Source: https://ceb.com/california-ucc-sales-and-leases
Timestamp: 2019-02-20 01:33:15
Document Index: 724346916

Matched Legal Cases: ['§2205', 'arty 4', 'arty 4', 'arty\n1', 'arty 4', 'arty 9', '§2210', 'arty 11', '§15', '§15', '§15', '§19', '§19', '§19', '§19', '§2', '§41713', '§9', '§12', '§499']

California UCC Sales and Leases | Legal Research | CEB
Sales contracts: terms, warranties, the battle of the forms
Seller's and buyer’s performance
Breakdown of the bargain
Prelitigation and litigation remedies
Sales agreement and lease agreement checklists
Quick-reference summary of remedies for both buyer and seller
OnLAW BU94470
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I. INTRODUCTION TO COMMERCIAL CODE 1.1
A. Uniform Commercial Code 1.2
B. Rules of Construction 1.3
II. SCOPE OF DIVISION 2
A. Application to Transactions in Goods 1.4
1. Definition of “Goods” 1.5
a. Included Transactions 1.6
b. Excluded Transactions 1.7
2. Future Goods 1.8
B. Mixed Transactions
1. Transactions Involving Both Goods and Services: Predominant Feature Test 1.9
2. Transactions Involving Software 1.9A
3. Sales of Business Assets Including Goods and Non-Goods 1.10
C. Particular Transactions
1. Leases 1.11
2. Franchises and Distributorships 1.12
3. Bailments 1.13
4. Installation, Service, and Repair Contracts 1.14
5. Consignment 1.14A
D. Relation to Division 9 1.15
E. Relation to Other Laws 1.16
1. Consumer Transactions 1.17
2. International Transactions 1.18
III. KEY PRINCIPLES AND POLICIES OF DIVISION 2
A. Contract Formation 1.19
B. Variation by Agreement 1.20
C. Good Faith 1.21
D. Course of Performance, Course of Dealing, and Usage of Trade 1.22
E. Passing of Title 1.23
F. Merchants 1.24
IV. OUTLINE OF DIVISION 2 1.25
V. TABLE: TERMS USED IN DIVISION 2 1.26
Formation of Sales Contracts: Express Terms
A. Ease of Contract Formation 2.2
B. Open Terms 2.3
C. Formation Issues 2.4
D. Formation Problems Not Covered by Commercial Code 2.5
A. What Constitutes an Offer? 2.6
1. Form: Quotation 2.7
2. Form: Noncontractual Intent 2.8
B. Revocability and When “Firm” 2.9
1. Requirements of Firm Offer
a. Offer Made by Merchant 2.10
b. Assurance That Offer Will Be Held Open 2.11
c. Signed Writing 2.12
2. Form Supplied by Offeree 2.13
3. Period of Irrevocability 2.14
4. Limited Effect of Com C §2205 2.15
5. Firm Offer to Contractor 2.16
C. Drafting Considerations 2.17
1. Form: Revocable Offer 2.18
2. Form: Firm Offer for Specified Period 2.19
3. Form: Firm Offer Subject to Contingencies 2.20
4. Form: Firm Renewable Offer 2.21
5. Form: Firm Offer in Form Supplied by Offeree 2.22
6. Form: Firm Offer by Nonmerchant 2.23
A. When No Means or Manner Specified 2.24
B. Specifying Means or Manner of Acceptance 2.25
1. Form: Acceptance by Return of Form 2.26
2. Form: Acceptance by Performance 2.27
C. Notices of Acceptance
1. Code Requirement of Reasonable Time 2.28
2. Effect of Performance Alone 2.29
a. Form: Notice of Acceptance by Performance 2.30
b. Form: Offeror’s Waiver of Notice of Acceptance 2.31
c. Form: Notice That Offer Has Lapsed 2.32
D. Withdrawal of Acceptance 2.33
E. Failure in Transmission of Acceptance 2.34
F. Form: Requirement of Notice of Acceptance by Given Date 2.35
G. Prompt or Current Shipment: Acceptance by Promise or Performance
1. The Rule 2.36
2. Acceptance by Promise
a. The Rule 2.37
b. Form: Requirement of Acceptance by Promise to Ship 2.38
a. The Rule 2.39
b. Form: Requirement of Acceptance by Performance 2.40
4. What Is Prompt or Current? 2.41
H. Acceptance by Shipping Nonconforming Goods
1. Meaning of “Nonconforming” 2.42
2. Shipment of Nonconforming Goods May Be Acceptance and Breach 2.43
3. Notifying Buyer That Goods Are Shipped for Accommodation 2.44
4. Buyer’s Options on Receipt of Nonconforming Goods 2.45
5. Precluding Accommodation Shipments 2.46
a. Form: Precluding Accommodation Shipments 2.47
b. Form: Requirement of Seasonable Notification of Acceptance or Accommodation 2.48
c. Form: Notice of Intentional Accommodation Shipment 2.49
d. Form: Notice of Unintentional Accommodation Shipment 2.50
1. Introduction 2.50A
2. Electronic Signatures 2.50B
3. Consumer Protection Features 2.50C
4. Electronic Record Retention 2.50D
B. Uniform Electronic Transactions Act (UETA)
1. Overview 2.50E
2. Consent Under UETA 2.50F
C. Shrink-Wrap, Click-Wrap, and Browse-Wrap License Agreements and the Commercial Code
1. Is Transaction Covered by Division 2? 2.50G
2. Enforceability If Transaction Is a Sale 2.50H
3. Commercial Code Express and Implied Warranties Applied to Software 2.50I
1. State Law 2.51
2. Bankruptcy Auction Sales 2.51A
B. Separate Sales and Statute of Frauds 2.52
C. Formation of Auction Contract
1. The Bid and Its Acceptance 2.53
2. Last-Minute Bid 2.54
D. Auctions With and Without Reserve
1. Distinctions Between “With” and “Without” Reserve 2.55
2. Change in Nature of Auction Before Goods Are “Put Up” 2.56
3. Reasonable Time for Bid 2.57
E. Bids by Seller 2.58
F. Bidding Abuses 2.59
VII. SALES AGREEMENT CHECKLIST 2.60
Reid H. Everett
A. Tort Law and Warranty Law 3.1
B. Kinds of Warranties 3.2
C. Consumer Warranty Legislation
1. Overview 3.3
2. California Law 3.4
a. Scope 3.5
b. Contents of Written Warranties 3.6
c. Full and Limited Warranties 3.7
II. EXPRESS WARRANTIES
A. Made by Affirmation or Promise 3.8
1. Seller’s Intent to Warrant 3.9
2. Words of Warranty 3.10
3. Interpretation Issues 3.10A
4. Basis of Bargain; Buyer’s Reliance 3.11
5. Inspection of Goods 3.12
6. Distinguishing Warranty From Opinion 3.13
7. Seller Who Is Expert 3.14
8. Time of Warranting
a. Warranties Made Before Sale 3.15
b. Warranties Made After Sale 3.16
9. Duration of Warranty 3.17
10. Warranty by Remote Seller 3.18
B. Description of Goods as Creating Express Warranty 3.19
C. Sample or Model as Creating Express Warranty 3.20
1. Described 3.21
2. Only Merchants Warrant Merchantability 3.22
3. Meaning of “Merchantable”
a. Summary of Standard 3.23
b. Pass Without Objection in the Trade and Be of Fair Average Quality 3.24
c. Fit for Ordinary Purposes 3.25
d. Be of Even Kind, Quantity, and Quality 3.26
e. Adequately Contained, Packaged, and Labeled 3.27
f. Conform to Representations on Container or Label 3.28
4. Sales of Food or Drink 3.29
5. Sales of Livestock 3.30
6. Sales of Secondhand Goods 3.31
7. Effect of Buyer’s Inspection of Goods 3.32
B. Warranty of Fitness for Particular Purpose
1. Described 3.33
2. Who Warrants Fitness for Particular Purpose? 3.34
3. Elements of Warranty 3.35
a. Seller’s Knowledge of Buyer’s Purpose 3.36
b. Buyer’s Reliance on Seller’s Skill or Judgment 3.37
c. Seller’s Knowledge of Buyer’s Reliance 3.38
d. Seller’s Selecting or Furnishing of Goods 3.39
4. No “Trade Name” Limitation 3.40
C. Other Implied Warranties From Course of Dealing or Usage of Trade 3.41
A. Accompanies Any Sale of Goods 3.42
B. Breach of Warranty of Title 3.43
V. WARRANTY AGAINST INFRINGEMENT
A. Patent or Trademark Infringement 3.44
B. Copyright Infringement 3.45
1. Distinguished From Limiting Remedies 3.46
2. Strict Construction 3.47
3. Unconscionability 3.48
4. Postsale Disclaimers 3.49
B. Disclaiming Express Warranties
1. Reconciling Warranty and Disclaimer 3.50
2. Significance of Parol Evidence Rule 3.51
3. Effect of Merger Clause 3.52
C. Disclaiming Implied Warranties
1. Disclaiming Warranty of Merchantability 3.53
2. Conspicuousness Requirement 3.54
3. Disclaiming Warranty of Fitness 3.55
4. Disclaiming Implied Warranties by “As Is” and Similar Phrases 3.56
5. Excluding Warranties by Examination Before Sale 3.57
6. Excluding Warranties by Past Experience 3.58
7. Excluding Warranties by Providing Specifications 3.59
8. Excluding Implied Warranties in Sales of Consumer Goods 3.60
9. Excluding Implied Warranties in Sales of Pesticides 3.61
D. Disclaimer Forms
1. Form: Merchantability and Particular Purpose Warranties Disclaimed 3.62
2. Form: Sale of Goods “As Is” and “With All Faults” 3.63
3. Form: Examination Made or Refused 3.64
E. Disclaiming Warranty of Title
1. By Specific Language 3.65
2. Form: Warranty of Title Disclaimed 3.66
3. By Circumstances 3.67
F. Disclaiming Warranty Against Infringement 3.68
G. Form: Warranty Against Infringement Disclaimed 3.69
VII. CUMULATION AND CONFLICT OF WARRANTIES
A. Cumulation Favored 3.70
B. Resolving Inconsistent Warranties 3.71
C. Form: Description Displaces Sample 3.72
A. Notice of Breach of Warranty
1. Introduction 3.73
2. Importance of Tender of Delivery 3.74
3. Whom to Notify 3.75
4. When to Give Notice 3.76
5. Content of Notice 3.77
6. Additional Notice in Infringement Actions 3.78
7. Proof of Purchase Requirement 3.79
8. Form: Written Notice Required 3.80
9. Form: Notice of Breach of Warranty 3.81
10. Form: Notice of Infringement Suit 3.82
B. Vouching In
1. Background and Rule 3.83
2. Vouching In and Notice of Breach of Warranty 3.84
3. Effect of Judgment If Manufacturer Refuses to Defend 3.85
4. Infringement Actions and Vouching In 3.86
5. Form: Notice of Litigation; Requesting Defense 3.87
6. Form: Demand for Control of Infringement Action 3.88
IX. REMEDIES FOR BREACH OF WARRANTY
A. Overview 3.89
B. Consumer Warranty Legislation
1. Song-Beverly Consumer Warranty Act 3.90
2. Magnuson-Moss Warranty Act 3.91
1. Remedy Limitation Provisions Distinguished From Disclaimers and Warranties 3.92
2. Cumulative or Exclusive Remedies 3.93
3. Repair or Replacement Provisions and Failure of Essential Purpose 3.94
4. Form: Remedy Limitation 3.95
5. Strict Construction of Limitation Provisions 3.96
6. Conspicuousness 3.97
7. Remedy Limitations and Consumer Warranty Legislation 3.98
1. Overview 3.99
2. Exceptions to Applicability of Commercial Code Limitations Period 3.100
3. Conflict of Law; Variations in Limitation Periods 3.101
B. Accrual and Tolling
1. General Rule 3.102
2. Future Performance 3.103
3. Breach of Warranty Against Infringement 3.104
XI. PLEADINGS AND JURY INSTRUCTIONS
A. Allegations in Complaints
1. Summary 3.105
2. Form: Allegation of Express Warranty by Affirmation 3.106
3. Form: Allegation of Express Warranty by Description 3.107
4. Form: Allegation of Express Warranty by Sample or Model 3.108
5. Form: Allegation of Implied Warranty of Merchantability 3.109
