 2-204.
• ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) — shrinkwrap.
• Bayliner Marine Corp. v. Crow, 509 S.E.2d 499 (Va. 1999) — statement of opinion not express warranty.

See also

• Offer and Acceptance
• Statute of Frauds
• Modification
• Parol Evidence
• Breach

Sources

UCC §§ 2-105, 2-201 through 2-210, 2-301 through 2-328, 2-501 through 2-515, 2-601 through 2-616, 2-701 through 2-725; Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301–2312; Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974); Bayliner Marine Corp. v. Crow, 509 S.E.2d 499 (Va. 1999).