Chapter 20 - Summary Business Law: Text and Cases PDF

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Cristina Adum 6-April-2017 Chapter 20: Formation of Sales and Lease Contracts 1.

Briefly note whether the UCC departs in any significant way from common law rules on the following: a. Offer and acceptance: in common law rules, the moment a definite offer is met by an unqualified acceptance, a binding contract is formed. In commercial sales verbal exchanges, correspondence and actions may not reveal exactly when a binding contractual obligation has been formed. Under the UCC an agreement sufficient to constitute a contract can exist even if the moment it was formed is undetermined. b. Consideration requirement: under common law, contract requires consideration for it to be enforceable. However, under the UCC, the contract does not require modification to be supported by new consideration. The UCC states that an agreement modifying a contract for sale/lease needs no consideration to be binding. c. Parol evidence rule: under the UCC, the meaning of any agreement that is evidenced by language of the parties and by their actions will be interpreted in the light of commercial practices. Hence, a court will assume that the course of dealing and the general usage of trade were taken into account then the agreement was phrased.

2.

What is your initial reaction as to whether you would prefer to contract under common law rules or the UCC? Under the UCC or the CISG? Explain your preferences. It depends on the case. Under the UCC, for example, consideration is not a prerequisite for contract modification. However, in common law rules, consideration is needed in order to modify a contract. These differences could be a benefit or a detriment a party, depending on their position. However, I believe that consideration should be included in the modification of a contract because by changing the terms of the agreement, one of the parties may incur different costs that he/she originally did not plan for. Between the UCC or the CISG, the UCC has a larger scope for contract formation so it covers more deals and conflicts in agreements. Hence, I think it would be better to choose the UCC if the situation allows it....