California Sale of Goods Contract San Diego Details

The Uniform Commercial Code

In the United States, the purchase and sale of personal property is governed by Article 2 of the Uniform Commercial Code (UCC). As defined by the UCC, a sale is the passing of title to a buyer from a seller. Goods, as defined by the UCC, are items which at the time of identification in a contract are movable.

Forming a Contract

A contract for the sale of goods may be made in any matter providing evidence that a prospective buyer and prospective seller intended to make a contract. Such evidence must sufficiently show that one party made an offer to enter into a contract and the other party accepted that offer unconditionally.

When those negotiating are merchants, where merchants are defined as those engaged in the buying and selling of goods for profit and has expertise peculiar to the goods in which it deal, different rules apply to offer and acceptance than are applied to non-merchants.

Statute of Frauds

According to the UCC, a contract for the sale of goods priced at $500 or more is not enforceable unless there is a written agreement sufficient to indicate the existence of a contract between the parties, and the writing is signed by the person against whom enforcement is sought. The statute of frauds does not apply to sales of goods specially manufactured at the request of a buyer that are not saleable to anyone other than the buyer or if the goods have been accepted and paid for or received and accepted.

Terms and Conditions

The terms and conditions of a contract for the sale of goods may be negotiated by the parties to the agreement, provided no negotiated term violates the law governing the contract or public policy in the jurisdiction governing the contract. Some commonly negotiated terms are:

Price

A good contract should always include the price of the goods sold; however, if the contract is silent as to price or how to determine price, the UCC implies a reasonable price.

Payment Terms and Credit

The UCC establishes that payment is not due until the goods have been tendered to buyer by the seller at the place and time at which the buyer is to receive the goods.

Other terms beyond “Cash on Delivery” may be contractually established through negotiation between the buyer and seller.

Delivery

Unless otherwise specified, the buyer is financially responsible for goods in transit as well as any transportation charges and insurance to protect the value of the goods.

Acceptance

Unless a buyer takes active steps to reject nonconforming goods within a reasonable period of time, the buyer is deemed to have accepted the nonconforming goods at the contract price established for goods which would have been conforming. The buyer may have other remedies other than the right to revoke acceptance if the buyer fails to reject nonconforming goods in a reasonable period of time.

Warranties

Absent any form of disclaimer, the UCC holds that certain warranties exist. Implied in every contract is a warranty of merchantability and, under certain conditions, even implied warranties of fitness for a particular purpose.

Remedies for Breach of Contract

The UCC establishes the remedies available to parties in circumstances where the other party breaches the contract. Like almost all other terms and conditions, parties may negotiate for remedies different than those provided for by the UCC, provided no remedy be unconscionable or unreasonable in relationship to the anticipated or actual damage caused by the breach.

All contracts under the UCC have an implied obligation of good faith between the parties, and courts may refuse to enforce contracts which are unconscionable or contain unconscionable terms and conditions.