Dynamic Business Law, 2024,
6e By Nancy Kubasek
(Instructor's Manual All
Chapters, 100% Original
Verified, A+ Grade)
Part 1: CH 15-25: Page 2-96
Part 2: CH 1-14: Page 97-293
, Part 1
Chapter 15 - Formation and Performance of Sales and Lease Contracts
Chapter 15: Formation and Performance of Sales and Lease Contracts
CHAPTER OVERVIEW
The Uniform Commercial Code (UCC) was created for businesses and organizations that purchase products. The
language in the UCC can apply to many different organizations. For example, the University of Minnesota is
considered a merchant under the UCC. Because the UCC affects many businesses and organizations, each
business or organization needs to be aware of the laws that apply to it.
Begin by asking students to read the chapter and reply to review and case questions at the end of the chapter
Focus on the scope and significance of the UCC, Articles 2 and 2(A) of the UCC, and how contracts are formed
under the UCC. To help students develop critical thinking skills, assign the critical thinking questions that follow
each case.
LEARNING OBJECTIVES
After reading this chapter, students will be able to answer the following questions:
1. What kinds of contracts fall under the UCC interpretations?
2. What is a sales contract under the UCC?
3. What is a merchant, and why is that designation significant?
4. What is a lease contract?
5. What is the CISG?
6. What is the concept of title? How does it pass?
7. What is risk of loss?’
BUT WHAT IF SECTIONS
1. If the plaintiff agreed to accept risk of loss with the title via a contract, then they are liable as soon as they
gain title of the mobile home.
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,Chapter 15 - Formation and Performance of Sales and Lease Contracts
LECTURE NOTES WITH DEFINITIONS
What is a sales contract • The Uniform Commercial Code (UCC) is a uniform/model law that
under the UCC? governs commercial transactions.
• The UCC adds clarity and predictability to sales law.
Teaching tip: Ask students, “What other uniform/model laws have we
studied so far? Do they have the same purpose, e.g., to add clarity and
predictability to an area of law?”
• Article 2 (Sales) covers contracts for the sale of goods.
o A sale is the passing of title from the seller to the buyer for a
price.
o Goods are tangible things that can be moved.
o If a contract includes both goods and services, Article 2 applies
if goods are the predominant part of the transaction.
o Merchants are buyers or sellers who (1) deal in goods of the
kind, (2), by occupation, hold themselves out as having
knowledge and skill unique to the practices or goods involved
in the transaction, or (3) employ a merchant as a broker, agent,
or other intermediary.
What kinds of • The types of contracts that fall under the UCC interpretations include
contracts fall under the sales contracts, under Article 2, and lease contracts, under Article
UCC interpretations? 2(A).
What is a merchant, • The UCC does not apply the mirror-image rule. Courts consider whether to
and why is that allow additional terms on a case-by-case basis.
designation • Contracts for the sale of goods must be in writing if the goods are
significant? valued at $500 or more.
• Exceptions exist for:
o Specifically manufactured goods.
o Contracts that parties admit exist.
o Situations in which partial performance has occurred.
Teaching tip: Ask students to compare the three cases in this section of
the chapter—why is each in the book?
What is the CISG? • The CISG is a treaty countries can sign that governs international
business-to-business sales contracts.
• The CISG provides clarity, predictability, and uniformity for
businesses that operate in the global economy.
What is a lease • Article 2(A) (Leases) covers contracts for the lease of goods.
contract? o A lease transfers the right of possession and use of goods for a
specific term, in return for consideration.
o The UCC outlines rules for various kinds of leases, including
consumer leases and finance leases.
What is the concept of • Three kinds of title:
title? How does it o Good title—acquired from someone who owns goods, free and
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, Chapter 15 - Formation and Performance of Sales and Lease Contracts
pass? clear.
o Void title—acquired from someone with stolen goods.
o Voidable title—occurs in situations in which the contract
between the original parties would be void, but the goods have
already been sold to a third party.
Alfonso Candela v. Port Motors, Inc. (briefed below) considers the sale of
a stolen vehicle and whether a car dealership’s title was voidable or void.
• Third party purchasers usually get good title.
• If an owner entrusts the possession of goods to a merchant, the
merchant can transfer all rights in the books to a buyer in the ordinary
course of business.
Teaching tip: In this chapter, it will be important for you to walk through
the facts of every case with the students—the material is especially
complex.
What is risk of loss? • Risk of loss is a concept that articulate whether the buyer or seller
bears the burden when something goes wrong.
Point/Counterpoint: Teaching tip: Here are some questions to help you tie the
Should the UCC Be Point/Counterpoint into class discussion:
Expanded to Include • Is the UCC the best legal structure to handle realty and service
the Sale of Realty and sales?
Services? • What would we lose by switching to the UCC?
CASE BRIEFS WITH ANSWERS TO THE QUESTIONS
Case 15-1 Larson v. Burton Constr., Inc., 2018 WY 74 (2018)
Case Brief
Issue:
Is the matter at hand a mutual mistake or a breach of contract?
Facts:
Burton entered into a written contract with Larson in which Larson agreed to purchase a mobile home from
Burton. The contract was a “form” contract consisting of boilerplate text with blank lines in which to enter
information. Although the mobile home in question was new and the parties intended to convey a new mobile
home, the form was for the sale a used mobile home. Thus, the contract required Burton to execute and deliver a
title at closing. Burton argued that despite the language of the contract, it was not his custom to deliver a title to
purchasers of a new mobile home. Receiving no title at the closing, Larson sued for breach of contract.
Procedural History:
The district court reversed the circuit court’s finding of a mutual mistake of the parties. Larson appealed.
Holding:
Affirmed in part and reversed in part.
Reasoning:
• The contract unambiguously requires Burton to provide a title at closing.
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