UNIFORM
COMMERCIAL CODE - CHAPTERS 1-2
Table of Contents [all chapters of the Uniform Commercial Code]
Chapter
1 - General Provisions
Part
1. Short Title, Construction, Application and Subject Matter of the
Act
1-101.
Short Title
1-102. Purposes; Rules of Construction; Variation by Agreement
1-103. Supplementary General Principles of Law Applicable
1-104. Construction Against Implicit Repeal
1-105. Territorial Application of the Act; Parties' Power to Choose
Applicable Law
1-106. Remedies to Be Liberally Administered
1-107. Waiver or Renunciation of Claim or Right After Breach
1-108. Severability
1-109. Section Captions
Part 2. General Definitions and Principals of Interpretation
1-201.
General Definitions
1-202. Prima Facie Evidence by Third Party Documents
1-203. Obligation of Good Faith
1-204. Time; Reasonable Time; "Seasonably"
1-205. Course of Dealing and Usage of Trade
1-206. Statute of Frauds for Kinds of Personal Property Not Otherwise
Covered
1-207. Performance or Acceptance Under Reservation of Rights
1-208. Option to Accelerate at Will
1-209. Subordinated Obligations
Chapter 2 - Sales
Part
1. Short Title, General Construction and Subject Motion
2-101.
Short Title
2-102. Scope; Certain Security and Other Transactions Excluded From
This Code
2-103. Definitions and Index of Definitions
2-104. Definitions: "Merchant"; "Between Merchants";
Financing Agency "
2-105. Definitions: Transferability; "Goods"; "Future"
Goods; "Lot"; "Commercial Unit"
2-106. Definitions: "Contract"; "Agreement"; "Contract
for Sale"; "Sale"; "Present Sale"; "Conforming"
to Contract;
Termination"; "Cancellation"
2-107. Goods to Be Severed From Realty: Recording
Part
2. Form, Formation and Readjustment of Contract
2-201.
Formal Requirements; Statute of Frauds
2-202. Final Written Expression: Parol or Extrinsic Evidence
2-203. Seals Inoperative
2-204. Formation in General
2-205. Firm Offers
2-206. Offer and Acceptance in Formation of Contract
2-207. Additional Terms in Acceptance or Confirmation
2-208. Course of Performance or Practical Construction
2-209. Modification, Rescission and Waiver
2-210. Delegation of Performance; Assignment of Rights
Part
3. General Obligation and Construction of Contract
2-301.
General Obligations of Parties
2-302. Unconscionable Contract or Clause
2-303. Allocation or Division of Risks
2-304. Price Payable in Money, Goods, Realty, or Otherwise
2-305. Open Price Term
2-306. Output, Requirements and Exclusive Dealings
2-307. Delivery in Single Lot or Several Lots
2-308. Absence of Specified Place for Delivery
2-309. Absence of Specific Time Provisions; Notice of Termination
2-310. Open Time for Payment or Running of Credit; Authority to Ship
Under Reservation
2-311. Options and Cooperation Respecting Performance
2-312. Warranty of Title and Against Infringement; Buyer's Obligation
Against Infringement
2-313. Express Warranties by Affirmation, Promise, Description, Sample
2-314. Implied Warranty: Merchantability; Usage of Trade
2-315. Implied Warranty: Fitness for particular Purpose
2-316. Exclusion or Modification of Warranties
2-317. Cumulation and Conflict of Warranties Express or Implied
2-318. Third Party Beneficiaries of Warranties Express or Implied
2-319. F.O.B. and F.A.S. Terms
2-320. C.I.F. and C.&F. Terms
2-321. C.I.F. or C. &F.: "Net Landed Weights"; "Payment
on Arrival"; Warranty of Condition on Arrival
2-322. Delivery " Ex-Ship"
2-323. Form of Bill of Lading Required in Overseas Shipment; "Overseas".