6. Form: Allegation of Implied Warranty of Fitness for Particular Purpose 3.110
7. Form: Allegation of Noncompliance With Warranty 3.111
8. Form: Allegation of Notice of Breach 3.112
9. Form: Allegation That Notice of Litigation Was Given 3.113
10. Form: Allegation of Warranty of Title 3.114
11. Form: Allegation of Lack of Title 3.115
12. Form: Allegation of Disturbance of Quiet Possession 3.116
13. Form: Allegation of Damages 3.117
14. Form: Allegation of Incidental and Consequential Damages 3.118
B. Allegations in Answers; Defenses
1. Introduction 3.119
2. Form: Allegation of Exclusion or Disclaimer 3.120
3. Lack of Privity 3.121
4. Form: Allegation of Lack of Privity 3.122
5. Form: Allegation of Examination or Refusal to Examine 3.123
6. Form: Allegation of Exclusion or Modification by Past Experience 3.124
C. Jury Instructions 3.125
XII. SAMPLE WARRANTY FORM 3.126
Formation of Sales Contracts: Open or Indefinite Terms
I. INTRODUCTION; SCOPE OF CHAPTER 4.1
II. OPEN TERM PROVISIONS
A. Effect of Indefiniteness on Sales Contract 4.2
B. Open Price Contracts
1. Overview 4.3
2. Contracts Silent About Price 4.4
3. Contracts Leaving Price to Be Agreed
a. Agreements to Agree 4.5
b. Form: Agreement to Agree on Price 4.6
c. Form: Agreement to Agree (Maximum and Minimum Price) 4.7
4. Independent Price-Fixing Standards
a. Permissible Price 4.8
b. Form: Open Price Tied to Market Price 4.9
c. Form: Price Keyed to Published Index 4.10
d. Form: Price Adjusted to Seller’s Competitors’ Prices 4.11
e. Form: Appraiser or Arbitrator to Set Price 4.12
5. Price Set by Seller or Buyer
a. Good Faith Requirement 4.13
b. Form: Same Price as Given Others 4.14
c. Form: Price Fixed in Bad Faith 4.15
d. Price Dependent on Cost 4.16
e. Form: Price Dependent on Resale 4.17
f. Form: Price Set at Discretion of Contract Party 4.18
g. Form: Price Increased at Discretion of Seller 4.19
6. Form: No Sale If Price Not Set 4.20
1. Introduction 4.21
a. Overview 4.22
b. Validity of Requirements Contracts 4.23
c. Changes in Requirements 4.24
(1) Actual Good Faith Requirements 4.25
(a) Increased Requirements 4.26
(b) Decreased and Disappearing Requirements 4.27
(2) “Unreasonably Disproportionate” Limitation 4.28
(3) Basis of Comparison in Contracts Without Stated Estimates 4.29
(4) Stated Maximum or Minimum and Other Limitations 4.30
d. Breach 4.31
e. Requirements Contract Provisions
(1) Form: Description of Requirements 4.32
(2) Form: Recital for New Business 4.33
(3) Form: Stated Estimate 4.34
(4) Form: Maximum Quantity 4.35
(5) Form: Variable Maximum Quantity 4.36
(6) Form: Variable Minimum Quantity 4.37
(7) Other Provisions 4.38
3. Output Contracts
a. Overview 4.39
b. Validity 4.40
c. Actual Good Faith Output; Decreasing and Disappearing Output 4.41
d. Unreasonably Disproportionate Output 4.42
e. Breach 4.43
f. Output Contract Provisions
(1) Overview 4.44
(2) Form: Description of Output Subject to Contract 4.45
(3) Form: Maximum Quantity 4.46
(4) Form: Minimum Quantity 4.47
a. Overview 4.48
(1) Antitrust Considerations 4.49
(2) Mutuality of Obligation 4.50
c. Performance: Best Efforts and Good Faith 4.51
(1) Form: Definition of “Best Efforts” (Buyer’s and Seller’s Protection) 4.52
(2) Exclusive Dealing Distinguished From Requirements and Output Contracts 4.53
(3) Form: Nonexclusive Supply by Seller 4.54
e. Other Drafting Issues 4.55
D. Open Delivery Terms
1. Number of Deliveries 4.56
a. Form: Single Delivery 4.57
b. Form: Delivery in Lots 4.58
a. Applicable Rules 4.59
(1) Form: Place of Delivery 4.60
(2) Form: Delivery of Goods in Possession of Third Party 4.61
4. Time for Delivery or Related Performance
a. Applicable Rules 4.62
(1) Reasonable Notification of Proposed Time Limit 4.63
(2) Failure to Reply as Acquiescence 4.64
(3) Tacit Extension of Time; Abandonment 4.65
(4) Unreasonably Early Offer or Demand 4.66
(5) Establishing Breach 4.67
(1) Form: Time for Delivery 4.68
(2) Form: Notification of Proposed Time Limit 4.69
(3) Form: Objection to Proposed Time Limit; Counterproposal 4.70
E. Open Payment
1. Delivery Not by Documents 4.71
2. Delivery by Documents of Title 4.72
3. Shipments Under Reservation 4.73
4. Delivery in Lots 4.74
5. Agreement About Other Payment Terms 4.75
6. Payment on Credit 4.76
a. Form: Time for Payment 4.77
b. Form: Right of Inspection Reserved by Buyer 4.78
F. Open Duration
1. Contract Valid for Reasonable Time 4.79
2. Form: Duration of Contract 4.80
3. Power to Terminate 4.81
4. Form: Power to Terminate 4.82
5. Notice of Termination 4.83
6. Automatic Termination on Occurrence of Agreed Event 4.84
7. Form: Automatic Termination 4.85
G. Particulars of Performance Left to One Party
1. Overview 4.86
2. Quantity 4.87
3. Assortment 4.88
4. Shipping Arrangements 4.89
5. Failure to Specify Particulars or to Cooperate 4.90
a. Responses to Noncooperating Party 4.91
b. Exception for Commercial Impracticability 4.92
6. Form: Procedure for Specification of Particulars of Contract Provisions 4.93
III. COURSE OF PERFORMANCE, COURSE OF DEALING, AND USAGE OF TRADE
A. General Principles 4.94
B. Course of Performance
1. Effect on Contract 4.95
a. Form: Exclusion of Course of Performance 4.96
b. Form: Sample Seller’s Notice of Objection to Buyer’s Course of Performance 4.97
C. Course of Dealing
1. Effect on Contract 4.98
2. Form: Incorporation or Exclusion of Course of Dealing 4.99
1. Effect on Contract 4.100
2. Scope of Application 4.101
a. Form: Usages of Trade Expressly Incorporated by Reference 4.102
b. Form: Usage of Trade Excluded or Limited 4.103
4. Priority of Sources for Unexpressed Terms 4.104
I. CHANGING TERMS IN ACCEPTANCE OR CONFIRMATION OF OFFER 5.1
II. CONTRACT FORMATION WHEN OFFER AND ACCEPTANCE VARY 5.2
A. Does a Contract Exist? 5.3
B. Offeree Does Not Condition Acceptance on Assent to Offeree’s Terms
1. Statutory Requirements: Definite and Seasonable Expression 5.4
2. Form of Expression of Acceptance 5.5
3. Statute of Frauds Requirements 5.6
4. Specifying Acceptable Form of Expression of Acceptance 5.7
C. Offeree Conditions Acceptance on Assent to Offeree’s Terms 5.8
1. Form: Acceptance Conditional on Assent to Changes 5.9
2. Offeror’s Assent to Offeree’s Terms 5.10
III. TERMS OF CONTRACTS FORMED BY VARYING OFFER AND ACCEPTANCE 5.11
A. Contracts Not Between Merchants 5.12
B. Contracts Between Merchants 5.13
1. Limiting Acceptance to Terms of Offer
a. The Rule 5.14
b. Form: Acceptance Expressly Limited to Offer’s Terms 5.15
2. Material Alterations 5.16
a. Terms That Materially Alter 5.17
b. Terms That Do Not Materially Alter 5.18
3. Notification of Objection to Offeree’s Terms 5.19
a. Previous Notification of Objection 5.20
b. Notification After Learning of Offeree’s Terms 5.21
c. Form: Objection to All Proposed Terms 5.22
d. Form: Objection to Only Some Proposed Terms 5.23
IV. TERMS OF CONTRACTS FORMED BY CONDUCT 5.24
V. APPLICATION OF COMMERCIAL CODE PRINCIPLES TO NON-GOODS SITUATIONS 5.25
I. CHANGING TERMS IN CONTRACT 6.1
II. MODIFICATION OF SALES CONTRACTS
A. Requirements for Effective Modification 6.2
1. Good Faith 6.3
2. Application of Statute of Frauds 6.4
3. “No-Oral-Modification” Clause 6.5
B. Modification Forms
1. Form: Prohibition of Oral Modification or Rescission 6.6
2. Form: Modification Increasing Contract Price 6.7
C. Objections to Modification 6.8
A. Definitions and Distinctions 6.9
B. Requirements of Rescission 6.10
C. Form: Rescission of Written Contract 6.11
A. Requirements for Effective Waiver 6.12
B. Contractual Clauses Limiting Waiver 6.13
1. Form: Prohibition of Oral Waiver 6.14
2. Form: Limitation on Application of Waiver 6.15
3. Form: Express Waiver 6.16
C. Waiver Resulting From Ineffective Modification or Rescission 6.17
D. Waiver by Conduct 6.18
E. Retraction of Waiver
1. Ability to Retract Waiver 6.19
2. Reasonable Notification Received 6.20
3. Retraction Forbidden Because Unjust 6.21
4. Form: Retraction of Waiver Allowing Substitution of Goods 6.22
Marcia B. Wilbur
1. Overview; Purpose 7.1
2. Parol Evidence Rule Distinguished 7.2
3. Criticism of Statute 7.3
4. International Sales 7.4
B. Transactions Within Statute
1. Contract for Sale of Goods
a. Contract for Sale 7.5
b. Goods 7.6
c. Price of $500 or More 7.7
2. Sale or Return Transaction 7.8
3. Contract Modifications 7.9
C. Requirement of Writing
1. Form of Writing 7.10
a. Minimum Terms 7.11
b. Quantity Term 7.12
c. Incorrect Statement of Terms 7.13
a. Manner 7.14
b. Agent’s Signature; Equal Dignities Rule 7.15
D. Effect of Compliance or Noncompliance With Statute of Frauds 7.16
E. Exceptions to Statute
1. Merchant’s Failure to Object to Written Confirmation
a. Requirements Applicable to Confirmation 7.17
b. Notice of Objection 7.18
2. Specially Manufactured Goods 7.19
3. Goods Paid for or Received
a. All Goods Received and Accepted 7.20
b. Entire Price Paid and Accepted 7.21
c. Limited Effect of Partial Performance 7.22
d. Partial Acceptance of Commercial Unit 7.23
e. Allocation of Goods to Partial Payment 7.24
f. Installment and Dealership Contracts 7.25
4. Admissions in Court 7.26
5. Estoppel and Waiver 7.27
F. Other Statutes of Frauds
a. Sale of Personal Property Not Goods [Deleted] 7.28
b. Grant of Security Interest in Goods 7.29
c. Sale of Investment Securities 7.30
2. Civil Code 7.31
A. Introduction 7.32
1. Overview 7.33
2. Limited to Evidence Affecting Terms in Final Writing
a. Terms 7.34
b. Writing 7.35
c. Final Expression 7.36
3. Exceptions to Parol Evidence Rule 7.37
C. Inadmissibility of Evidence of Contradictory Terms
1. Overview 7.38
2. Sale or Return Contracts 7.39
3. Admissibility When Contract Is Silent 7.40
D. Admissibility of Evidence to Explain Meaning of Terms
1. Overview 7.41
2. Admissibility of Course of Performance, Course of Dealing, and Usage of Trade to Explain Express Terms 7.42
3. Admissibility to Explain Terms Defined by Commercial Code 7.43
E. Admissibility of Evidence to Supplement Terms of Writing
1. Overview 7.44
2. Admissibility of Consistent Terms
a. Consistency 7.45
b. Examples 7.46
3. Inadmissibility When Agreement Is Complete and Exclusive
a. Generally 7.47
b. Inapplicability to Course of Performance, Course of Dealing, and Usage of Trade 7.48
