Assistant Professor Glen M. Vogel, P.E., Esq. Hofstra University Zarb School of Business Department of Accounting, Taxation, and Legal Studies ~~~~~~~~~~~~~~~~~~~~~~~~~~~~. Virtual Enterprises International. Hypothetical
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Glen M. Vogel, P.E., Esq.
Zarb School of Business
Department of Accounting, Taxation, and Legal Studies
of the UCC
Sale of Goods
Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.
Unless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.
Goods, to be merchantable, must:
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promise or affirmations of fact made on the container or label if any.
As an example: if Alice lends Bob a $10 bill, she does not care if she is repaid with the same $10 bill, two $5 bills, a $5 bill and five $1 bills or bunch of coins that total $10 as currency is fungible. However, if Bob borrows Alice's car she will most likely be upset if Bob returns a different vehicle--even a vehicle that is the same make and model--as automobiles are not fungible with respect to ownership.
A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
A valid contract requires 6 things:
Agency: a fiduciary relationship that results when one person (the principal) manifests his consent that another person (the agent) will act on his behalf and subject to his control and the agent manifests an intent to so act.
Specific Agency Rules:
The following website produced by Cornell University School of Law is a great resource for issues surrounding the sale of goods. It has all of the relevant sections of the UCC available for your review.