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51 Cards in this Set
- Front
- Back
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Uniform Commercial Code
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A model act that includes comprehensive laws that cover most aspects of commercial transactions. All the states have enacted all or part of the UCC as statutes.
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Article 2 of the UCC
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An article that governs the sale of goods. In other words this deals with sales. This is applied by federal courts to sales and sales contracts governed by federal law.
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Sale Definition and example
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the passing of title of goods from a seller to a buyer for a price.
Ex. The purchase of a computer is a sale subject to Article 2 whether it was paid for using cash, credit card, or another form of consideration. |
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Goods
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tangible things that are movable at the time of their identification to a contract. This includes manufactured goods and the unborn young of animals.
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What are some things that are not included goods? 2 Major items
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1. Money and intangibles are not tangible and therefore not goods.
Example: stocks, bonds, patents. 2. Real estate because it is not moveable. Minerals, structures, growing crops and over severable things can be classified as goods. |
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Mixed sale
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A sale that involves the provision of a service and a good in the same transaction. To qualify, goods must be the dominant part of the transaction.
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Merchant 2 main qualifications
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1. Deals in the gods of the kind involved in a transaction.
OR 2. By his or her occupation holds himself or herself as having knowledge or skill peculiar to the goods involved in the transaction. |
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Example of someone who can at one time be a merchant and at another time not be a merchant.
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A sporting goods dealer is a merchant with respect to the sporting goods he sells. This sporting goods dealer is not a merchant concerning the sale of his lawn mower to a neighbor.
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What does Article 2A deal with?
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Article 2A governs the leases of goods.
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What type of transactions fall under 2A?
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Consumer leases of automobiles or equipment and commercial leases of such items as aircraft and industrial machinery
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Lease
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A transfer of the right to the possession and use of named goods for a set term in return for certain consideration.
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Lessor
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Person who transfers right of possession and use of goods under a lease.
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Lessee
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A person who acquires the right to possession and use of goods under a lease.
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Finance lease
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A three party transaction consisting of a lessor, a lessee, and a supplier.
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Give an example of a finance lease
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A commercial aircraft carrier decides to lease a new airplane that is manufactured by Boeing. To finance the airplane acquisition, the airline goes through a bank. The bank purchases the airplane from Boeing and leases it to the airline. Boeing is the supplier, the bank is the lessor, and the airline is the lessee.
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Does the formation of a lease require offer and acceptance?
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YES!
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Are open terms acceptable in leases?
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Yes, the UCC tolerates open terms.
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A contract does not fail for indefiniteness when:
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1. The parties intended to contract.
2. There is reasonably certain basis for giving an appropriate remedy. |
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What is the fact that the UCC allows for indefininteness in a contract called?
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Open terms or gap filling rule.
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What is an open price term?
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If a sales contract does not have specific price, a reasonable price is implied at time of delivery
Ex. A contract may provide that a price is to be fixed by market rate. |
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What must a seller who reserves the right to fix a price do?
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Must operate in good faith.
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When one party fails to fix price the other party may opt to:
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1. Treat the contract as cancelled.
2. Fix a reasonable price for the goods. |
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Open payment term
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If parties fail to agree on payment terms the payment is due at the time and place at which the buyer is to receive the goods.
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Open Delivery Terms
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If parties don't agree to the time, place, and manner of delivery, the place for delivery is sellor's place of business or house.
If goods are located else where and both parties are aware, that place is place of delivery. If goods are to be shipped but shipper is not named, seller is obligated to make arrangements. |
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Open time term
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If parties don't set a specific time of performance for any obligation in a contract the contract must be performed within a reasonable time.
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Open assortment term
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If the assortment of goods to a sales contract is left open the buyer is given the option of choosing goods. Must make choice in good faith.
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Consideration
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An agreement modifying a lease doesn't require any new additional consideration.
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When is an offer accepted?
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When the letter is mailed.
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Method and manner of acceptance acceptable for leases
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AS long as the method are reasonable they count as valid acceptance.
Example: A seller sends telegram. Buyer responds via mail. Fine as long as goods are not perishable. |
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If offer to buy goods requires prompt shipment the offer is accepted if seller:
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1. Promptly promises to ship the goods.
2. Promptly ships either conforming or nonconforming goods. |
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When does acceptance of goods occur?
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Occurs when buyer has reasonable time to inspect them.
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What does acceptance signify? 3 parts:
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1. The goods are conforming.
2. he or she will retain goods in spite of nonconformity. 3. He or she fails to reject goods within a reasonable time after tender or delivery. |
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Accommodation Shipment
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A shipment of nonconforming goods does not constitute acceptance.
Ex. A buyer offers to buy 500 pink umbrellas. Seller says out of stock and ships 500 green umbrellas as an accommodation. The buyer can either accept or reject the counteroffer. |
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What are the Statute of frauds provisions that apply to all sales and lease contracts?
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1. all contracts for the sale of goods costing $500 or more must be in writing.
2. all lease contracts involving payments of 1000 or more must be in writing. |
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What are the 3 exceptions to the statute of frauds?
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1. Specially manufactured goods.
2. Admissions in pleadings or court. 3. Part acceptance. |
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Specifically manufactured goods
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If a contract to purchase or lease such goods is oral, the buyer or lessee may not assert the Statute of Frauds against the enforcement of the contract if 1. the goods are not suitable for sale of lease to others in the ordinary course of the seller's business. Or 2 the seller or lessor has made either a substantial beginning of the manufacture of the goods or commitments for their procurement.
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Admissions in pleadings or court
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If the party against whom enforcement is sought admits in pleadings, testimony, or otherwise in court that a contract for the sale or lease of the goods was made, the oral contract is enforceable against that party. Only to the quantity of goods admitted.
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Part acceptance and example
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An oral sales or lease contract that should otherwise have been in writing is enforceable to the extent to which the goods have been received and accepted by the buyer or lessee.
Ex. A lessor orally contracts to lease 20 cars to a lessee. The lessee accepts the first 8. This action is part acceptance. The lessee refuses to take delivery of the remaining 12. Lessee must pay for the 8 he took but not the 12 he didn't accept. |
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Parol evidence rule
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States that if a written contract is a complete and final statement of the parties agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the contract are inadmissible in court regarding a dispute over the contract.
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What if express terms are not clear and must be interpreted?
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In this case reference may be made to sources outside the contract.
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What is the order that things can be admitted under parol evidence?
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1. course of performance-previous conduct of parties regarding the contract in question.
2. Course of dealing-The conduct of the parties in prior transactions and contracts. 3. Usage of trade-Any practice or method in dealing that is regularly reserved in a place, a vocation, a trade, or an industry. |
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What does a W-4 ask?
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How many exemptions do you want to withhold?
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Are you an exemption?
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Yes, you get to deduct yourself on your tax return.
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What happens if you claim zero exemptions?
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The fewer exemptions you claim, the more federal withholdings they will take out. If you want a refund, file zero exemptions.
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What should you always check on your w-2?
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Your SSN because it is unique to you.
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What is federal wittholdings deducted from?
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Deducted from wages.
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Social security
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One for pension and one for medicare. This can exceed wages depending on the situation.
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3 tax forms individuals can file:
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1. 1040EZ
2. 1040A 3. 1040 |
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1040EZ
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Limited as to who can file. Only if single or married filing jointly with no kids.
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1040A
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Single, married filing jointly. Can use any of 5.
Much larger section for income recording. Spots to record wages, interest, dividends, unemployment. |
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What types of income can you record on a 1040EZ?
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Wages, interest and unemployment.
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