BUL3310 Exam 3 Study Guide | UCC,
Sales Contracts & Merchant Rules
Verified Questions Provided with A+
Graded Rationales Latest Updated 2026
Purpose of the UCC
To promote commercial efficiency and the completion of business transactions by providing
simple & standardized procedures that merchants and consumers can rely on
Default Rules
A rule of law designed to fill "gaps" in business contracts, that is, unexpected or unforeseen
situations that might occur after a deal is done
• Can be modified by agreement of the parties
Gaps in Contracts
risks or circumstances that aren't specifically addressed in a contract
UCC Article 2 Coverage
• applies only to agreements for the sale/lease of goods
• preempts common law when dealing with the sale of goods
What is not covered by UCC article 2?
real estate or employment contracts
Goods (as defined by UCC Article 2)
property that is:
1. tangible
2. movable
Merchant (as defined by UCC)
○ Anyone who regularly engages in the sale of goods; anyone who employs a merchant
○ UCC imposes additional duties on merchant sellers (such as warranties)
In a case where a contract is used for BOTH goods AND services, what is done?
courts use the predominant purpose test (what is the predominant purpose of the contract?)
Is UCC less rigid or more rigid than common law?
,less rigid (more flexible)
What are the "additional protections" for consumers provided by the UCC
• less rigid than common law, relaxes "mirror image" rule; makes it easier to form a contract
• provides additional warranties for consumers where none exist at common law (ex.
merchantability, fitness for duty, etc.)
Offers with Open Terms
-quantity
-delivery
-payment
-price
What are the exceptions when quantity can be left open in a contract?
- Output Contract
- Requirements Contract
Acceptance under the UCC
• if an offeror does not clearly provide for a method of acceptance, UCC allows an offeree to
accept the offer in any "reasonable" manner
• acceptance may still be effective even if the acceptance doesn't match the offer
• mirror image rule doesn't apply
Consideration under the UCC
• UCC Contracts must be supported by consideration just like in Common Law
• However, UCC allows contracts to be modified without any additional consideration
Battle of the Forms
when two businesses are negotiating the terms of a contract and each party wants to contract
on the basis of its own terms
Who wins Battle of the Forms? (Nonmerchant Transactions)
• the contract is formed as originally offered
• the contract is considered accepted, but additional terms are not a part of the contract
Who wins Battle of the Forms? (Merchant Transactions)
, • additional terms automatically become part of the contract
• if terms conflict, most states apply the Knockout Rule: conflicting causes knock each other
out, the UCC's default rules fill the gap
In Merchant Transactions, additional terms automatically become a part of the contract
(battle of the forms) UNLESS:
• the offeror has clearly and expressly limited acceptence to original terms such as "the terms
of this order may not be altered"
• additional term is a material change that diverges significantly from those contained in the
offer
• offeror raises an objection to additional terms within reasonable time period
Statute of Frauds under UCC
• Requires sales contracts to be in writing if goods total $500 or more
• more flexible than common law
What are the 3 requirements of the Statute of Frauds under the UCC?
1. quantity
2. signature of party against whom it will be enforced
3. language allowing a reasonable person to conclude there was an intent to form a contract
Are electronic signatures recognized in sales contracts by the UCC?
yes, they are recognized
What does Article 2A of UCC Cover?
Leases
Lease
a transfer of right to possession and use of goods for a term in return for consideration; does
not transfer title from seller to buyer
UCC Article 2A Coverage
• applies to lease of goods; does not apply to lease of real estate
Lessor
the party who owns leased goods and who makes them available for lease for a period of
time
Sales Contracts & Merchant Rules
Verified Questions Provided with A+
Graded Rationales Latest Updated 2026
Purpose of the UCC
To promote commercial efficiency and the completion of business transactions by providing
simple & standardized procedures that merchants and consumers can rely on
Default Rules
A rule of law designed to fill "gaps" in business contracts, that is, unexpected or unforeseen
situations that might occur after a deal is done
• Can be modified by agreement of the parties
Gaps in Contracts
risks or circumstances that aren't specifically addressed in a contract
UCC Article 2 Coverage
• applies only to agreements for the sale/lease of goods
• preempts common law when dealing with the sale of goods
What is not covered by UCC article 2?
real estate or employment contracts
Goods (as defined by UCC Article 2)
property that is:
1. tangible
2. movable
Merchant (as defined by UCC)
○ Anyone who regularly engages in the sale of goods; anyone who employs a merchant
○ UCC imposes additional duties on merchant sellers (such as warranties)
In a case where a contract is used for BOTH goods AND services, what is done?
courts use the predominant purpose test (what is the predominant purpose of the contract?)
Is UCC less rigid or more rigid than common law?
,less rigid (more flexible)
What are the "additional protections" for consumers provided by the UCC
• less rigid than common law, relaxes "mirror image" rule; makes it easier to form a contract
• provides additional warranties for consumers where none exist at common law (ex.
merchantability, fitness for duty, etc.)
Offers with Open Terms
-quantity
-delivery
-payment
-price
What are the exceptions when quantity can be left open in a contract?
- Output Contract
- Requirements Contract
Acceptance under the UCC
• if an offeror does not clearly provide for a method of acceptance, UCC allows an offeree to
accept the offer in any "reasonable" manner
• acceptance may still be effective even if the acceptance doesn't match the offer
• mirror image rule doesn't apply
Consideration under the UCC
• UCC Contracts must be supported by consideration just like in Common Law
• However, UCC allows contracts to be modified without any additional consideration
Battle of the Forms
when two businesses are negotiating the terms of a contract and each party wants to contract
on the basis of its own terms
Who wins Battle of the Forms? (Nonmerchant Transactions)
• the contract is formed as originally offered
• the contract is considered accepted, but additional terms are not a part of the contract
Who wins Battle of the Forms? (Merchant Transactions)
, • additional terms automatically become part of the contract
• if terms conflict, most states apply the Knockout Rule: conflicting causes knock each other
out, the UCC's default rules fill the gap
In Merchant Transactions, additional terms automatically become a part of the contract
(battle of the forms) UNLESS:
• the offeror has clearly and expressly limited acceptence to original terms such as "the terms
of this order may not be altered"
• additional term is a material change that diverges significantly from those contained in the
offer
• offeror raises an objection to additional terms within reasonable time period
Statute of Frauds under UCC
• Requires sales contracts to be in writing if goods total $500 or more
• more flexible than common law
What are the 3 requirements of the Statute of Frauds under the UCC?
1. quantity
2. signature of party against whom it will be enforced
3. language allowing a reasonable person to conclude there was an intent to form a contract
Are electronic signatures recognized in sales contracts by the UCC?
yes, they are recognized
What does Article 2A of UCC Cover?
Leases
Lease
a transfer of right to possession and use of goods for a term in return for consideration; does
not transfer title from seller to buyer
UCC Article 2A Coverage
• applies to lease of goods; does not apply to lease of real estate
Lessor
the party who owns leased goods and who makes them available for lease for a period of
time