"No Arrival, No Sale" Term
2-324. "No Arrival, No Sale" Term
2-325. "Letter of Credit" Term; "Confirmed Credit"
2-326. Sale on Approval and Sale or Return; Consignment Sales and Rights
of Creditors
2-327. Special Incidents of Sale on Approval and Sale or Return
2-328. Sale by Auction
Part
4. Title, Creditors and General Faith Purchases
2-401.
Passing of Title; Reservation for Security; Limited Application of this
Section
2-402. Rights of Seller's Creditors Against Sold Goods
2-403. Power to Transfer; Good Faith Purchase of Goods; "Entrusting"
Part
5. Performance
2-501.
Insurable Interest in Goods; Manner of Identification of Goods
2-502. Buyer's Right to Goods on Seller's Insolvency
2-503. Manner of Seller's Tender of Delivery
2-504. Shipment by Seller
2-505. Seller's Shipment Under Reservation
2-506. Rights of Financing Agency
2-507. Effect of Seller's Tender; Delivery on Condition
2-508. Cure by Seller of Improper Tender or Delivery; Replacement
2-509. Risk of Loss in the Absence of Breach
2-510. Effect of Breach on Risk of Loss
2-511. Tender of Payment by Buyer. Payment by Check
2-512. Payment by Buyer before Inspection
2-513. Buyer's Right to Inspection of Goods
2-514. When Documents Deliverable on Acceptance; When on Payment
2-515. Preserving Evidence of Goods in Dispute
Part
6. Breach, Repudiation and Excuse
2-601.
Buyer's Rights on improper Delivery
2-602. Manner and Effect of Rightful Rejection
2-603. Merchant Buyer's Duties as to Rightfully Rejected Goods
2-604. Buyer's Options as to Salvage of Rightfully Rejected Goods
2-605. Waiver of Buyer's Objections by Failure to Particularize
2-606. What Constitutes Acceptance of Goods
2-607. Effect of Acceptance; Notice of Breach; Burden of Establishing
Breach After Acceptance; Notice of Claim or Litigation to Person Answerable
Over
2-608. Revocation of Acceptance in Whole or in Part
2-609. Right to Adequate Assurance of Performance
2-610. Anticipatory Repudiation
2-611. Retraction of Anticipatory Repudiation
2-612. "Installment Contract"; Breach
2-613. Casualty to Identified Goods
2-614. Substituted Performance
2-615. Excuse by Failure of Presupposed Conditions
2-616. Procedure on Notice Claiming Excuse
Part
7. Remedies
2-701.
Remedies for Breach of Collateral Contracts Not Impaired
2-702. Seller's Remedies on Discovery of Buyer's Insolvency
2-703. Seller's Remedies in General
2-704. Seller's Right to Identify Goods to the Contract Notwithstanding
Breach or to Salvage Unfinished Goods
2-705. Seller's Stoppage of Delivery in Transit or Otherwise
2-706. Seller's Resale Including Contract for Resale
2-707. "Person in the Position of a Seller"
2-708. Seller's Damages for Non-acceptance or Repudiation
2-709. Action for the Price
2-710. Seller's Incidental Damages
2-711. Buyer's Remedies in General; Buyer's Security Interest in Rejected
Goods
2-712. "Cover"; Buyer's Procurement of Substitute Goods
2-713. Buyer's Damages for Non-Delivery or Repudiation
2-714. Buyer's Damages for Breach in Regard to Accepted Goods
2-715. Buyer's Incidental and Consequential Damages
2-716. Buyer's Right to Specific Performance or Replevin
2-717. Deduction of Damages From the Price
2-718. Liquidation or Limitation of Damages; Deposits
2-719. Contractual Modification or Limitation of Remedy
2-720. Effect of "Cancellation" or "Rescission"
on Claims for Antecedent Breach
2-721. Remedies for Fraud
2-722. Who Can Sue Third Parties for Injury to Goods
2-723. Proof of Market Price: Time and Place
2-724. Admissibility of Market Quotations
2-725. Statute of Limitations in Contracts for Sale
Article 2-A - Leases
CHAPTER 1 - GENERAL PROVISIONS
1-101. SHORT TITLE
This Code
shall be known and cited as the Oneida Indian Nation Uniform Commercial
Code.
