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Formation of Contracts under UCC Article 2

This lesson deals with the formation of contracts under Article 2 of the Uniform Commercial Code (excluding § 2-207 issues). Under UCC § 2-204, a contract can be formed in any manner sufficient to show agreement, even if the parties leave open terms. This lesson will explore the effect of the difference in formation between common law and Article 2.

You can work this lesson as an introduction to the formation of contracts under the UCC or as a review. The material in this lesson may be a more in-depth study of Article 2 than some first year contracts courses require. However, prior to working this lesson, you should have an understanding of the common law on offer, acceptance and mutual assent.

Learning Outcomes

On completion of the lesson, the student will be able to:

  1. Explain when UCC Article 2 applies to a transaction.
  2. Distinguish between formation of a contract under the common law and formation under Article 2.
  3. Recognize when shipment is a reasonable method of acceptance.
  4. Recognize when a "firm offer" has been made.
  5. Distinguish between modification under the common law and modification under Article 2.
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