c. Merger Clauses 7.49
d. Special Problems With Warranty Disclaimers 7.50
1. Checklist for Introduction of Evidence 7.51
2. Burden of Proof 7.52
3. Failure to Object at Trial 7.53
G. Form: Merger Clauses 7.54
I. SCOPE OF CHAPTER; APPLICABILITY OF RULES 8.1
A. Overview of Rules for Passage of Title 8.2
B. Delivery Requiring Movement of Goods 8.3
1. Shipment Contracts
a. Title Passage on Shipment 8.4
b. Seller’s Duties Under Shipment Contract 8.5
c. F.O.B. Place of Shipment 8.6
d. F.O.B. Carrier 8.7
e. F.A.S. Vessel 8.8
f. C.I.F. and C. & F. 8.9
a. Title Passage on Tender 8.10
b. F.O.B. Destination 8.11
c. Ex Ship 8.12
d. No Arrival, No Sale 8.13
C. Delivery Without Movement of Goods
1. General Rules 8.14
2. Delivery With Documents of Title 8.15
3. Delivery Without Documents of Title 8.16
D. Auction Sale 8.17
E. Rejection of Goods or Revocation of Acceptance
1. Revesting Title in Seller 8.18
2. Effect of Nonconformity on Passage of Title 8.19
F. Other Code Sections Dealing With Passage of Title 8.20
G. Seller’s Security Interest and Title
1. Effect of Reservation of Title 8.21
2. Form: Reservation of Title 8.22
3. Perfection of Security Interest Not Necessary 8.23
4. Purchase Money Security Interest 8.24
H. Control of Title for Nonsales Purposes 8.25
III. COMPARISON OF TITLE AND RISK OF LOSS
A. Table: Passage of Title and Passage of Risk of Loss 8.26
B. Table: Effect of Breach on Title and Risk of Loss 8.27
A. Overview 8.28
B. Rules Governing Identification 8.29
C. Insurable Interests of Buyer and Seller 8.30
D. Buyer’s “Special Property” 8.31
I. APPLICABLE LAW 9.1
II. OBLIGATIONS OF PARTIES 9.2
III. DUTY TO SHIP
A. Shipment and Destination Contracts
1. Definitions and Distinctions 9.3
2. Effect of Freight or C.O.D. Term 9.4
B. Seller’s Obligation Under Shipment Contract
1. Introduction 9.5
2. Proper Contract of Carriage 9.6
3. Delivery of Documents 9.7
4. Notice of Shipment 9.8
5. Effect of Failure to Ship Properly 9.9
C. Shipments Under Reservation
1. Seller’s Security Interest 9.10
2. Order Bills of Lading 9.11
3. Nonnegotiable Bills of Lading and C.O.D. 9.12
4. Documentary Sales and Buyer’s Inspection 9.13
5. Unauthorized Reservation Shipments 9.14
D. Mercantile Shipment Terms
1. Introduction 9.15
2. Table: Allocation of Responsibilities Under Mercantile Shipment Terms 9.16
a. Price Term and Delivery Term 9.17
b. F.O.B. Place of Shipment 9.18
c. F.O.B. Place of Destination 9.19
d. F.O.B. Carrier 9.20
e. F.O.B. Vessel
(1) Duties of Seller and Buyer 9.21
(2) Form and Number of Bills of Lading 9.22
f. F.O.B. Intermediate Point 9.23
g. Matters Not Covered by F.O.B. Term 9.24
4. F.A.S. Vessel 9.25
a. Meaning of Term 9.26
b. Expense and Risk of Loss 9.27
c. Obtaining Bill of Lading 9.28
d. Payment or Provision for Freight 9.29
e. Procurement of Insurance
(1) Kind, Amount, and Beneficiary 9.30
(2) Risks Required to Be Covered 9.31
(3) Insuring Freight Charges 9.32
(4) Consequences of Failure to Insure 9.33
f. Importance of Commercial Invoice 9.34
g. Procurement and Forwarding of Documents 9.35
h. Payment of Various Charges 9.36
6. C.F. & I., C. & F., C.F., and C.A.F. 9.37
7. Other C.I.F. Variants 9.38
8. Ex Ship or D.E.S. 9.39
9. Ex Factory and Similar Terms 9.40
10. No Arrival, No Sale
a. In General 9.41
b. To Arrive 9.42
c. Incompatibility With C.I.F. Term 9.43
IV. TENDER OF DELIVERY
A. Introduction 9.44
B. Manner of Tender
1. General Rule 9.45
2. Delivery Without Movement of Goods Held by Third Party 9.46
3. Interparty Delivery Without Movement of Goods 9.47
4. Delivery Under Destination Contract 9.48
C. Effect of Proper Tender 9.49
D. Excuse of Tender 9.50
V. “PERFECT TENDER” REQUIREMENT
A. “Perfect Tender” Rule 9.51
B. Exceptions to “Perfect Tender” Rule 9.52
1. Installment Contracts: Substantial Performance
a. Introduction 9.53
b. Definition of Installment Contract 9.54
c. Buyer’s Grounds for Canceling Whole Contract 9.55
d. Rejection of Installment 9.56
e. Meaning of Substantial Impairment 9.57
f. Reinstatement 9.58
2. Other Sales Contracts
a. Contractual Limitation of Buyer’s Remedy 9.59
b. Buyer’s Good Faith 9.60
c. Buyer’s Right to Revoke Acceptance 9.61
d. Cure by Seller 9.62
(1) Cure Within Contract Period 9.63
(2) Surprise and Unfair Rejection
(a) Right to Cure 9.64
(b) Time to Cure 9.65
(c) Eliminating Right to Cure by Contract 9.66
(3) Manner of Cure 9.67
e. Material Loss or Delay From Shipping Arrangements 9.68
f. Substitute Delivery 9.69
g. Federal Exception for Perishable Agricultural Commodities 9.70
VI. DOCUMENTARY TRANSACTIONS
A. Tender and Delivery of Documents 9.71
B. “Perfect Tender”
1. General Rule 9.72
2. Applicability of Commercial Code Exceptions
a. Installment Contracts 9.73
b. Right to Revoke Acceptance 9.74
c. Cure 9.75
d. Nonconformity in Shipping Documents 9.76
e. Substitute Delivery 9.77
I. BUYER’S DUTY 10.1
II. RECEIPT 10.2
III. INSPECTION 10.3
A. Right to Inspect 10.4
B. Time to Inspect
1. When Right Arises 10.5
2. Duration of Right 10.6
3. Hour of Inspection 10.7
4. Effect of Payment, Acceptance, or Rejection on Right to Inspect 10.8
C. Place and Manner of Inspection
1. Reasonable Place and Manner of Inspection 10.9
2. Exclusive Place or Manner of Inspection 10.10
3. Form: Place or Manner of Inspection 10.11
D. Expenses of Inspection 10.12
E. Inspection in C.O.D. and Documentary Transactions
1. General Rule 10.13
2. Exceptions Permitting Inspection Before Payment 10.14
3. Inspection Under Certain C.I.F. Contracts 10.15
F. Inspection in Special Situations 10.16
1. Casualty to Identified Goods 10.17
2. Inspection to Preserve Evidence of Goods in Dispute 10.18
IV. ACCEPTANCE 10.19
A. Whole or Partial Acceptance 10.20
B. What Constitutes Acceptance?
1. Basic Rule 10.21
a. Acceptance by Affirmative Action 10.22
b. Acceptance by Inaction 10.23
c. Acceptance by Acts Inconsistent With Seller’s Ownership 10.24
2. Sale on Approval and Sale or Return Contracts
a. Sale on Approval 10.25
(1) Form: Contract Provision Requiring Notification of Return 10.26
(2) Form: Notice of Election to Return Goods 10.27
b. Sale or Return Contracts 10.28
a. Effect of Acceptance on Payment Obligation 10.29
b. Effect of Acceptance on Right to Reject Goods 10.30
c. Effect of Acceptance on Right to Damages 10.31
a. Grounds for Revocation of Acceptance 10.32
b. Time Limit for Revocation of Acceptance 10.33
c. Effect of Revocation of Acceptance 10.34
A. Buyer’s Right to Reject
1. Time and Manner of Rejection 10.35
2. Form: Time and Manner of Rejection 10.36
B. Eliminating Right to Reject by Contract 10.37
C. Specification of Defects 10.38
1. Curable Defects 10.39
2. Seller’s Demand for Specification 10.40
3. Unstated Defects in Documentary Transactions 10.41
4. Form: Statement of Defects 10.42
5. Form: Request for Full and Final Statement of Defects 10.43
D. Buyer’s Rights and Duties After Rejection
1. Introduction 10.44
2. Security Interest for Expenditures 10.45
3. Buyer’s Duty to Hold Goods 10.46
4. Disposition of Goods by Merchant Buyer 10.47
E. Salvage 10.48
F. Right to Use Goods After Rejection 10.49
1. Title After Rejection 10.50
2. Sale on Approval and Sale or Return Contracts 10.51
VI. PAYMENT 10.52
A. Tender of Payment
1. Tender of Payment as Condition to Seller’s Obligations 10.53
2. Manner of Tendering Payment 10.54
3. Agreement on Method of Payment 10.55
B. Payment Before Inspection
1. When Required 10.56
2. Effect on Buyer’s Right to Inspect 10.57
3. Refusal to Pay for Obviously Nonconforming Goods 10.58
C. Payment by Various Means
a. Sufficiency of Tender 10.59
b. Payment by Subsequently Dishonored Check 10.60
2. Payment by Letter of Credit 10.61
3. Payment by Credit Card 10.62
4. Barter Transactions 10.63
5. Payment in Realty 10.64
6. Payment in Foreign Currency 10.65
7. Failure of Means of Payment Because of Government Regulation 10.66
D. Effect of Payment and Nonpayment
1. Effect on Rights in Goods 10.67
2. Effect on Seller’s Performance 10.68
3. Effect on Buyer’s Remedies 10.69
E. Payment Under Installment Contracts
1. Defaulted Payments 10.70
2. Late Payments 10.71
A. Assignment and Delegation 11.1
B. Financing Assignments Governed by Division 9 11.2
C. Novation 11.3
D. Limited Scope of Com C §2210 11.4
II. ASSIGNMENT OF RIGHTS
A. Principles of Assignment 11.5
B. Scope of Assignment 11.6
1. Form: Assignment of Rights Excluding Delegation of Duties 11.7
2. Form: Consent to Assignment of Rights 11.8
C. Effect of Assignment on Parties 11.9
D. Assignment Prohibited by Parties’ Mutual Agreement
1. Narrow Construction of Contractual Prohibition 11.10
2. Limitation on Power to Restrict Assignment 11.11
3. Form: Prohibition of Assignment of Rights 11.12
4. Form: Assignment Expressly Permitted 11.13
E. Assignment Prohibited Due to Adverse Effect on Nonassigning Party 11.14
F. Waiver of Prohibition on Assignment 11.15
A. Principles of Delegation 11.16
B. Delegation Implied by Assignment 11.17
C. Form: Express Delegation of Performance 11.18
