Business Law: Contracts

Common law vs Uniform Commercial Code (UCC) (goods)

Issue	Common law	UCC
Added terms in acceptance	Counteroffer (mirror image)	Still acceptance; merchant rules
Modification	Needs consideration	No consideration (good faith)
Irrevocable offer	Option with consideration	Merchant's signed written firm offer, ≤ 3 months
Performance	Substantial performance	Perfect tender, right to cure

Timing

Acceptance: on dispatch. Revocation and rejection: on receipt.

Statute of frauds — "MY LEGS"

Marriage · more than 1 Year · Land · Executor · Goods ≥ $500 · Surety. Merchant confirmation: object within 10 days.

Capacity

Minor: voidable by minor; ratify after majority. Adjudicated insane: void.

Remedies

Compensatory · consequential (foreseeable) · liquidated (not a penalty) · specific performance (unique goods, land; not services) · duty to mitigate · buyer's cover.

Risk of loss

Free on board (FOB) shipping point → buyer at carrier. FOB destination → buyer at tender. Breaching party bears risk.

Exam traps

• Past consideration is not consideration — a promise to pay for something already done is unenforceable.
• Silence is not acceptance, unless prior dealings or the parties' agreement make it so.
• The parol evidence rule bars earlier or simultaneous terms that contradict a final written contract — not later modifications, or evidence of fraud.
• Acceptance of an option is effective on receipt, not dispatch.