CHAPTER 13
Sales Contracts
13-1 Sales
13-2 Special Rules for Sales Contracts
Teacher Version
LAW for Business and Personal Use
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13-1 Sales
 GOALS
 Define sale and explain how the UCC governs
the sale of goods
 Explain how the UCC treats unconscionable
contracts and contracts of adhesion
The Law of Sales
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 2
WHAT IS A SALE?
A contract in which ownership of goods transfers immediately
from to seller to buyer for a price.
 Sales are governed by the UCC
Tangible, moveable items
of personal property:
airplanes
books
clothing
Not goods:
money
Intangible personal
property: legal rights
Patents, copyrights,
trademarks
Real property: land, bldg
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 3
Contracts that are NOT Sales:
 When primary purpose of contract is a
service
 Installation of good is dominant part of contract
 Goods supplied are merely incidental
 Payment and delivery: transfer/possession
 Bill of sale: written evidence; makes resale
easier (automobile)
 Use of credit: buyer gets title & possession at
same time
 Acceptance of goods: buyer agrees goods
conform
 Other ways to contract: just ship goods
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 4
Indicate acceptance in the
following sales:
 Purchase of a car
 Purchase of a meal in a restaurant
 Purchase of a meal from a drive-thru
 Signing contract
 Consuming food in the restaurant
 Payment at drive-thru window
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 5
UNCONSCIONABLE SALES
CONTRACTS
 Offends an honest person’s conscience and
sense of justice
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 6
UNCONSCIONABLE SALES
CONTRACTS
 Contracts of adhesion
 One party dictates terms
 Leaves weaker party with take-it or leave-it option
 What’s Your Verdict? Page 238
 Section 13-1 Assessment page 239 1-8
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 7
Who is Correct?
John Leonard vs PepsiCo
Pepsi Points – DRINK PEPSI-GET STUFF
PepsiCo Ad
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 8
13-2
Special Rules for Sales
Contracts
 GOALS
 Compare the status of a casual seller with a
merchant
 Explain how the Statute of Frauds is applied to
sales
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 9
SPECIAL RULES FOR
MERCHANTS
 What’s Your Verdict? Page 240
 What is a merchant?
 Proposals for additions to sales offers
 Not a counteroffer
 New terms are proposals
 New term (offeree) becomes part of contract
unless offeror fails to object
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 10
HOW DOES THE STATUTE OF
FRAUDS APPLY TO SALES?
 Exceptions to the Statute of Frauds for sales
contracts
 Goods received and accepted by the buyer
 Buyer pays for goods and seller accepts payment
 Goods specially made not suitable for sale to
others
 Party against whom enforcement sought admits
oral contract made
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 11
PREVENT
LEGAL
DIFFICULTIES
 In sales, be aware that . . .
 During your lifetime, you will probably enter into
more sales contracts than any other type of
contract—as both buyer and seller. Knowledge of
the law of sales will help you to make successful
transactions.
 Your best protection against poor quality
merchandise is knowledge of goods and their
value, followed by careful comparison shopping.
Continued on the next slide
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© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 12
PREVENT
LEGAL
DIFFICULTIES
 Your best protection against sales fraud is the
integrity of the seller (as reflected in the seller’s
established reputation) coupled with your caution.
 When you make a major purchase, make sure
your insurance is adequate. It should provide for
coverage against possible loss of valuable
purchased property beginning at the time of
purchase. If appropriate (as in automobile
purchases), it also should provide protection
against possible liability for injury to others.
Continued on the next slide
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 13
PREVENT
LEGAL
DIFFICULTIES
 It is a good idea to put a sales agreement in
writing even if it is for goods worth less than
$500. Although this is not required by the Statute
of Frauds, doing so can avoid misunderstandings
and prevent costly litigation. If the goods are
worth $500 or more, insist on compliance with the
Statute of Frauds.
 To have an enforceable writing be sure the other
party signs the contract or memorandum and
gives you a copy. The other party may properly
require that you do likewise.
Continued on the next slide
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 14
PREVENT
LEGAL
DIFFICULTIES
 You are bound by oral contracts for goods priced
at $500 or more if you have received them and
accepted delivery. You may be bound in full or in
part if you have made some payment. You usually
are bound when you order custom-made goods.
 For expensive items, you should get a bill of sale
marked “paid in full” when you pay the full price.
LAW for Business and Personal Use
Chapter 13
© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 15