D. Effect of Delegation 11.19
1. Between Nondelegating Party and Assignee 11.20
2. Between Nondelegating Party and Assignor 11.21
3. Between Assignor and Assignee 11.22
E. Delegation Prohibited by Parties’ Mutual Agreement 11.23
1. Form: Prohibition of Delegation of Duties 11.24
2. Form: Delegation Expressly Permitted 11.25
F. Delegation Prohibited by Commercial Code 11.26
G. Waiver of Prohibition Against Delegation 11.27
Helen Milowe
II. BUYERS AND THIRD PARTIES
A. Rules Concerning Buyers’ Rights 12.2
1. When Good Title Is Obtained From Seller 12.3
a. Void Title for Stolen Goods 12.4
b. Good Title Requires Voluntary Transfer by Owner 12.5
2. Seller With Voidable Title 12.6
a. Seller Deceived About Transferee’s Identity 12.7
b. Delivery in Exchange for Dishonored Check 12.8
c. Cash Sale 12.9
d. Delivery Procured by Fraud 12.10
3. Goods Entrusted to Merchant 12.11
a. Definition of Entrusting 12.12
b. Entrusting Must Be for Sale Purposes 12.13
c. Party to Whom Goods Are Entrusted Must Be Merchant 12.14
4. Seller With Apparent Ownership or Authority to Sell 12.15
B. Good Faith Purchaser for Value 12.16
1. Good Faith 12.17
2. Purchaser 12.18
3. For Value 12.19
C. Buyer in Ordinary Course of Business 12.20
1. Definition of “Buyer in Ordinary Course” 12.21
a. Good Faith Buyer 12.22
b. Sale in Ordinary Course of Business 12.23
c. Merchant Seller 12.24
d. New Value Given 12.25
2. When “Buyer in Ordinary Course” Status Attaches 12.26
3. Transactions Under PACA 12.26A
D. Rights of Buyers in Bulk Transfers 12.27
III. RIGHTS OF SELLER’S CREDITORS
A. Creditors’ Rights Against Buyers 12.28
B. Retention of Possession by Seller 12.29
1. Fraudulent Retention Rule/Conveyance Without Delivery 12.30
a. Immediate Delivery 12.31
b. Actual and Continued Change of Possession 12.32
2. Exceptions to Fraudulent Retention Rule
a. Retention by Merchant in Current Course of Trade 12.33
b. Filing and Publication 12.34
c. Sale-Leaseback by Seller 12.35
d. Other Exceptions to Fraudulent Retention Rule 12.36
C. Voidable Transfers of Goods 12.37
1. Definition of Voidable Transfer 12.38
2. Remedies of Creditors 12.39
a. Attachment 12.40
b. Execution 12.41
c. Assignment 12.42
3. Rights of Transferees 12.43
a. Good Faith Transferees 12.44
b. Amount of Judgment Limited 12.45
c. Other Rights Retained by Good Faith Transferees 12.46
4. Statute of Limitations 12.46A
D. Insolvent Seller 12.47
1. Secured Creditors 12.48
2. Trustee in Bankruptcy 12.49
a. Avoidable Preferences 12.50
b. Nonpreferential Transfers 12.51
IV. RIGHTS OF BUYER’S CREDITORS
A. Creditors’ Rights Against Sellers 12.52
B. Sale on Approval and Sale or Return Contracts 12.53
1. Sale on Approval 12.54
2. Sale or Return 12.55
C. Consignment Contracts 12.56
1. Definition of Consignment 12.57
a. Goods Must Be Delivered for Sale 12.58
b. Delivery of Goods Not Consignment If Merchant Not Generally Known to Sell Goods of Others 12.59
c. Consumer Goods Excluded 12.60
2. Protecting Consignor’s Interest in Consigned Goods By Filing and Sending Notification 12.61
a. Effect of Financing Statement 12.62
b. Requirements for Authenticated Notification 12.63
3. Consignor’s Rights in Consignee’s Bankruptcy 12.64
a. Effect of Automatic Stay 12.65
b. Avoidance of Consignor’s Interest 12.66
D. Seller’s Right to Reclaim Goods From Insolvent Buyer 12.67
V. RIGHTS OF FINANCING AGENCY OR PERSON IN POSITION OF SELLER
A. Financing Agency 12.68
1. Definition of “Financing Agency” 12.69
2. Rights With Respect to Goods 12.70
3. Contractual Rights 12.71
B. Person in Position of Seller 12.72
I. USES OF LETTERS OF CREDIT GENERALLY
B. General Characteristics and Requirements 13.2
C. Terminology 13.3
A. Uniform Customs 13.4
B. Commercial Code
1. Scope 13.5
2. Role of Custom and Practice 13.6
3. Variance by Agreement 13.7
4. Key Definitions 13.8
C. Other Sources of Law 13.9
III. CREATION OF LETTER OF CREDIT
A. Parties to Letter of Credit Transaction 13.10
B. Application for Letter of Credit 13.11
C. Consideration and Issuance 13.12
D. Advice of Credit and Confirmation 13.13
E. Duration of Credit 13.14
F. Modification and Revocation of Credit 13.15
G. Form: Sample Letter of Credit 13.16
IV. OPERATION OF LETTER OF CREDIT
A. Issuing Bank’s Obligations
1. Duty to Honor Presentation Independent of Transaction 13.17
2. Remedies for Wrongful Dishonor 13.18
3. Choice of Law 13.19
B. Issuer’s Rights and Duties in Honoring Drafts 13.20
C. Beneficiary’s Rights and Obligations: Warranties on Transfer or Presentment 13.21
1. Jurisdiction Over Foreign Issuer 13.21A
2. Jurisdiction Over Foreign Beneficiary 13.22
E. Duties of Advising Bank 13.23
F. Standard Practices Followed 13.24
G. Transfer and Assignment of Credit; Security Interests in the Credit 13.25
H. Remedies of Beneficiary or Other Claimant 13.26
V. EXPANSION OF LETTER OF CREDIT DEVICE 13.27
I. CALIFORNIA BULK SALES LEGISLATION 14.1
II. TRANSACTIONS SUBJECT TO LAW 14.2
A. Location of Seller 14.3
B. Type of Business 14.4
C. Type and Amount of Transfer 14.5
D. Type of Property 14.6
III. EXEMPTED SALES
A. Value of Assets Test 14.7
B. Creation of Security Interests 14.8
C. Assignment for Benefit of Creditors 14.9
D. Settlement of Lien or Security Interest 14.10
E. Sale of Encumbered Asset 14.11
F. Sale by Court-Appointed and Public Officers 14.12
G. Sales in Corporate Dissolution and Reorganization Proceedings 14.13
H. Transfers of Goods in Warehouse 14.14
I. Sale and Leaseback 14.15
J. Transfer of Alcoholic Beverage License 14.16
K. Sale of Business in Which Buyer Agrees to Pay Seller’s Debts 14.17
1. Buyer Assumes Debts to Known Claimants
a. Requirements 14.18
b. Form: Notice for Exemption When Buyer Assumes Debts to Known Claimants 14.19
2. Buyer Assumes All Debts
a. Requirements 14.20
b. Form: Notice for Exemption When Buyer Assumes All Debts 14.21
3. Sale to Newly Formed Organization That Will Continue Business 14.22
L. Sales Pursuant to Statute 14.23
IV. MANNER OF COMPLIANCE
A. Buyer’s Obligations 14.24
B. Transfers Not by Auction Sale
a. Recordation and Publication of Notice 14.25
b. Contents of Notice 14.26
c. Form: Notice for Transfers Not by Auction or Liquidation Sale 14.27
2. Payment of Transferor’s Creditors’ Claims 14.28
3. Disputed Claims Procedure 14.29
4. Insufficient Funds to Pay All Claims Filed With Escrow Agent 14.30
5. Order of Priorities for Distribution of Consideration 14.31
C. Auction Sales and Sales by Liquidator
1. Notice Requirements 14.32
2. Form: Notice of Intended Bulk Sale by Public Auction 14.33
3. Form: Notice of Intended Bulk Transfer by Liquidator on Seller’s Behalf 14.34
D. Rights of Creditors in Event of Compliance 14.35
1. Liability for Failure to Comply 14.36
2. Buyer’s Good Faith Defense 14.37
3. Limitation on Cumulative Liability 14.38
4. Remedies Available to Trustee in Bankruptcy 14.39
5. Statute of Limitations and Levies 14.40
F. Compliance With Other Laws Not Excused 14.41
V. SOME ASPECTS OF CALIFORNIA LAW COMPARED WITH 1988 UCC OFFICIAL TEXT 14.42
A. Scope of Coverage 14.43
B. Exemptions 14.44
C. Schedule of Distribution 14.45
D. Notice to Claimants 14.46
E. Good Faith Belief 14.47
A. Commercial Use of Documents of Title 15.1
B. Organization and Terminology of Division 7
1. Organization 15.2
2. Terminology 15.3
C. Subordination of Division 7 to Federal and State Laws and Regulations 15.4
II. CREATION OF DOCUMENTS OF TITLE
A. Issuer 15.5
B. Terms of Document 15.6
1. Required Terms 15.7
2. Permitted Terms 15.8
3. Void Terms; Conversion by Bailee 15.9
4. Provisions on Description of Goods 15.10
5. Negotiability 15.11
6. Electronic Documents of Title 15.11A
7. Substitution of Tangible and Electronic Documents of Title 15.11B
C. Multiple Documents
1. In General 15.12
2. Duplication of Documents 15.13
3. Bills in a Set 15.14
4. Overissue of Documents for Fungible Goods 15.15
5. Lost, Stolen, or Destroyed Documents 15.16
D. Alteration of Documents 15.17
E. Reducing Risk to Clients 15.18
F. Checklist of Possible Problems on Issuance of Document of Title 15.19
III. FORMS OF DOCUMENTS OF TITLE; TRANSFER AND NEGOTIATION
A. Types and Forms 15.20
B. Transfer of Interest in Goods Subject to Negotiable Document of Title
1. Due Negotiation 15.21
2. Rights of Transferee in Duly Negotiated Document 15.22
3. Limitation on Transferee of Duly Negotiated Document 15.23
C. Transfer of Document Not Qualifying as Due Negotiation 15.24
D. Transfer of Interest in Goods Subject to Nonnegotiable Document of Title 15.25
E. Warranties of Transferor, Intermediary, and Indorser
1. Transferor’s Warranties 15.26
2. Intermediary’s Warranties 15.27
3. Indorser’s Warranties 15.28
IV. DOCUMENTS USED AS SECURITY DEVICES 15.29
A. Security Interest Created to Borrow Money 15.30
B. Seller Retains a Secured Interest 15.31
1. Bill of Lading to Seller’s Order 15.32
2. Bill of Lading to Financing Agency’s Order 15.33
3. Bill of Lading to Buyer’s Order 15.34
4. Bill of Lading to Seller (Straight Bill) 15.35
