Contract Formation and UCC vs Common Law

Tangible, movable items in a sales contract, excluding money used for payment, investments, and intangible property. Includes unborn animals and growing crops.

Someone who regularly deals in specific goods or holds themself out as knowledgeable about the products involved in a transaction, possibly via an agent or broker.

Requires an offer, acceptance, and consideration to be binding. Consideration is a value exchanged between parties.

Does not require consideration to be binding.

Essential parts of a contract that, if missing or changed, would significantly alter the agreement's purpose, making it unenforceable.

A contract is formed based on the outward expression of intent to be bound, not just the parties' internal thoughts.

Both parties must agree to the same terms, demonstrated by offers and acceptances, ensuring a meeting of the minds.

A clear proposal to enter into a bargain with specific terms, inviting the other party to accept or reject it.

Unequivocal agreement to the terms of an offer, showing willingness to be bound. It can be a promise or performance.

Something of value traded between parties to make a contract enforceable. It can be a promise, an act, or forbearance.

An acceptance must exactly mirror the terms of the offer, any changes are considered a counteroffer rejecting the original offer.

This UCC section rejects the mirror image rule for sales of goods. A response with additional or different terms is generally considered an acceptance, not a counteroffer.

Actions or words that show agreement between parties can create a contract, even if a formal written agreement is planned.

Early discussions and exchanges that do not create a binding contract, as the parties haven't reached a final agreement.

The offeror bears the risk of a mistake in the offer if it's not clear to a reasonable person. If the offeror misstates terms, the offeror is bound by the reasonable interpretation.

An offeror can revoke an offer before acceptance by communicating their change of mind to the offeree. This occurs directly by the offeror or indirectly, if the offeree learns the offer is no longer available.

An offer can be revoked indirectly if the offeree learns, through a reliable source, that the offer is no longer available, even if the offeror didn't directly communicate this.

A separate contract that binds an offeror to keep their original offer open for a specific period of time in exchange for consideration (payment).

An offer can expire if the offeree doesn't accept within a specified time frame provided by the offeror or, if no time is specified, within a reasonable time.

If the offeror dies or becomes incapacitated before acceptance, the offer terminates. This also applies after acceptance if the performance relies on the offeror's unique abilities.

When an offer invites acceptance by performing an action, the act itself serves as acceptance, creating a binding contract. The offeror doesn't need notification unless the offer explicitly requests it.

If the offeror has no way to easily and reliably know you've started performing, you have a responsibility to notify them. This prevents the offeror from being bound unknowingly.

Learning of an offer after partially performing a requested action allows you to accept by completing the performance. It's as if you retroactively agree to the offer.

An option contract protects the offeree by keeping an offer open if they start performing. This prevents the offeror from withdrawing their offer during performance.

If an offer allows acceptance by either performing or making a promise, beginning performance automatically creates a contract, acting as a promise to complete.

If the offeror has no easy or reliable way to know you've started performing, you have a responsibility to notify them. This prevents the offeror from being bound unknowingly.

This UCC section addresses conflicting terms in contracts for goods, rejecting the common law mirror image rule. A response with additional terms is usually accepted as a contract.

A pattern of actions in a sales contract that provides evidence of how parties intended to carry out their agreement. It's relevant if there were repeated performances, and both parties knew what was happening.

If the course of performance, course of dealing, and usage of trade create an unreasonable interpretation when combined with the contract's express terms, then the express terms override the other sources. Course of performance is second, and trade usage is lowest in precedence.

This UCC section focuses on contracts formed through exchanges of forms. If an acceptance or confirmation contains different or additional terms, it may still be a contract, but the terms may need to be reviewed to determine their inclusion.

If an acceptance contains additional terms that are a material alteration, they are not included in the contract unless the offeror agrees. A material alteration significantly changes the agreement's risk or obligations.

When forms contain contradictory terms, the terms are knocked out and replaced with gap-fillers from the UCC or trade practices. This rule applies when there's no agreement on those terms.

If both parties in a goods contract are merchants, and new terms appear in the acceptance, they become part of the contract unless they materially alter the contract, the offeror objects within a reasonable time, or the offer expressly limits acceptance to its terms.

When two parties' contract forms have conflicting terms, those terms are 'knocked out' and replaced with UCC gap fillers (or trade practices). This happens when there's no clear agreement on those specific terms.

An additional term in an acceptance that significantly changes the contract's risk or obligations, making it a 'material alteration'. It's not automatically part of the contract unless the offeror explicitly agrees to it.

Default provisions within the Uniform Commercial Code (UCC) that fill in missing or conflicting terms in contracts for the sale of goods. They help ensure a contract is enforceable even if some details were not explicitly agreed upon.

When parties agree on the basics of a deal but disagree on significant terms that have different meanings to each person. This can prevent a contract from forming if the misunderstanding is material.

The parties may not have discussed everything yet, or they might have done a bad job of negotiating, leaving some terms unclear. They might also have agreed to discuss those remaining terms at a later time.