1-102. PURPOSES; RULES OF CONSTRUCTION; VARIATION BY AGREEMENT
(1) This
Code shall be liberally construed and applied to promote its underlying
purposes and policies.
(2) The
underlying purposes and policies of this Code are
(a)
to simplify, clarify and modernize the law governing commercial
transactions;
(b)
to permit the continued expansion of commercial practices through
custom, usage and agreement of the parties;
(c)
to make Oneida Indian Nation law uniform with the law among the
various jurisdiction.
(d)
to promote respect for the customs, traditions and culture of the
Oneida Indian Nation, while promoting economic development within
the territorial jurisdiction of the Oneida Indian Nation.
(3) The
effect of provisions of this Code may be varied by agreement, except
as otherwise provided in this Code and except that the obligations
of good faith, diligence, reasonableness and care prescribed by this
Code may not be disclaimed by agreement but the parties may by agreement
determine the standards by which the performance of such obligations
is to be measured if such standards are not manifestly unreasonable.
(4) The
presence in certain provisions of this Code of the words "unless
otherwise agreed" or words of similar import does not imply that
the effect of other provisions may not be varied by agreement under
subsection (3).
(5) In
this Code unless the context otherwise requires:
(a)
words in the singular number include the plural, and in the plural
include the singular;
(b)
words in the masculine gender include the feminine and the neuter,
and when the sense so indicates words of the neuter gender may refer
to any gender.
1-103. SUPPLEMENTARY GENERAL PRINCIPLES OF LAW APPLICABLE
Unless
displaced by the particular provisions of this Code, the principles
of law and equity, including the law of merchant and the law relative
to capacity to contract, principal and agent, estoppel, fraud, misrepresentation,
duress, coercion, mistake, bankruptcy, or other validating or invalidating
cause shall supplement its provisions.
1-104. CONSTRUCTION AGAINST IMPLICIT REPEAL
This Code
being a general Code intended as a unified coverage of its subject matter,
no part of it shall be deemed to be impliedly repealed by subsequent
legislation if such construction can reasonably be avoided.
1-105. TERRITORIAL APPLICATION OF THE CODE; PARTIES' POWER TO CHOOSE
APPLICABLE LAW
Except
as provided hereafter in this section, when a transaction bears a reasonable
relation to the Oneida Indian Nation and also to another state or Indian
Nation the parties may agree that the law either of the Oneida Indian
Nation or of such other state or Indian Nation shall govern their rights
and duties. Failing such agreement this Code applies to transactions
bearing an appropriate relation to the Nation.
Where one
of the following provisions of this Code specified the applicable law,
that provision governs and a contrary agreement is effective only to
the extent permitted by law (including the conflict of laws rules) so
specified:
Rights
of creditors against sold goods. Section 2-402
Applicability
of the Chapter on leases. Sections 2-A-105 and 2-A-106.
1-106. REMEDIES TO BE LIBERALLY ADMINISTERED
(1) The
remedies provided by this Code shall be liberally administered to
the end that the aggrieved party may be put in as good a position
as if the other party had fully performed but neither consequential
or special nor penal damages may be had except as specifically provided
in this Code or by other rule of law.
(2) Any
right or obligation declared by this Code is enforceable by action
unless the provision declaring it specifies a different and limited
effect.
1-107. WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER BREACH
Any claim
or right arising out of a n alleged breach can be discharged in whole
or in part without consideration by a written waiver or renunciation
signed and delivered by the aggrieved party.
1-108. SEVERABILITY.
If any
provision or clause of this Code or application thereof to any person
or circumstances is held invalid, such invalidity shall not affect other
provisions or applications of the Code which can be given effect without
the invalid provision or application, and to this end the provisions
of this Code are declared to be severable.
1-109. SECTION CAPTIONS
Section
captions are parts of this Code.
PART 2. GENERAL DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1-201. GENERAL DEFINITIONS
Subject
to additional definitions contained in the subsequent chapters of this
Code which are applicable to specific Codes or parts thereof, and unless
the context otherwise requires, in this Code:
(1) "Action"
in the sense of a judicial proceeding includes recoupment, counterclaim,
set-off, suit in equity and any other proceedings in which rights
are determined.