5. Straight Bill of Lading to Seller’s Nominee 15.36
6. Bill of Lading to Buyer 15.37
V. RIGHTS OF BAILEE
A. Collection of Charges; Bailee’s Lien 15.38
1. Extent of Bailee’s Lien; Warehouse’s Lien 15.39
2. Carrier’s Lien 15.39A
3. Operation of Lien 15.40
4. Loss of Lien 15.41
5. Enforcement of Lien 15.42
a. Sale of Goods Stored by Merchant 15.43
b. Sale of Other Goods
(1) Notification Requirements 15.44
(2) Advertising Requirements 15.45
(3) Sale Requirements 15.46
c. Provisions Common to Both Enforcement Procedures 15.47
6. Other Remedies Against Bailor 15.48
7. Remedies Against Consignee-Consignor or Beneficial Owner of Goods 15.49
B. Termination of Storage at Warehouse’s Option
1. General Right of Termination 15.50
2. Summary Termination: Value Deteriorated to Less Than Lien 15.51
3. Summary Termination: Hazard to Other Goods Stored 15.52
4. Form: Notice to Merchant of Private Sale 15.53
5. Form: Suggested Notice of Intent to Sell Goods at Public Auction 15.54
VI. REMEDIES ON LOSS, DAMAGE, MISDELIVERY, OR DELAY OF GOODS
A. Introduction 15.55
B. Bailee’s Duty of Care 15.56
C. Bailee’s Duty to Deliver 15.57
1. Delivery to Rightful Person 15.58
2. Destruction by Fire 15.59
3. Routing Problems 15.60
D. Value Limitations 15.61
E. Time Limitations on Claims 15.62
F. Checklist: Considering Claims Against Bailee 15.63
G. Aids for Reducing Issues and Settling Dispute 15.64
1. Independent Appraisal of Goods 15.65
2. Stipulations 15.66
H. Suggested Pleadings 15.67
1. Form: Pleading Allegations as to Breach of Duty by Carrier Resulting in Loss or Damage to Goods 15.68
2. Form: Pleading Allegations as to Complaint Against Warehouse for Failure to Follow Lien-Enforcement Procedures 15.69
3. Form: Allegations: Answer Raising Defense of Agreed Value 15.70
4. Form: Allegations: Defense of Late Filing of Claim 15.71
5. Form: Allegations: Answer Raising Defense of Exclusion From Liability 15.72
6. Form: Allegation: Defense of Valid Enforcement of Lien 15.73
I. Suggested Aids in Settlement
1. In General 15.74
2. Form: Authorization to Sell 15.75
3. Protective Measures by Bailor 15.76
VII. INTERVENING RIGHTS OF THIRD PARTIES 15.77
A. Personal Disputes 15.78
B. Attaching or Executing Creditor 15.79
C. Commercial Code Treatment of Bailee’s Stakeholder Role 15.80
D. Settlement Aids
1. Stakeholder Agreement 15.81
2. Agreement to Sell and Deposit Proceeds 15.82
3. Compound Sales and Stakeholder Agreement 15.83
4. Indemnity, Hold Harmless, and Surety Agreement 15.84
E. Form: Complaint in Interpleader 15.85
F. Checklist for Reviewing Third Party Claims 15.86
VIII. DEATH OF PERSON HOLDING UNDER DOCUMENT OF TITLE
A. In General 15.87
B. Form: Declaration Under Probate Code to Collect or Transfer Personal Property 15.88
II. RIGHT TO ASSURANCE OF PERFORMANCE
A. Background 16.2
B. Requirements for Demanding Assurance of Performance
1. Written Demand 16.3
2. Reasonable Grounds for Insecurity 16.4
3. Reasonable Grounds in Installment Contracts 16.5
4. Contractual Definitions of Grounds for Insecurity 16.6
5. Form: Certain Events Are Not Grounds for Demanding Assurance of Performance 16.7
6. Form: Certain Events Are Grounds for Demanding Assurance of Performance 16.8
C. Demand for Adequate Assurance
1. In General 16.9
2. Form: Demand for Adequate Assurance 16.10
3. Form: Form or Timing of Demand Specified 16.11
D. Adequacy and Timeliness of Assurance
1. Adequacy 16.12
2. Form: Type of Assurance to Be Furnished 16.13
3. When Assurance Must Be Given 16.14
4. Fixing Time for Assurance 16.15
E. Permissible Action While Waiting for Assurance 16.16
F. Effect of Failure to Furnish Adequate Assurance 16.17
G. Acceptance of Improper Performance Is Not Waiver 16.18
H. Related Remedies
1. Insolvent Buyer 16.19
2. Insolvent Seller 16.20
III. ANTICIPATORY REPUDIATION AND ITS RETRACTION
A. Introduction 16.21
B. Manifestation of Repudiation
1. Generally 16.22
2. Bankruptcy Issues
a. Automatic Stay 16.23
b. Assumption and Rejection of Contracts 16.24
C. Form: Acts Constituting Repudiation 16.25
D. Substantial Impairment of Value of Contract 16.26
E. Aggrieved Party’s Choices
1. Introduction 16.27
2. Await Performance 16.28
3. Resort to Remedy for Breach 16.29
4. Suspend Performance or Identify or Salvage Goods 16.30
a. Identify Completed Goods 16.31
b. Salvage or Complete Manufacture of Unfinished Goods 16.32
F. Damages After Anticipatory Repudiation
1. Seller’s Damages 16.33
2. Buyer’s Damages 16.34
G. Retraction of Anticipatory Repudiation
1. Introduction 16.35
2. Time for Retraction 16.36
3. Method and Consequences of Retraction 16.37
4. Form: Retraction of Repudiation 16.38
5. Form: Cancellation of Contract Because of Repudiation 16.39
A. Introduction 16.40
1. Introduction 16.41
2. Shipment Contracts 16.42
3. Table: Shift of Risk of Loss 16.43
4. Contracts for Goods Held by Bailee 16.44
5. Other Situations 16.45
6. Contrary Agreement 16.46
C. Effect of Breach on Risk of Loss
1. Preliminary Note 16.47
2. Seller’s Breach
a. Defect Entitles Buyer to Reject Tender 16.48
b. Buyer Revokes Acceptance 16.49
3. Buyer’s Breach 16.50
V. LOSS OF OR DAMAGE TO IDENTIFIED GOODS
A. Summary of Rule 16.51
B. Goods Affected 16.52
C. Risk of Loss 16.53
D. Casualty Without Fault 16.54
E. Total Loss 16.55
F. Partial Loss 16.56
G. Casualty in “No Arrival, No Sale” Contracts 16.57
H. Form: Identified Goods Required or Not Required for Performance 16.58
I. Form: Consequences of Casualty If Risk of Loss Divided 16.59
VI. EXCUSE BECAUSE OF IMPRACTICABILITY
A. Summary of Rule 16.60
B. Factors in Claiming Excused Performance
1. Occurrence Contrary to Basic Assumptions 16.61
2. Compliance With Government Regulations 16.62
3. Assumption of Risk That May Interfere With Performance 16.63
C. Allocation of Production and Deliveries 16.64
D. Notice of Allocation 16.65
E. Power to Shift Risks by Agreement
1. Introduction 16.66
2. Form: Performance Is Conditional 16.67
3. Form: Modification of Allocation 16.68
4. Form: Notification of Delay and Quota 16.69
F. Buyer’s Excuse 16.70
G. Effect of Seller’s Excused Performance on Third Persons 16.71
H. Procedure on Seller’s Notice Claiming Excuse
1. Buyer’s Choice of Responses 16.72
2. Termination and Discharge 16.73
3. Form: Termination for Delay or Allocation of Production and Deliveries 16.74
4. Modification of Contract 16.75
5. Form: Buyer’s Agreement to Modify 16.76
6. Installment Contracts 16.77
7. Validity of Claim of Excuse 16.78
VII. INSPECTION FOR RESOLUTION OF DISPUTES
A. Inspection Is Not Acceptance 16.79
B. Notification and Access to Goods 16.80
C. Third Party Inspection
1. Summary 16.81
2. Relationship to Arbitration 16.82
3. Form: Conditions of Third Party Inspection 16.83
VIII. SUMMARY OF AVAILABLE OPTIONS AND REMEDIES 16.84
Prelitigation Remedies
II. STRATEGIC PLANNING 17.2
III. CONSIDERATIONS APPLICABLE TO BOTH BUYER AND SELLER
A. Cumulation of Remedies 17.3
1. Supplementary Principles of Law Applicable 17.4
2. Preserving Evidence of Goods in Dispute 17.5
B. Installment Contracts 17.6
IV. SELLER’S REMEDIES
A. Summary of Remedies 17.7
B. Who Can Assert Seller’s Remedies? 17.8
C. Choosing Appropriate Remedies 17.9
1. Withholding Delivery
a. Grounds 17.10
b. Effect 17.11
2. Refusing Delivery Except for Cash
a. Grounds: Buyer’s Insolvency 17.12
b. Effect 17.13
3. Stopping Delivery
a. Grounds 17.14
b. Effect 17.15
c. Limits on Right to Stop Delivery 17.16
d. Shipments Under Negotiable Documents 17.17
e. Who May Stop Delivery of Goods? 17.18
f. Procedure for Stopping Delivery 17.19
g. Rights of Carrier or Bailee 17.20
h. Effect of Buyer’s Bankruptcy 17.21
i. Relationship to Division 9 17.22
4. Buyer’s Forfeiture of Its Deposit 17.23
5. Reclaiming Goods
a. Reclamation Under California UCC 17.24
b. Reclamation Following Commencement of Bankruptcy Case 17.25
c. Other Remedies Excluded 17.26
d. 10-Day Limitation and Exception Under Commercial Code 17.27
e. Form: Buyer’s Representation of Solvency 17.28
f. Other Limitations 17.29
g. Rights of Third Parties 17.30
h. Form: Seller’s Demand for Reclaiming Goods 17.31
6. Identifying Goods to the Contract
a. Effect of Identification 17.32
b. What Constitutes Identification? 17.33
c. Grounds 17.34
d. Unfinished Goods 17.35
e. Goods Being Procured 17.36
f. Seller’s Security Interest 17.37
7. Reselling Goods
a. Grounds and Purpose 17.38
b. Public or Private Resale? 17.39
c. Form: Contract Language Governing Resale 17.40
d. Private Sale Procedure 17.41
e. Form: Notice to Buyer of Private Resale of Goods 17.42
f. Public Sale Procedure 17.43
g. Form: Notice to Buyer of Public Resale of Goods 17.44
h. Form: Announcement of Public Sale of Goods 17.45
i. Sales to Affiliates 17.46
j. Leasing 17.47
8. Canceling the Contract
a. Grounds and Effect 17.48
b. Limitations on Right to Cancel 17.49
c. Form: Notice of Cancellation of Contract 17.50
V. BUYER’S REMEDIES
A. Selection of Responses 17.51
B. Summary of Buyer’s Remedies 17.52
