Sales Law: Domestic and International » (2nd Edition)

Authoritative coverage describes and analyzes the law of sales under Article 2 of the Uniform Commercial Code, as well as under the United Nations Convention on Contracts for the International Sale of Goods. Text provides the framework for sales and governing law, contract formation, implied terms, formal requirements, performance, and risk of loss. Also covers remedies, the rights to goods, and documentary sales.

Preface v

Table of Contents ix

Chapter 1 Introduction to Sales Law 1

I Introduction to the Statutory Development of Commercial Law 1

A Article 2 of the UCC 1

B The United Nations Convention on Contracts for the International Sale of Goods 5

II Principles of Sales Contracts - Herein of Default Rules 10

III Commercial Contracts as Discrete and Relational Contracts - Herein of Reputation 15

A Reputation and Relational Contracts 15

B Reputation Without Repetition 17

Chapter 2 Governing Law 21

I Scope of Sales Law Under Article 2 21

A Choice of Law Under the UCC 21

B Transactions within Article 2: Definition of "Goods" 23

C Merchants 27

D Mixed Sales and Services, Software 30

E Leases and Other Transactional Forms 35

II The Scope of the CISG 40

A Choice of Law under the CISG 40

B Types of Transactions Subject to the CISG 49

C Exclusions 51

D Mixed Sales and Service Contracts 53

E Leases 55

F The Principle of Issue-Displacement 56

Chapter 3 Formation of the Contract 59

I Introduction: The Evaluation of Formation Rules 59

II Offer and Acceptance 62

A Article 2's Approach to Formation Rules 62

B Irrevocable Offers Under Article 2 65

C The CISG's Formation Rules 69

1 Opting Out of the CISG's Formation Rules 69

2 The CISG's Formation Rules Illustrated: Six Hypotheticals 70

III Offer-Varying Acceptance: The Battle of the Forms 76

A Under Article 2 76

1 Introduction 76

2 Problems in [section] 2-207's Interpretation 79

B Under the CISG 85

C Section 2-207 and Article 19 Evaluated 91

D Rolling Contracts and Article 2 93

IV Modification 98

A Under Article 2 98

B Under the CISG 105

Chapter 4 Implied Terms113

I Trade Usage, Course of Dealing, Course of Performance 113

A Under the UCC 113

B Under the CISG 120

II Open Terms 125

A Open Price Terms Under the CISG 129

B Open Quantity Terms 134

C Evaluating Supplied Terms: Herein of "Best Efforts" 139

Chapter 5 Formal Requirements 151

I Introduction: Permissive Rules, Mandatory Rules, and Externalities 151

II The Statute of Frauds 153

A Introduction 153

B Justifying the Statute of Frauds 155

C Article 2's Statute of Frauds 157

1 Section 2-201's Statutory Requirements 157

2 Exceptions to the Statute of Frauds 161

3 Ethics and the Statute of Frauds 166

D The CISG and the Statute of Frauds 168

III The Parol Evidence Rule 173

A Article 2's Parol Evidence Rule: [section] 2-202 Outlined 173

B Excluding Trade Usage 176

1 Two Standards of Contradiction 176

2 The Process of Exclusion 179

C Warranties and the Parol Evidence Rule 180

D The CISG and the Parol Evidence Rule 183

1 Is the Parol Evidence Rule Displaced? 183

2 Contracting for the Parol Evidence Rule 188

IV Unconscionability 189

A Under the UCC 189

1 Section 2-302's Standard of Unconscionability 190

2 Unconscionability Applied 192

3 Unconscionability Evaluated 197

B The CISG and the Domestic Law of Unconscionability 198

Chapter 6 Performance 203

I Introduction: Allocating Losses and Monitoring Performance 203

II Insecurity and Adequate Assurances of Performance 205

A Under the UCC 205

1 Introduction 205

2 Demand for Adequate Assurances 207

3 Reasonable Grounds for Insecurity 208

4 Adequate Assurances of Performance 210

B Suspending Performance Under the CISG 211

III Anticipatory Repudiation 214

A Under the UCC 214

B Under the CISG 218

IV Tender, Acceptance, Rejection, Cure Under the UCC 219

A Tender and Inspection 219

B Inspection in Documentary Transactions 222

C Acceptance and Rejection 226

1 Introduction: Neutralizing Strategic Behavior 226

2 Perfect Tender 228

3 What Constitutes Acceptance? 231

a Burden of Proof Concerning Defects 233

b Acts Inconsistent With Seller's Ownership 234

4 Buyer's Obligations on Rejection 237

D Cure 240

1 Introduction 240

2 Technical Requirements 241

3 Curing with a Conforming Tender 243

4 Cure in the Courts: Repair and Interpretation 245