(2) "Aggrieved
party" means a party entitled to resort to a remedy.
(3) "Agreement"
means the bargain of the parties in fact as found in their language
or by implication from other circumstances including course of dealing
or usage of trade or course of performance as provided in this Code
(Sections 1-205 and 1-208). Whether an agreement has legal consequences
is determined by the provisions of this Code, if applicable; otherwise
by the law of contracts (Section 1-103). (Compare "Contract".)
(4) "Bank"
means any person engaged in the business of banking.
(5) "Bearer"
means the person in possession of an instrument, document of title,
or certificated security payable to bearer or endorsed in blank.
(6) "Bill
of lading" means a document evidencing the receipt of goods for
shipment issued by a person engaged in the business of transporting
or forwarding goods, and includes an airbill. "Airbill"
means a document serving for air transportation as a bill of lading
does for marine or rail transportation, and includes an air consignment
note or air waybill.
(7) "Branch"
includes a separately incorporated foreign branch or a bank.
(8) "Burden
of establishing" a fact means the burden of persuading the trier
of fact that the existence of the fact is more probable than its non-existence.
(9) "Buyer
in ordinary course in business" means a person who in good faith
and without knowledge that the sale to him is in violation of the
ownership rights or security interest of a third party in the goods,
buys in ordinary course from a person in the business of selling goods
of that kind but does not include a collateral loan broker. All persons
who sell minerals or the like (including oil and gas) at wellhead
or minehead shall be deemed to be persons in ‘the business of
selling goods of that kind. "Buying" may be for cash or
by exchange of other property or on secured or unsecured credit and
includes receiving goods or documents of title under a pre-existing
contract for sale but does not include a transfer in bulk or as security
for or in total or partial satisfaction of a money debt.
(10)
"Conspicuous": A term or clause is conspicuous when it is
so written that a reasonable person against whom it is to operate
ought to have noticed it. A printed heading in capitals (as: NON-NEGOTIABLE
BILL OF LADING) is conspicuous. Language in the body of a form is
"conspicuous" if it is in larger or other contrasting type
or color. But in a telegram any stated term is "conspicuous".
Whether a term or clause is "conspicuous" or not is for
decision by the court.
(11)
"Contract" means the total legal obligation which results
from the parties’ agreement as affected by this Code and any
other applicable rules of law. (Compare "Agreement".)
(12)
"Court" means the Oneida Nation Court.
(13)
"Creditor" includes a general creditor, a secured creditor,
a lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity and an executor or administrator of an insolvent
debtor’s or assignor’s estate.
(14)
"Defendant" includes a person in the position of defendant
in a cross-action or counterclaim.
(15)
"Delivery" with respect to instruments, documents of title,
chattel paper or certificated securities means voluntary transfer
of possession.
(16)
"Document of title" includes bill of lading, dock warrant,
dock receipt, warehouse receipt or order for the delivery of goods,
and also any other document which in the regular course of business
or financing is treated as adequately evidencing that the person in
possession of it is entitled to receive, hold and dispose of the document
and the goods it covers. To be a document of title a document must
purport to be issued by or addressed to a bailee and purport to cover
goods in the bailee’s possession which are either identified
or are fungible portions of an identified mass.
(17)
"Fault" means wrongful act, omission or breach.
(18)
"Fungible" with respect to goods or securities means goods
or securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible shall
be deemed fungible for the purposes of this Code to the extent that
under a particular agreement or document unlike units are treated
as equivalents.
(19)
"Genuine" means free of forgery or counterfeiting.
(20)
"Good faith" means honesty in fact in the conduct or transaction
concerned.
(21)
"Holder" means a person who is in possession of a document
of title or an instrument or an investment certificated security drawn,
issued or endorsed to him or to his order or to bearer or in blank.
(22)
To "honor" is to pay or to accept any pay, or where a credit
so engages to purchase or discount a draft complying with the terms
of the credit.
