CHAPTER 16: THE FORMATION OF SALES AND LEASE CONTRACTS 17
whole or in part.
8. Discuss unconscionability under the UCC. Unconscionability was a pre-UCC doctrine codified by the
UCC. An unconscionable contract is one that is so unfair and one-sided that enforcing it would be unreasonable. If a
court finds a contract or any clause in a contract to be unconscionable at the time it was made, in light of general
whole or in part.
commercial practice and the needs of the trade involved, the court can (1) refuse to enforce the contract, or (2)
does not provide for acceptance by shipment of goods or for additional terms in an acceptance or confirmation. Under
Article 2A, an oral lease is enforceable if the lease payments are less than $1,000. Article 2A does not say whether a
lease as modified needs to satisfy the Statute of Frauds. Article 2A replaces Article 2’s implied warranty of title with an
implied warranty of quiet possession. Article 2A extends protection against unconscionability to leases and expands it
in cases concerning consumer leases. (A consumer lease involves a lessor who regularly engages in the business of
10. What is the United Nations Convention on Contracts for the International Sale of Goods (CISG)? The
CISG is the international version of Article 2 of the Uniform Commercial Code and governs international sales transac–
tions. If the parties involved in an international sales transaction fail to specify in writing the terms of a contract (price,
delivery, form of payment, etc.), the CISG will be applied. Although the CISG and UCC share many common features,
1. Have students research the differences between the UCC and the version of the UCC that their state has
adopted.
2. The UCC permits courts to find contracts or contract clauses unconscionable, but the term unconscionability
is not defined in the UCC. Its interpretation is left to the courts. Have students research how the courts of their state
supplied Encore Glass, Inc., with wine bottles under an “Amended Agreement” that required the bottles to be made at
CPI’s plant in Lavington, British Columbia, Canada. CPI and Anchor were not obligated to make the bottles until they
accepted a purchase order from Encore. Encore could obtain discounts of 2 to 7 percent on its purchases through
Anchor but was not obligated to buy a minimum quantity When CPI sold the Lavington plant, Encore began buying
bottles from Vitro Packaging, Inc., without the discounts. Anchor filed for bankruptcy. Encore filed a claim with the
whole or in part.
CHAPTER 16: THE FORMATION OF SALES AND LEASE CONTRACTS 21
EXAMPREP—
ISSUE SPOTTERS
1. E-Design, Inc., orders 150 computer desks. Fav-O-Rite Supplies, Inc., ships 150 printer stands. Is
this an acceptance of the offer or a counteroffer? If it is an acceptance, is it a breach of the contract?
What if Fav-O-Rite told E-Design it was sending the printer stands as “an accommodation”? A
shipment of nonconforming goods constitutes an acceptance and a breach, unless the seller seasonably
notifies the buyer that the nonconforming shipment does not constitute an acceptance and is offered only as
an accommodation. Thus, since there was no notification in this problem, the shipment was both an accep–
tance and a breach.
2. Truck Parts, Inc. (TPI), often sells supplies to United Fix–It Company (UFC), which services trucks.
Over the phone, they negotiate for the sale of eighty-four sets of tires. TPI sends a letter to UFC
detailing the terms and two weeks later ships the tires. Is there an enforceable contract between
them? Why or why not? Yes. In a transaction between merchants, the requirement of a writing is satisfied if
one of them sends to the other a signed written confirmation that indicates the terms of the agreement, and
the merchant receiving it has reason to know of its contents. If the merchant who receives the confirmation
does not object in writing within ten days after receipt, the writing will be enforceable against him or her even
though he or she has not signed anything.
whole or in part.
commercial practice and the needs of the trade involved, the court can (1) refuse to enforce the contract, or (2)
does not provide for acceptance by shipment of goods or for additional terms in an acceptance or confirmation. Under
Article 2A, an oral lease is enforceable if the lease payments are less than $1,000. Article 2A does not say whether a
lease as modified needs to satisfy the Statute of Frauds. Article 2A replaces Article 2’s implied warranty of title with an
implied warranty of quiet possession. Article 2A extends protection against unconscionability to leases and expands it
in cases concerning consumer leases. (A consumer lease involves a lessor who regularly engages in the business of
10. What is the United Nations Convention on Contracts for the International Sale of Goods (CISG)? The
CISG is the international version of Article 2 of the Uniform Commercial Code and governs international sales transac–
tions. If the parties involved in an international sales transaction fail to specify in writing the terms of a contract (price,
delivery, form of payment, etc.), the CISG will be applied. Although the CISG and UCC share many common features,
1. Have students research the differences between the UCC and the version of the UCC that their state has
adopted.
2. The UCC permits courts to find contracts or contract clauses unconscionable, but the term unconscionability
is not defined in the UCC. Its interpretation is left to the courts. Have students research how the courts of their state
supplied Encore Glass, Inc., with wine bottles under an “Amended Agreement” that required the bottles to be made at
CPI’s plant in Lavington, British Columbia, Canada. CPI and Anchor were not obligated to make the bottles until they
accepted a purchase order from Encore. Encore could obtain discounts of 2 to 7 percent on its purchases through
Anchor but was not obligated to buy a minimum quantity When CPI sold the Lavington plant, Encore began buying
bottles from Vitro Packaging, Inc., without the discounts. Anchor filed for bankruptcy. Encore filed a claim with the
whole or in part.
CHAPTER 16: THE FORMATION OF SALES AND LEASE CONTRACTS 21
EXAMPREP—
ISSUE SPOTTERS
1. E-Design, Inc., orders 150 computer desks. Fav-O-Rite Supplies, Inc., ships 150 printer stands. Is
this an acceptance of the offer or a counteroffer? If it is an acceptance, is it a breach of the contract?
What if Fav-O-Rite told E-Design it was sending the printer stands as “an accommodation”? A
shipment of nonconforming goods constitutes an acceptance and a breach, unless the seller seasonably
notifies the buyer that the nonconforming shipment does not constitute an acceptance and is offered only as
an accommodation. Thus, since there was no notification in this problem, the shipment was both an accep–
tance and a breach.
2. Truck Parts, Inc. (TPI), often sells supplies to United Fix–It Company (UFC), which services trucks.
Over the phone, they negotiate for the sale of eighty-four sets of tires. TPI sends a letter to UFC
detailing the terms and two weeks later ships the tires. Is there an enforceable contract between
them? Why or why not? Yes. In a transaction between merchants, the requirement of a writing is satisfied if
one of them sends to the other a signed written confirmation that indicates the terms of the agreement, and
the merchant receiving it has reason to know of its contents. If the merchant who receives the confirmation
does not object in writing within ten days after receipt, the writing will be enforceable against him or her even
though he or she has not signed anything.