1. Rejecting Goods 17.53
a. Perfect Tender Rule 17.54
b. Limitations 17.55
c. Effect 17.56
d. Partial Acceptance 17.57
e. Time and Manner of Rejection 17.58
f. Form: Notice of Rejection 17.59
g. Duties of Buyer With Respect to Rejected Goods 17.60
2. Revoking Acceptance
a. What Constitutes Acceptance? 17.61
b. Effect of Revocation of Acceptance 17.62
c. Circumstances in Which Acceptance May Be Revoked 17.63
d. Time and Manner of Revocation 17.64
e. Form: Notice of Revocation 17.65
f. Form: Limitation on Revocation 17.66
a. Purpose and Consequences 17.67
b. Time and Manner 17.68
c. Effect of Inability or Failure to Cover 17.69
4. Repairing or Replacing Nonconforming Goods 17.70
5. Enforcing Buyer’s Security Interest
a. Purpose of Security Interest 17.71
b. Extent of Security Interest 17.72
c. Relation to Division 9 17.73
d. Procedure for Sale 17.74
6. Claiming Goods From Seller
(1) Goods Purchased for Personal or Household Use 17.75
(2) Seller’s Insolvency 17.76
b. Effect 17.77
c. Insolvency 17.78
d. Payment 17.79
7. Offsetting Buyer’s Damages Against Price
a. Grounds 17.80
b. Effect 17.81
c. Form: Notice of Intention to Deduct Damages 17.82
d. Impact of Accord and Satisfaction Principles 17.83
a. Grounds 17.84
b. Effect 17.85
c. Notification of Cancellation 17.86
d. Contract Reinstatement 17.87
VI. CHECKLIST: MATTERS REQUIRING NOTICE BEFORE ACTION BY SELLER OR BUYER 17.88
II. SELLER’S REMEDIES
A. Damages 18.2
1. Damages Measured by Market Price
a. The Rule 18.3
b. Form: Allegation of Damages Measured by Market Price 18.4
2. Damages Measured by Resale
a. The Rule 18.5
(1) Form: Allegation of Damages Measured by Resale (Private Sale) 18.6
(2) Form: Allegation of Damages Measured by Resale (Public Sale) 18.7
a. The Rule 18.8
b. Form: Allegation of Incidental Damages 18.9
4. Lost Profits 18.10
a. Lost Volume Seller 18.11
b. Component Seller 18.12
c. Jobber or Middleman 18.13
d. Form: Allegation of Damages Measured by Lost Profits 18.14
5. Punitive or Exemplary Damages 18.15
6. Attorney Fees and Costs 18.16
B. Contract Price Recovery
1. When Available 18.17
2. Procedural Aspects 18.18
3. Form: Allegations for Recovery of Price 18.19
III. BUYER’S REMEDIES
A. Damages 18.20
a. The Rule 18.21
b. Form: Allegation of Damages Measured by Market Price 18.22
2. Damages Measured by Cover
a. The Rule 18.23
b. Form: Allegation of Damages Measured by Cover 18.24
3. Damages After Acceptance: Nonconformity and Breach of Warranty 18.25
a. Determining Value of Goods as Accepted
(1) Expert Opinion of Fair Market Value 18.26
(2) Resale Price 18.27
b. Determining Value of Goods as Warranted
(1) Purchase Price 18.28
(2) Repair Costs 18.29
(3) Replacement Price 18.30
(4) Choosing Appropriate Measures of Damages 18.31
c. Special Circumstances 18.32
d. Injury to Person or Property 18.33
e. Notice of Breach 18.34
4. Incidental Damages 18.35
5. Consequential Damages 18.36
a. Lost Profits 18.37
b. Loss of Goodwill 18.38
c. Proof 18.39
d. Excluding Consequential Damages
(1) The Rule 18.40
(2) Form: Recovery of Consequential Damages Excluded 18.41
e. Mitigation of Damages 18.42
6. Attorney Fees 18.43
7. Punitive or Exemplary Damages 18.44
8. Deduction of Damages From Price 18.45
B. Replevin 18.46
C. Specific Performance 18.47
D. Restitution of Payments
1. After Breach by Seller 18.48
2. After Breach by Buyer 18.49
E. Indemnification 18.50
IV. RESTRICTION, QUALIFICATION, AND ENLARGEMENT OF REMEDIES
1. Analysis 18.51
2. Form: Contract Clause Fixing Liquidated Damages 18.52
B. Contractual Modification of Remedies
1. Power to Modify 18.53
a. Overview 18.54
b. Types of Clauses 18.55
c. Repair Time 18.56
d. Consumer Goods 18.57
C. Cumulation and Election of Remedies 18.58
V. SPECIAL LITIGATION PROBLEMS
A. Applicable Law 18.59
B. Choice of Forum 18.60
C. Evidence of Market Price 18.61
D. Burden of Proof 18.62
E. Notice of Breach
1. Summary 18.63
2. Time of Notice 18.64
3. Particularity of Notice 18.65
4. Notice of Breach by Delayed Delivery or Knowledge of Defects 18.66
5. Form: Notice of Breach 18.67
F. Statutes of Limitations 18.68
G. Litigating Unconscionability Claim
1. Background 18.69
2. Meaning of “Unconscionable” 18.70
3. Remedies and Proof 18.71
4. Unconscionability and Arbitration Provisions 18.71A
H. Litigating Claim Under Consumers Legal Remedies Act and Unfair Competition Law 18.72
I. Persons Answerable 18.73
J. Right to Sue Third Parties 18.74
K. Unfair Competition Law
1. Generally 18.75
2. Available Remedies 18.76
3. Statute of Limitations 18.77
A. Overview of Division 10 19.1
B. Scope of Division 10 19.2
C. Relationship of Division 10 to Divisions 2 and 9 19.3
D. Transition From Prior Law to Division 10 19.4
II. LEASE VERSUS SECURITY INTEREST
A. Reason for Distinction Between Lease and Security Interest
1. Overview 19.5
2. Importance of Distinction 19.6
3. Taxation and Accounting Issues in General 19.7
4. Distinctions Between Operating and Capital Leases 19.8
5. Synthetic Lease or Off Balance Sheet Loan 19.9
B. Revised Definition of Security Interest 19.10
C. Two-Part Test for “Security Interest”
1. Lessee’s Right to Terminate 19.11
2. Lessor’s Residual Interest 19.12
D. Consideration of Other Factors 19.13
E. Application of Revised Definition of Security Interest
1. Lease to End of Economic Life
a. Original Lease Term 19.14
b. Options to Renew 19.15
c. Options to Purchase 19.16
2. Option Consideration 19.17
3. Risk of Depreciation: Terminal Rental Adjustment Clause (TRAC) 19.18
A. Offer and Acceptance 19.19
B. Modification and Waiver 19.20
C. Statute of Frauds 19.21
D. Parol Evidence Rule 19.22
IV. CHOICE OF LAW AND FORUM SELECTION
A. Choice of Governing Law 19.23
B. Forum Selection Clause 19.24
C. Variations in Commercial Code Provisions and Other Laws 19.25
D. Special Rules for Consumer Leases 19.26
E. Special Rules for Goods Covered by Certificate of Title 19.27
V. TYPES OF LEASES
A. Introduction 19.28
1. Overview 19.29
2. Definition of Finance Lease 19.30
3. Lessor Who Is Affiliate of Manufacturer or Supplier 19.31
4. Lessor’s Warranties 19.32
5. Pass-Through of Supplier Warranties 19.33
6. Lessee’s Obligations Irrevocable 19.34
7. Form: Hell or High Water Covenant 19.35
8. Liability in Tort 19.35A
9. Revocation of Acceptance of Goods 19.36
10. Risk of Loss 19.37
1. Definition 19.38
2. Protections Given to Consumer Lessees 19.39
3. Consumer Finance Leases 19.40
D. Installment Leases
1. Definition 19.41
2. Breach 19.42
3. Master Lease 19.43
VI. RISK OF LOSS; INSURANCE
A. Rules for Determining Risk of Loss 19.44
B. Insurable Interest in Goods 19.45
C. Form: Insurance Covenant 19.46
D. Form: Risk of Loss Covenant 19.47
VII. DUTY TO MAINTAIN LEASED PROPERTY
A. Duty to Maintain 19.48
B. Form: Maintenance Covenant 19.49
VIII. ACCEPTANCE AND REJECTION
A. Acceptance of Goods by Lessee 19.50
B. Form: Acceptance Covenant and Certificate 19.51
C. Revocation of Acceptance 19.52
D. Rejection of Goods by Lessee
1. Perfect Tender Rule 19.53
2. Lessee’s Security Interest in Rejected Goods 19.54
3. Lessee’s Duties as to Rightfully Rejected Goods
a. Duties in General 19.55
b. Additional Duties of Merchant Lessee 19.56
4. Lessor’s Right to Cure 19.57
E. Lessee’s Waiver of Objections to Nonconforming Delivery 19.58
A. Background 19.59
B. Express Warranties 19.60
1. Overview 19.61
2. Quiet Enjoyment 19.62
3. Form: Quiet Enjoyment Covenant 19.63
4. Against Infringement 19.64
5. Merchantability 19.65
6. Fitness for Lessee’s Particular Purposes 19.66
7. Form: Disclaimer of Implied Warranties 19.67
X. ALIENATION, DELEGATION, ASSIGNMENT, AND SUBLEASE
A. Restrictions on Alienation as Disfavored 19.68
B. Subleases 19.69
C. Assignment and Delegation 19.70
D. Form: Restrictions on Transfer 19.71
E. Grant of Security Interest 19.72
F. Form: Quiet Enjoyment Letter 19.73
G. Foreclosure of Security Interest 19.74
H. Transfer of Rights to Payments or Damages 19.75
I. Priorities Among Conflicting Claimants
1. Overview 19.76
2. When Lessor Sells Goods 19.77
3. When Lessor Subsequently Leases Goods 19.78
4. When Lessee Subleases Goods 19.79
5. When Lessee Sells Goods 19.80
6. When Goods Are Entrusted 19.81
J. Rights of Possessory Lienholder 19.82
K. Form: Covenant to Keep Free of Liens 19.83
L. Rights of Lessee’s Creditors 19.84
M. Rights of Lessor’s Creditors
1. As Subject to Lease; Exceptions 19.85
2. Pledge of Lease as Collateral 19.86
XI. Fixtures and Accessions
A. Conflicting Interests in Fixtures
1. Overview; Definitions 19.87
2. Priority Rules 19.88
3. Requirements for Fixture Filings 19.89
B. Form: Landlord’s Waiver 19.90
C. Conflicting Interests in Accessions 19.91
D. Filing Financing Statement 19.92
XII. LIABILITY TO THIRD PARTIES AND INDEMNIFICATION
A. Indemnification 19.93
B. Form: Indemnification Covenant 19.94
XIII. PERFORMANCE AND REPUDIATION
A. Adequate Assurances of Performance 19.95
B. Repudiation 19.96
C. Substituted Performance 19.97
D. Excused Performance 19.98