(23)
"Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(24)
A person is "insolvent" who either has ceased to pay his
debts in the ordinary course of business or cannot pay his debts as
they become due or is insolvent within the meaning of the federal
bankruptcy law.
(25)
"Money" means a medium of exchange authorized or adopted
by a domestic or foreign government as a part of its currency except
that it does not include rare or unusual coins used for numismatic
purposes. Such rare or unusual coins shall be considered goods; provided,
however, that nothing in this subsection shall be deemed to impair
or alter the obligation of an insurer to an insured under a contract
of insurance heretofore or hereafter issued or delivered within the
territorial jurisdiction of the Oneida Indian Nation covering loss
of or damage to property.
(26)
A person has "notice" of a fact when (a) he has actual knowledge
of it; or
(b)
he has received a notice or notification of it; or
(c)
from all the facts and circumstances known to him at the time in
question he has reason to know that it exists.
A person
"knows" or has "knowledge" of a fact when he has
actual knowledge of it. "Discover" or "learn" or
a word or phrase of similar import refers to knowledge rather than to
reason to know. The time and circumstances under which a notice or notification
may cease to be effective are not determined by this Code.
(27)
A person "notifies" or "gives" a notice or notification
to another by taking such steps as may be reasonably required to inform
the other in ordinary course whether or not such other actually comes
to know of it. A person "receives" a notice or notification
when,
(a)
it comes to his attention; or
(b)
it is duly delivered at the place of business through which the
contract was made or at any other place held out by him as the place
for receipt of such communications.
(28)
Notice, knowledge or a notice or notification received by an organization
is effective for a particular transaction from the time when it is
brought to the attention of the individual conducting that transaction,
and in any event from the time when it would have been brought to
his attention if the organization had exercised due diligence. An
organization exercises due diligence if it maintains reasonable routines
for communicating significant information to the person conducting
the transaction and there is reasonable compliance with the routines.
Due diligence does not require an individual acting for the organization
to communicate information unless such communication is part of his
regular duties and unless he had reason to know of the transaction
and that the transaction would be materially affected by the information.
(29)
"Organization" includes a corporation, government or governmental
subdivision or agency, business trust, estate, trust, partnership
or association, two or more persons having a joint or common interest,
or any other legal or commercial entity.
(30)
"Party", as distinct from "third party", means
a person who has engaged in a transaction or made an agreement within
this Code.
(31)
"Person" includes an individual or an organization.
(32)
"Presumption" or "presumed" means that the trier
of fact must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its nonexistence
(33)
"Purchase" includes taking by sale, discount, negotiation,
mortgagee, pledge, lien, issue or re-issue, gift or any other voluntary
transaction creating an interest in property.
(34)
"Purchaser" means a person who takes by purchase.
(35)
"Qualified Financial Contract" means a contract as defined
in section 5-701 (b) of the New York General Obligations Law.
(36)
"Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(37)
"Representative" includes an agent, an officer of a corporation
or association, and a trustee, executor or administrator of an estate,
or any other person empowered to act for another.
(38)
"Rights" includes remedies.
(39)
"Security interest" means an interest in personal property
or fixtures which secures payment or performance of an obligation.
The retention or reservation of title by a seller of goods notwithstanding
shipment or delivery to the buyer (Section 2-401) is limited in effect
to a reservation of a "security interest". The term also
includes any interest of a buyer of accounts or chattel paper which
is subject to the Uniform Commercial Code, Article 9. The special
property interest of a buyer of goods on identification of such goods
to a contract for sale under Section 2-401 is not a "security
interest", but a buyer may also acquire a "security interest"
by complying with Article 9 of the New York Commercial Code. Unless
a lease or consignment is intended as security, reservation of title
thereunder is not a "security interest", but a consignment
is in any event subject to the provisions on consignment sale (Section
2-326). Whether a transaction creates a lease or security interest
is determined by the facts of each case; however, a transaction creates
a security interest if the consideration the lessee is to pay the
lessor for the right to possession and use of the goods is an obligation
for the term of the lease not subject to termination by the lessee,
and
(a)
the original term of the lease is equal to or greater than the remaining
economic life of the goods,
(b)
the lessee is bound to renew the lease for the remaining economic
life of the goods or is bound to become the owner of the goods,
(c)
the lessee has an option to renew the lease for the remaining economic
life of the goods for no additional consideration or nominal additional
consideration upon compliance with the lease agreement, or
(d)
the lessee has an option to become the owner of the goods for no
additional consideration or nominal additional consideration upon
compliance with the lease agreement.
