Quiz 15: The Formation of Sales and Lease Contracts

Business

The Article of the UCC manages the contracts based on the sales or it manages those contracts that are concerned with the transaction of various goods. For the facilitation of the transactions, which are for profit making purposes, Article 2 makes amendments in some of the contract requirements based on common laws. The main point of focus over here is that the Article 2 is concerned directly with the sale of the goods and it is not concerned with the real property, it doesn't deal with services or even the stocks or the bonds that are known as the intangible property. The Article 2A of the UCC manages the leases. Nowadays the leases that are concerned with the goods have become very widespread. Lease can actually be explained as the transferring of the right for the utilisation of a good that a person possesses for payment for a particular period of time. The particular transactions that are concerned with the Article 2 are the ones that will create a lease for a particular good and along with that a sublease for the good will also be created. Article 2 is usually applied to the lease rather than to the sale of the particular good. Article 2 A is a replication of the article 2 and it is different only when it has to reveal the difference that exists between the lease and the sales transactions.

In the present scenario, the FF vs. VE, the trial court should probably find whether VE had completed the part of transaction as it is already paid as a result of partial performance. The Statute of Frauds requires that any contract for the sale of goods priced at $500 or more must be in written form of enforceability. The fact of the case is, VE has accepted an oral partial payment for the goods promised by the company. Hence, the part of the agreement was enforceable where VE should deliver 100 bushels of corn to FF at 1.25 per bushel.

The Uniform Commercial Code aims to provide a consistent, integrated framework of rules to deal with commercial sales or lease transactions by making the laws governing sales and contracts of lease uniform, clear and simple. Sale and lease contracts are governed by statutory laws. When a contract of lease or sale is breached the risk is born by the defaulting party and shall be liable for the any loss that may be incurred. UCC is applicable on any transaction, regardless of form that creates the lease. Most of the rules of commercial lease contracts are in Article 2A. Article 2A deals with personal property leasing. The court would likely decide that the Uniform Commercial Code (UCC) covered the transaction. Further, it was based on the fact that the UCC assists and governs commercial transactions by imposing laws relating to sales and lease contracts in a more uniform way, in a much simpler and clearer way, and it should be more willingly applicable to the many problems that may crop up during such transactions. As per the UCC any individual who undertakes the sale or purchase of a good and makes use of expertise related to the good in question. Merchant means a person who deals in goods or of like nature by way of his occupation, having such knowledge or skill required for the good in question. Mr H could be considered a merchant as he was in the adult entertainment business, and attempted to create a ecosystem for improving the original business by offering customers 'adult theme videos and live chat sessions with the performers of the club'. Mr. H entered into a contract in which he wanted a working prototype of a customer chat system for his business. Later on Mr H got some firewalls installed on his system, which required Mr H to pay the instalments monthly, but the anticipated deadline could not be met due to the unforeseen incidents. As the work had not been completed and Mr H did not pay the instalments on time, this led to serious trouble, keeping everything in mind now Mr H wanted to end the project. When the parties involved in a contract fail completely to provide contingency in their respective contracts and later on end up in a big dispute, UCC comes into play. This transaction is thus not governed by the common law and comes under the statutory law (the UCC). A statutory law is the acceptance of a uniform act by the state legislature, then immediately the act is considered a statutory law in that state. UCC has relaxed the requirement of contracts to be in written form to satisfy the statute of frauds. As per UCC 2-201(3) agreement and 2A-201(4) lease contract , an oral contract for the sale of goods priced at $500 or more or the lease of goods having $1,000 or above payment shall be enforceable even if there is no written contract. The Uniform Commercial Code administers the oral contracts enforceability in dealings of sales concerning sellers. An oral contract is enforceable (unless it comes within the statute of frauds). An oral contract is just as valid as a written agreement. An oral contract can be proved by action taken by one or both parties, which is obviously in reliance on the existence of a contract. In the present case, the oral agreement will be enforceable.

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