XIV. DEFAULT AND REMEDIES
A. Default by Lessor; Lessee’s Remedies
1. Overview 19.99
2. General Provisions 19.100
3. Measure of Damages Following Cover 19.101
4. Measure of Damages Without Cover or Nonqualifying Cover 19.102
5. Incidental and Consequential Damages 19.103
6. Form: Waiver of Consequential Damages 19.104
7. Specific Performance and Other Remedies 19.105
B. Default by Lessee; Lessor’s Remedies
1. General Provisions 19.106
2. Form: Remedies Clause 19.107
3. Retention or Repossession of Goods 19.108
4. Disposition of Goods Under Substantially Similar Lease 19.109
5. Measure of Damages in Absence of Qualifying Disposition 19.110
6. Recovery of Rent for Balance of Lease Term 19.111
7. Incidental Damages 19.112
8. Consequential Damages 19.112A
1. Liquidated Damages 19.113
2. Restitution 19.114
3. Cancellation and Termination 19.115
D. Standing to Sue Third Parties for Damage to Leased Goods 19.116
E. Statute of Limitations 19.117
XV. FRAUDULENT CONVEYANCE ISSUES 19.118
XVI. BANKRUPTCY ISSUES
A. Introduction 19.119
B. Applicability of Bankruptcy Law
1. Terminated Versus Unexpired Leases 19.120
2. Unenforceability of Bankruptcy Clauses in Leases 19.121
3. Lessors of Aircraft, Vessels, and Rolling Stock 19.122
C. Effect of Automatic Stay 19.123
D. Use, Sale, or Lease of Property of Estate 19.124
E. Assumption or Rejection of Lease
1. Rule Permitting Assumption or Rejection of Unexpired Term 19.125
2. Time Limits for Assumption or Rejection 19.126
3. Procedure for Assumption or Rejection 19.127
4. Assumption When Defaults Exist 19.128
5. Assumption of Entire Lease 19.129
6. Rejection as Breach of Lease 19.130
F. Lessor’s Claims in Bankruptcy Proceedings
1. Prepetition Claims 19.131
2. Postpetition Claims 19.132
G. Assignment of Leases After Bankruptcy 19.133
H. Preferential Transfer Questions 19.134
Noncontractual Intent
Firm Offer for Specified Period
Firm Offer Subject to Contingencies
Firm Renewable Offer
Firm Offer in Form Supplied by Offeree
Firm Offer by Nonmerchant
Acceptance by Return of Form
Notice of Acceptance by Performance
Offeror’s Waiver of Notice of Acceptance
Notice That Offer Has Lapsed
Requirement of Notice of Acceptance by Given Date
Requirement of Acceptance by Promise to Ship
Requirement of Acceptance by Performance
Precluding Accommodation Shipments
Requirement of Seasonable Notification of Acceptance or Accommodation
Notice of Intentional Accommodation Shipment
Notice of Unintentional Accommodation Shipment
Sales Agreement Checklist
Merchantability and Particular Purpose Warranties Disclaimed
Sale of Goods “As Is” and “With All Faults”
Examination Made or Refused
Warranty of Title Disclaimed
Warranty Against Infringement Disclaimed
Description Displaces Sample
Notice of Infringement Suit
Notice of Litigation; Requesting Defense
Demand for Control of Infringement Action
Allegation of Express Warranty by Affirmation
Allegation of Express Warranty by Description
Allegation of Express Warranty by Sample or Model
Allegation of Implied Warranty of Merchantability
Allegation of Implied Warranty of Fitness for Particular Purpose
Allegation of Noncompliance With Warranty
Allegation of Notice of Breach
Allegation That Notice of Litigation Was Given
Allegation of Warranty of Title
Allegation of Lack of Title
Allegation of Disturbance of Quiet Possession
Allegation of Incidental and Consequential Damages
Allegation of Exclusion or Disclaimer
Allegation of Lack of Privity
Allegation of Examination or Refusal to Examine
Allegation of Exclusion or Modification by Past Experience
Sample Warranty Form
Agreement to Agree on Price
Agreement to Agree (Maximum and Minimum Price)
Open Price Tied to Market Price
Price Keyed to Published Index
Price Adjusted to Seller’s Competitors’ Prices
Appraiser or Arbitrator to Set Price
Same Price as Given Others
Price Fixed in Bad Faith
Price Dependent on Resale
Price Set at Discretion of Contract Party
Price Increased at Discretion of Seller
No Sale If Price Not Set
Recital for New Business
Stated Estimate
Variable Maximum Quantity
Variable Minimum Quantity
Description of Output Subject to Contract
Definition of “Best Efforts” (Buyer’s and Seller’s Protection)
Nonexclusive Supply by Seller
Delivery of Goods in Possession of Third Party
Notification of Proposed Time Limit
Objection to Proposed Time Limit; Counterproposal
Right of Inspection Reserved by Buyer
Procedure for Specification of Particulars of Contract Provisions
Exclusion of Course of Performance
Sample Seller’s Notice of Objection to Buyer’s Course of Performance
Incorporation or Exclusion of Course of Dealing
Usages of Trade Expressly Incorporated by Reference
Usage of Trade Excluded or Limited
Acceptance Conditional on Assent to Changes
Acceptance Expressly Limited to Offer’s Terms
Objection to All Proposed Terms
Objection to Only Some Proposed Terms
Prohibition of Oral Modification or Rescission
Modification Increasing Contract Price
Rescission of Written Contract
Prohibition of Oral Waiver
Limitation on Application of Waiver
Retraction of Waiver Allowing Substitution of Goods
Checklist for Introduction of Evidence
Place or Manner of Inspection
Contract Provision Requiring Notification of Return
Notice of Election to Return Goods
Time and Manner of Rejection
Request for Full and Final Statement of Defects
Assignment of Rights Excluding Delegation of Duties
Consent to Assignment of Rights
Prohibition of Assignment of Rights
Assignment Expressly Permitted
Express Delegation of Performance
Delegation Expressly Permitted
Notice for Exemption When Buyer Assumes Debts to Known Claimants
Notice for Exemption When Buyer Assumes All Debts
Notice for Transfers Not by Auction or Liquidation Sale
Notice of Intended Bulk Sale by Public Auction
Notice of Intended Bulk Transfer by Liquidator on Seller’s Behalf
Checklist of Possible Problems on Issuance of Document of Title
Notice to Merchant of Private Sale
Suggested Notice of Intent to Sell Goods at Public Auction
Bailee’s Duty of Care
§15.62
§15.63
Checklist: Considering Claims Against Bailee
Pleading Allegations as to Breach of Duty by Carrier Resulting in Loss or Damage to Goods
Pleading Allegations as to Complaint Against Warehouse for Failure to Follow Lien-Enforcement Procedures
Allegations: Answer Raising Defense of Agreed Value
Allegations: Defense of Late Filing of Claim
Allegations: Answer Raising Defense of Exclusion From Liability
Allegation: Defense of Valid Enforcement of Lien
§15.85
Checklist for Reviewing Third Party Claims
Declaration Under Probate Code to Collect or Transfer Personal Property
Certain Events Are Not Grounds for Demanding Assurance of Performance
Certain Events Are Grounds for Demanding Assurance of Performance
Demand for Adequate Assurance
Form or Timing of Demand Specified
Type of Assurance to Be Furnished
Acts Constituting Repudiation
Cancellation of Contract Because of Repudiation
Identified Goods Required or Not Required for Performance
Consequences of Casualty If Risk of Loss Divided
Performance Is Conditional
Modification of Allocation
Notification of Delay and Quota
Termination for Delay or Allocation of Production and Deliveries
Buyer’s Agreement to Modify
Conditions of Third Party Inspection
Buyer’s Representation of Solvency
Seller’s Demand for Reclaiming Goods
Contract Language Governing Resale
Notice to Buyer of Private Resale of Goods
Notice to Buyer of Public Resale of Goods
Announcement of Public Sale of Goods
Limitation on Revocation
Notice of Intention to Deduct Damages
Checklist: Matters Requiring Notice Before Action by Seller or Buyer
Allegation of Damages Measured by Market Price
Allegation of Damages Measured by Resale (Private Sale)
Allegation of Damages Measured by Resale (Public Sale)
Allegation of Incidental Damages
Allegation of Damages Measured by Lost Profits
Allegations for Recovery of Price
Allegation of Damages Measured by Cover
Recovery of Consequential Damages Excluded
Contract Clause Fixing Liquidated Damages
Hell or High Water Covenant
Risk of Loss Covenant
Acceptance Covenant and Certificate
§19.63
§19.67
Covenant to Keep Free of Liens
§19.90
§19.107
In James v Global Tel*Link Corp. (3d Cir 2017) 852 F3d 262, 267, users of a telephone service for prison inmates could sign up either online or over the telephone. Those signing up over the telephone were told that the terms of use for the service were available on the company’s website. However, they were not required to visit the website or demonstrate acceptance of the terms of use through any affirmative act. Nor were they told that their use of the phone service would itself constitute assent to the terms of use, which included an agreement to arbitrate disputes and a class-action waiver. The court held that such users “had neither the knowledge nor intent necessary to provide ‘unqualified acceptance,’” and were therefore not bound by the terms of use. See §2.50H.