A transaction
does not create a security interest merely because it provides that:
(a)
the present value of the consideration the lessee is obligated to
pay the lessor for the right to possession and use of the goods
is substantially equal to or is greater than the fair market value
of the goods at the time the lease is entered into,
(b)
the lessee assumes risk of loss of the goods, or agrees to pay taxes,
insurance, filing, recording, or registration fees, or service or
maintenance costs with respect to the goods,
(c)
the lessee has an option to renew the lease or to become the owner
of the goods,
(d)
the lessee has an option to renew the lease for a fixed rent that
is equal to or greater than the reasonably predictable fair market
rent for the use of the goods for the term of the renewal at the
time the option is to be performed, or
(e)
the lessee has an option to become the owner of the goods for a
fixed price that is equal to or greater than the reasonably predictable
fair market value of the goods at the time the option is to be performed.
For purposes
of this subsection (37):
(a)
Additional considerations is not nominal if (i) when the option
to renew the lease is granted to the lessee the rent is stated to
be the fair market rent for the use of the goods for the term of
the renewal determined at the time the option is to be performed,
or (ii) when the option to become the owner of the goods is grated
to the lessee the price is stated to be the fair market value of
the goods determined at the time the option is to be performed.
Additional consideration is nominal if it is less than the lessee's
reasonably predictable cost of performing under the lease agreement
if the option is not exercised;
(b)
"Reasonably predictable" and "remaining economic
life of the goods" are to be determined with reference to the
facts and circumstances at the time the transaction is entered into;
and
(c)
"Present value" means the amount as of a date certain
of one or more sums payable in the future, discounted to the date
certain. The discount is determined by the interest rate specified
by the parties if the rate is not manifestly unreasonable at the
time the transaction is entered into; otherwise the discount is
determined by a commercially reasonable rate that take into account
the facts and circumstances of each case at the time the transaction
was entered into.
(40)
"Send" in connection with any writing or notice means to
deposit in the mail or deliver for transmission by any other usual
means of communication with postage or cost for transmission provided
for and properly addressed and in the case of an instrument to an
address specified thereon or otherwise agreed, or if there by none
to any address reasonable under the circumstances. The receipt of
any writing or notice within the time at which it would have arrived
if properly sent has the effect of a proper sending.
(41)
"Signed" includes any symbol executed or adopted by a party
with present intention to authenticate a writing. Without limiting
the generality of the preceding sentence, any financing or other statement
of security agreement filed pursuant to Part 4 of Article 9 of the
Uniform Commercial Code which contains a copy, however made, of the
signature of a secured party or his representative, or of a debtor
or his representative, is "signed" by the secured party
or the debtor, as the case may be.
(42)
"Surety" includes guarantor.
(43)
"Telegram" includes a message transmitted by radio, teletype,
cable, any mechanical method of transmission, or the like.
(44)
"Term" means that portion of an agreement which relates
to a particular matter.
(45)
"Unauthorized" signature or endorsement means one made without
actual, implied or apparent authority and includes a forgery.
(46)
"Uniform Commercial Code" means, in this Chapter and Chapter
2 and 2A when not referring to the Oneida Indian Nation Commercial
Code, a reference to the current version of the Uniform Commercial
Code utilized by the State of New York.
(46)
"Value". Except as otherwise provided with respect to negotiable
instruments and bank collections (Sections 3-303, 4-208 and 4-209
of the New York Uniform Commercial Code) a person gives "value"
for rights if he acquires them.
