Contract Formation Under UCC Article 2: every key term you need (+ practice quiz)
25 flashcard terms for Contracts Topic 3, written to match the course framework. Study them here, then drill them as interactive flashcards, or test yourself with the 15-question quiz — free, no account needed.
Article 2 governs transactions in goods, meaning things movable at the time of identification to the contract, and it displaces inconsistent common law rules for those sales.
Goods
Movable things identified to the contract, including growing crops and unborn animals, but excluding money as the price, investment securities, and interests in land.
Predominant purpose test
For a mixed contract of goods and services, courts apply Article 2 only if the sale of goods is the dominant thrust of the deal, judged by language, billing and the relative value.
Merchant
A party who deals in goods of the kind or otherwise holds itself out as having knowledge or skill peculiar to the practices or goods involved, a status that triggers stricter Article 2 rules.
UCC 2-204 formation
A sales contract may be made in any manner showing agreement, including conduct, and it does not fail for indefiniteness if the parties intended to contract and a remedy can be fashioned.
Open price term
Article 2 lets parties conclude a sale without fixing price, in which case the price is a reasonable price at the time of delivery unless they intended not to be bound without agreement.
Gap fillers
Default terms that Article 2 supplies for place of delivery, time of shipment, payment and similar matters when the parties are silent, preserving deals the common law might void.
Firm offer
Under UCC 2-205 a merchant's signed written assurance to hold an offer open is irrevocable without consideration for the stated time, capped at three months.
UCC 2-206 acceptance
Unless clearly indicated otherwise, an order for prompt shipment may be accepted either by a prompt promise to ship or by prompt shipment of conforming or nonconforming goods.
Accommodation shipment
Shipping nonconforming goods with notice that they are offered only as an accommodation is a counteroffer rather than an acceptance and breach, protecting the accommodating seller.
UCC 2-207 battle of the forms
A definite and seasonable expression of acceptance operates as an acceptance even with additional or different terms, unless acceptance is expressly conditioned on assent to those terms.
Additional terms between merchants
Under UCC 2-207 subsection two, additional terms become part of the contract between merchants unless the offer limits acceptance, the term materially alters the deal, or objection is given.
Material alteration
A proposed term causing surprise or hardship if incorporated without express awareness, such as a disclaimer of implied warranties or a broad arbitration clause in some jurisdictions.
Knockout rule
The majority approach to conflicting terms in exchanged forms: the clashing terms cancel each other out and Article 2 gap fillers supply the missing default term.
Last shot rule
The displaced common law result whereby the party who sent the final form before performance dictated the terms; UCC 2-207 was drafted to abolish this outcome.
Contract by conduct
Where writings do not form a contract but the parties perform, UCC 2-207 subsection three creates a contract on the terms both writings share plus statutory gap fillers.
Course of performance
Repeated occasions for performance under this contract, accepted without objection, which is the strongest of the contextual sources for interpreting and supplementing terms.
Course of dealing
Prior conduct between these parties in earlier transactions that establishes a common basis of understanding for interpreting their expressions and other conduct.
Usage of trade
A practice so regular in a place, vocation or trade that parties can fairly expect it to be observed, which may supplement or qualify the express terms of a sale.
Confirmatory memorandum
A writing sent after an oral deal that confirms it; between merchants it can satisfy the writing requirement against the recipient who fails to object within ten days.
UCC 2-201 statute of frauds
A sale of goods for five hundred dollars or more needs a signed writing indicating a contract and stating a quantity, subject to several statutory exceptions.
Specially manufactured goods exception
An oral sale is enforceable when goods are custom-made, not suitable for resale in the seller's ordinary course, and the seller has substantially begun manufacture or procurement.
Admissions exception
An oral sales contract is enforceable up to the admitted quantity when the party being sued admits its existence in pleadings, testimony or other court proceedings.
Modification under UCC 2-209
An agreement modifying a sales contract needs no consideration, but it must be sought and given in good faith, and may need to satisfy the statute of frauds as modified.
Unconscionability under UCC 2-302
A court may refuse to enforce a sales contract or clause it finds unconscionable as of the time of making, or limit its application to avoid an unconscionable result.