The Airline Deregulation Act of 1978 (49 USC §41713) does not preempt a passenger’s breach of contract claim based on the airline’s failure to timely deliver luggage as promised. Hickcox-Huffman v US Airways, Inc. (9th Cir 2017) 855 F3d 1057. See §9.6.
A new §12.26A has been added, dealing with transactions under the Perishable Agricultural Commodities Act (PACA) (7 USC §§499a–499s).
ANNE M. BONGI received her undergraduate degree from Northwestern University and her J.D. from Boston College Law School. She is Senior Counsel for SVB Financial Group in Santa Clara.
BARBARA L. BORDEN received her B.A. degree in 1981 from the University of Virginia and her J.D. degree in 1984 from Arizona State University. Ms. Borden, of the firm of Sheppard, Mullin, Richter & Hampton, practices law in San Diego.
JAMES F. BROWN received his B.S. degree in 1985 from Weber State University and his J.D. degree in 1988 from Brigham Young University. He was formerly of the firm of Pillsbury, Madison & Sutro, practicing commercial law in San Francisco.
MARK J. COLEMAN received his B.A. degree in 1980 from Pomona College and his J.D. degree in 1983 from the University of California, Berkeley, School of Law. He was formerly with the firm of Pillsbury, Madison & Sutro, practicing commercial law in San Francisco. Mr. Coleman served on the UCC Committee of the Business Law Section of the California State Bar.
HENRY S. DAVID received his B.S. degree in 1976 from the California Institute of Technology and his J.D. degree in 1979 from New York University. Mr. David, of the firm of Squire, Sanders & Dempsey L.L.P., practices law in Los Angeles.
LOYD P. DERBY received his A.B. degree in 1963 from the University of California, Berkeley, and his J.D. degree in 1966 from the University of California, Berkeley, School of Law. Mr. Derby, formerly of the firm of Morgan, Lewis & Bockius LLP, practiced law in Los Angeles.
REID H. EVERETT received his B.A. degree in 1978 from Brigham Young University and his J.D. degree in 1981, also from Brigham Young University. He is a member of the firm of Perkins, Mann & Everett, APC in Fresno.
JEROME GROSSMAN received his B.A. degree in 1974 from the University of California, San Diego, and his J.D. degree from the University of California, Berkeley, School of Law, where he was a member of the Order of the Coif. Mr. Grossman’s practice focuses on Uniform Commercial Code secured transactions, real estate secured transactions, and other financing transactions (including securitized financings) and third-party legal opinions. Mr. Grossman is Chair of the Opinions Committee of the Business Law Section of the California State Bar and serves on the Board of Governors of the Financial Lawyers Conference. He is a partner in the firm of Luce, Forward, Hamilton & Scripps LLP, practicing in San Diego.
BRYAN D. HULL received his B.A. degree in 1979 and his J.D. degree in 1982 from the University of California, Los Angeles. Mr. Hull is Professor of Law at Loyola Law School in Los Angeles. Before joining the faculty at Loyola, he practiced with Latham & Watkins and served as Bank Operations Counsel at Crocker National Bank. He is a Member of the Executive Committee of the Los Angeles County Bar Commercial Law and Bankruptcy Section. Mr. Hull has served on the UCC Committee of the Business Law Section of the California State Bar and was Chair of the Subcommittee that studied changes to Division 6. He worked with the California Commission on Uniform State Laws in drafting new Division 6.
IVAN L. KALLICK received his B.S. degree in 1977 from the University of California, Los Angeles, and his J.D. degree in 1980 from the University of San Francisco. Mr. Kallick, of the firm of Manatt, Phelps & Phillips LLP, practices law in Los Angeles.
JEFFREY M. KAYES received his B.S. degree from the University of Michigan in 1997 and his J.D. degree in 2000, also from the University of Michigan. Mr. Kayes is a member of the UCC Committee of the Business Law Section of the California State Bar. He practices with the firm of Latham & Watkins LLP in San Francisco.
JANICE E. KOSEL received her undergraduate degree from the University of California, Berkeley, and her J.D. degree from the University of California, Berkeley, School of Law, where she was a member of the Order of the Coif. She is a former member of the UCC Committee of the Business Law Section of the California State Bar, and is currently a professor of law in the subjects of sales, contracts, and commercial finance at Golden Gate University School of Law in San Francisco. Before joining the faculty at Golden Gate, she practiced with the firm of Orrick, Herrington, Rowley & Sutcliffe in San Francisco.
RICHARD J. MAIRE, JR., received his B.A. degree in 1980 from the University of California, Los Angeles, and his J.D. degree in 1983 from the University of Southern California. Mr. Maire, of the firm of Manatt, Phelps & Phillips LLP, practices law in Los Angeles.
NEIL B. MARTIN received his A.B. degree and his J.D. degree from the University of Southern California. Mr. Martin is vice president and senior counsel in the legal department of City National Bank in Beverly Hills.
HELEN MILOWE received her A.B. degree in 1984 from the University of California, Berkeley, and her J.D. degree in 1988 from the University of California, Hastings College of the Law. Ms. Milowe practices law in San Rafael.
DAVID V. OTTERSON received his B.A. degree in 1977 from California State University, Chico, and his J.D. degree in 1980 from the University of California, Hastings College of the Law. Mr. Otterson, formerly of the firm of Crosby, Heafy, Roach & May, in Oakland, now practices law as a member of Helms Mulliss & Wicker, PLLC, in Raleigh, North Carolina.
WILLIAM B. PIELS received his B.A. degree in 1977 from Macalester College and his J.D. degree in 1980 from the University of Oregon. Mr. Piels, of the firm of Holland & Knight LLP, in San Francisco, practices in all areas of asset-based financing and has extensive experience representing lessors, lessees, and lenders in a broad variety of equipment financing transactions.
HON. WHITNEY RIMEL received her B.A. degree in 1969 from Oberlin College, her M.A. degree in 1972 from the University of Chicago, and her J.D. degree in 1982 from the University of California, Davis, School of Law. Judge Rimel, formerly a partner in the law firm of Diepenbrock, Wulff, Plant & Hannegan in Sacramento, is a judge of the United States Bankruptcy Court for the Eastern District of California, in Fresno. Judge Rimel has served on the UCC Committee of the Business Law Section of the California State Bar and has been an adjunct professor at McGeorge School of Law.
THOMAS ROSS received his B.S. degree in 1957 from the United States Naval Academy and his J.D. degree in 1980 from the University of California, Davis, School of Law. Mr. Ross was formerly of counsel to the law firm of Downey, Brand, Seymour & Rohwer in Sacramento.
MELISSA N. SANCHEZ received her B.A. degree from the University of California, Davis, where she was the recipient of a Regents Scholarship, and her J.D. degree from Columbia University School of Law, where she was a Robert L. Lieff Scholar. She practices with the firm of Manatt, Phelps & Phillips LLP in Los Angeles.
MICHAEL K. SLATTERY received his B.A. degree in 1978 from Princeton University and his J.D. degree in 1982 from the University of Southern California. Mr. Slattery formerly practiced bankruptcy and commercial law with the firm of Rutan & Tucker in Costa Mesa, and now serves in the office of the County Counsel in Fresno. He is the author of FIRREA Receivership and Conservatorship Law (Clark Boardman Callaghan 1992). He has taught courses at Western State University College of Law on UCC sales, bankruptcy, and contracts.
WAYNE H. THOMAS received a B.S. degree from Oklahoma State University in 1962, an M.B.A. degree from the University of North Dakota in 1974, and a J.D. degree from the University of California, Davis, School of Law in 1978. He has been a Certified Specialist in Business Bankruptcy Law through the American Bankruptcy Board of Certification and a Certified Specialist in Personal and Small Business Bankruptcy Law through the State Bar of California Board of Legal Specialization. Mr. Thomas is Special Counsel to Thoits, Love, Hershberger & McLean in Palo Alto.
MARCIA B. WILBUR received her B.A. degree from California State University, Fresno, and her J.D. degree from Pepperdine University. Ms. Wilbur is Dean Emeritus at Western State University College of Law in Fullerton and an instructor in commercial law.
ERICH P. WISE received his A.B. degree in 1970 from Harvard University and his J.D. degree in 1974 from the University of Chicago. Mr. Wise, of the firm of Flynn, Delich & Wise, practices law in Long Beach.