E Revocation of Acceptance 249

1 Introduction 249

2 Substantial Impairment "to Him" 255

3 Post-Revocation Cure 258

V Inspection, Avoidance, and Cure under the CISG 260

A Inspection and Notice of Defects 260

B Cure and Avoidance Under the CISG 264

C The Burden of Proving Nonconformity Under the CISG 270

VI Excuse 274

A Introduction 274

B Under the UCC 275

C Under the CISG 282

Chapter 7 Risk of Loss 293

I Introduction: Loss Allocation in Transactional Settings 293

II Risk of Loss Under the UCC 294

A Risk of Loss Where Seller Retains the Goods 295

B Risk of Loss Where Goods are Held by a Bailee 296

C Risk of Loss During Transit 299

D Opting Out of Risk of Loss Provisions 303

E Risk of Loss in the Event of Breach 305

III Risk of Loss Under the CISG 308

A When Does Risk of Loss Pass? 308

B Risk of Loss in the Event of Breach 314

C Burden of Proof 316

Chapter 8 Warranties 317

I Introduction: Allocating the Risk of Quality 317

II Warranties Under the UCC 320

A Express Warranties 320

1 Who Can Make the Warranty? 320

2 How is the Warranty Created? 320

a Basis of the Bargain 324

b Advertising and Warranty 327

c Post-Bargain Warranties 330

B Implied Warranty of Fitness for a Particular Purpose 331

1 Who Can Make the Warranty? 331

2 How is the Warranty Created? 331

C Implied Warranty of Merchantability 333

1 Who Can Make the Warranty? 333

2 How is the Warranty Created? 335

D Disclaiming Warranties 342

1 Should Warranties be Disclimable? 342

2 Disclaiming Warranties Under [section] 2-316 344

E Who Receives the Benefit of Warranties? Herein of Privity and Personal Injury 347

F Federal Law and UCC Warranties of Quality 351

1 Introduction 351

2 The Magnusson-Moss Warranty Act 351

3 Preemption by Federal Law 356

G Warranty of Good Title 358

III "Warranties" Under the CISG 361

Chapter 9 Remedies 369

I Introduction: Allocating the Loss of Transactional Breakdown 369

II Money Damages 372

A Under the UCC 372

1 Substitute Performance: Resale and Cover Under [section] 2-706(1) and [section] 2-712(1) 372

2 Market Price Damages 378

a Proof Costs 378

b Election of Remedies 381

3 Lost Profits: [section] 2-708(2) 386

a Measuring Lost Profits 387

b Recovering Lost Profits Under [section] 2-708(2) 389

4 The Accepting Buyer's "Value Difference" 395

a [section] 2-714(2)'s Measure of "Value" 395

b The Relation Between [section] 2-714(1) and (2) 395

c Measuring Damages for Breach of Warranty of Title 400

B Under the CISG 403

1 Substitute Performance: Article 75 406

2 Market Price Damages: Article 76 408

3 Reduction of the Price 410

a Article 50's Formula 410

b Article 50's Use 412

c Why Allow Price Reduction? 413

4 Interest and its Calculation 415

III Specific Relief 418

A Under the UCC 418

1 Seller's Action for the Price 418

a [section] 2-709's Technical Requirements 418

b [section] 2-709's Justification 420

2 Specific Performance 422

B Under the CISG 428

1 The Routine Availability of Specific Relief 428

2 Article 28's Restriction of Specific Relief 429

IV Contractually Stipulated Remedies 432

A Liquidated Damages 432

B Remedy Limitations and Damage Exclusions 437

1 Allocating Risk of Nonconformity 437

2 The Relation Between Damage Exclusions and Remedy Limitations 440

C The CISG: Liquidated Damages, Remedy Limitations, and Damage Exclusions 443

Chapter 10 Right to Goods: Bona Fide Purchase and Reclamation 447

I Good Faith Purchase Rules 447

A The Nemo Dat Principle and Its Exceptions 447

B The Reach of "Voluntary Transaction" 453

C "Entrustment" and the Passage of Title 454

II Seller's Right to Recover and Reclaim Goods 457

III Goods-Oriented Remedies Under the CISG 461

Chapter 11 Documentary Sales 465

I Introduction: Allocating Performance Risks 465

II Payment Terms: Letters of Credit and Payment Risks 467

A Introduction 467

B Formal Requirements 473

C Issuer's Duty to Pay: Strict Compliance Standard 475

D Issuer's Duty to Pay: Waiver, Estoppel and Preclusion 484

III The Issuer's Right Not To Pay: The Independence Principle and the Fraud Exception 492

A The Independence Principle 492

B The Fraud Exception 493

1 Two Types of Fraud 494

2 What is Fraud? 497

3 The Protected Class of Presenters: [section] 5-109(a)(1) 501

C Justification 507

1 Justifying [section] 5-109(a)(1)'s Protection 507

2 Justifying the Fraud Exception 511

Table of Cases 517

Index 525