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PART FOUR
SALES
Teaching Suggestions
1. Obtain a retail installment contract or charge account agreement from a store, bank, or loan
company for the class to read and discuss.
Group Projects
1. After dividing the class into groups, assign each group to study and report on the risks
involved by the parties to various types of sales: existing goods identified to the contract to
CHAPTER 16
SALES OF PERSONAL PROPERTY
Answers to Learning Objectives
(Page 180)
1. Goods consist of movable personal property, which means all physical items that are not real estate.
2. A sale is the transfer of title to goods for a price. A contract to sell is the agreement to transfer title
Lesson Outline
1. Contracts for the sale of goods (movable personal property) constitute the largest class of contracts
in our economic system.
2. Sales of movable personal property are governed by Article 2 of the Uniform Commercial Code,
Chapter 16
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4. A distinction is made between a sale and a contract to sell:
a. A sale is an agreement whereby title passes immediately to the buyer.
b. A contract to sell is an agreement whereby the title is to pass to the buyer at some future time.
5. Even when a contract for services includes the supplying of some articles of movable personal
Comments on Cases
(p. 181) The court pointed out that both Crutchfield and Guthrie had performed their parts of the
agreement at the time of the accident. While Crutchfield was to produce clear title to the car, he
had a reasonable time to do that. Since the accident occurred on the day of the sale, there had
been no breach of contract at the time of the accident. Full performance of the contract was not
required before the sale took place. Farmers Ins. Exch. v. Crutchfield, 113 P.3d 972 (Or. Ct.
App.).
(p. 184) The court said that the dominant factor in the entire venture was the production and sale of
photo tapestries and product kits. Any service was only a very small part. Agri-Sales
Associates, Inc. v. McConnell, 75 UCC Rep.Serv.2d 24 (Tenn.)
App. Div.) Answers to Questions
(Page 186)
1. In terms of the number of contracts as well as the dollar volume, contracts for the sale of goods—
movable personal property—constitute the largest class of contracts in our economic system.
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2. If both parties—the buyer and the seller—choose to abide by the terms of a sales contract that does
not meet the requirements of the UCC even if they are not legally bound to do so, neither party can
later avoid the contract.
5. Whether a contract is for the sale of goods or the supplying of a service is determined by which
factor is predominate.
6. If the parties to a sales contract indicate that the price must be fixed by them or by a third person at
a later date, no binding contract arises if the price is not thus fixed. If the price can be computed
from the terms of the contract, the contract is valid.
Answers to Case Problems
(Page 186)
1. No. The court said there was no agreement that identification would occur at a particular time or in
a particular manner. Since there was no record of how much corn Sunbelt had on hand at the time
of the sale to Whitham there was no way to show there was sufficient corn to complete the contract.
In addition there was no mass of corn that could be identified in the contract. In re Sunbelt Grain
WKS, LLC, 427 B.R. 896 (Kan.)
(Or. Ct. App.)
4. Yes. Even though incidental services such as the training and consulting were included in the
contract it was for the sale of goods—the computer software. The court pointed out that without the
sale of the software, the services were unnecessary. Wachter Management Co. v. Dexter & Chaney,
Inc., 144 P3d 747 (Kan.)