Law of Contracts

A sale is a voluntary transaction between two parties. Accordingly, most of the principles that apply to contractual agreements in general are equally applicable to a sale of goods.Modern marketing practices have modified the strict principles of contract law, and this approach is carried into the UCC. Thus , not only can a sale be made in any manner; but it is sufficient that the parties by their conduct recognize the existence of a contract, even though it can not be determined when the contract was made, and generally, even though one or more terms are left open.In most instances, the UCC treats all buyers and sellers alike. In some, it treats merchants differently than it does the occasional or casual buyer or seller. In this way, the UCC recognizes that the merchant is experienced and has a special knowledge of the relevant commercial practices.

OFFER

Contract law as to offers is applicable to a sales contract with the following exception. A firm offer by a merchant can not be revoked if 1) the offer expresses an intention that it will not be revoked, and is 2) in a writing, 3) signed by the merchant. An expressed period of irrevocability in the offer, cannot exceed three months. If nothing is said as to the duration of the offer, irrevocability continues only for a reasonable time. This firm offer exception applies without regard to whether the merchant received any consideration to keep the offer open.

ACCEPTANCE

An offer to buy or sell goods may be accepted in any manner and by any medium which is reasonable under the circumstances. However, if a specific manner or medium is clearly indicated by the terms of the offer or the circumstances of the case, the offer can only be accepted in that manner.Unless it is expressly specified that an offer to buy or sell goods must be accepted just as made, the offeree may accept an offer and at the same time propose an additional term. Contrary to the general common-law rule, the new term does not reject the original offer. A contract arises on the terms of the original offer and the new term is a counteroffer. If, however the offer states that it must be accepted exactly as made, the ordinary contract law rules apply. If the additional term is treated as a counteroffer, that term does not become binding until accepted by the original offeror.

DETERMINATION OF PRICE

The price for goods may be expressly fixed by the contract, or the parties may merely indicate how the price should be determined at a later time. When persons experienced in a particular industry make a contract without specifying the price to be paid the price will be determined by the manner which is customary in the industry. Ordinarily, if nothing is said as to price, the buyer is required to pay the reasonable value of the goods, which is generally the market price.Likewise, the contract may specify that the price shall be determined by some standard or by a third person.