(a)
in return for a binding commitment to extend credit or for the extension
of immediately available credit whether or not drawn upon and whether
or not a charge-back is provided for in the event of difficulties
in collection; or
(b)
as security for or in total or partial satisfaction of a pre-existing
claim; or
(c)
by accepting delivery pursuant to a pre-existing contract for purchase;
or
(d)
generally, in return for any consideration sufficient to support
a simple contract.
(47)
"Warehouse receipt" means a receipt issued by a person engaged
in the business of storing goods for hire.
(48)
"Written" or "writing" includes printing, typewriting
or any other intentional reduction to tangible form.
1-202. PRIMA FACIE EVIDENCE BY THIRD PARTY DOCUMENTS
A document
in due form purporting to be a bill of lading, policy or certificate
of insurance, official weigher’s or inspector’s certificate,
consular invoice, or any other document authorized or required by the
contract to be issued by a third party shall be prima facie evidence
of its own authenticity and genuineness and of the facts stated in the
document by the third party.
1-203. OBLIGATION OF GOOD FAITH
Every contract
or duty within this Code imposes an obligation of good faith in its
performance or enforcement.
1-204. TIME; REASONABLE TIME; "SEASONABLY"
(1) Whenever
this Code requires any action to be taken within a reasonable time,
any time which is not manifestly unreasonable may be fixed by agreement.
(2) What
is a reasonable time for taking any action depends on the nature,
purpose and circumstances of such action.
(3) An
action is taken "seasonably" when it is taken at or within
the time agreed or if no time is agreed at or within a reasonable
time.
1-205. COURSE OF DEALING AND USAGE OF TRADE
(1) A
course of dealing is a sequence of previous conduct between the parties
to a particular transaction which is fairly to be regarded as establishing
a common basis of understanding for interpreting their expressions
and other conduct.
(2) A
usage of trade is any practice or method of detailing or having such
regularity of observance in a place, vocation or trade as to justify
an expectation that it will be observed with respect to the transaction
in question. The existence and scope of such a usage are to be proved
as facts. If it is established that such a usage is embodied in a
written trade Code or similar writing the interpretation of the writing
is for the court.
(3) A
course of dealing between parties and any usage of trade in the vocation
or trade in which they are engaged or of which they are or should
be aware give particular meaning to and supplement or qualify terms
of an agreement.
(4) The
express terms of an agreement and an applicable course of dealing
or usage of trade shall be construed wherever reasonable as consistent
with each other; but when such construction is unreasonable, express
terms control both course of dealing and usage of trade and course
of dealing controls usage of trade.
(5) An
applicable usage of trade in the place where any part of performance
is to occur shall be used in interpreting the agreement as to that
part of the performance.
(6) Evidence
of a relevant usage of trade offered by one party is not admissible
unless and until he has given the other party such notice as the court
finds sufficient to prevent unfair surprise to the latter.
1-206. STATUTE OF FRAUDS FOR KINDS OF PERSONAL PROPERTY NOT OTHERWISE
COVERED
(1) Except
in the cases described in subsection (2) of this section a contract
for the sale of personal property is not enforceable by way of action
or defense beyond five thousand dollars in amount or value of remedy
unless there is some writing which indicates that a contract price,
reasonably identifies the subject matter, and is signed by the party
against whom enforcement is sought or by his authorized agent.
(2) Subsection
(1) of this section does not apply to contract for the sale of goods,
(Section 2-201).
(3) Subsection
one of this section does not apply to a qualified financial contract
if either (a) there is sufficient evidence to indicate that a contract
has been made or (b) the parties thereto, by means of a prior or subsequent
written contract, have agreed to be bound by the terms of such qualified
financial contract from the time they reach agreement (by telephone,
by exchange of electronic messages, or otherwise) on those terms.
1-207. PERFORMANCE OR ACCEPTANCE UNDER RESERVATION OR RIGHTS
A party
who with explicit reservation of rights perform or promises performance
or assents to performance in a manner demanded or offered by the other
party does not thereby prejudice the rights reserved. Such words as
"without prejudice", "under protest" or the like
are sufficient.
1-208. OPTION TO ACCELERATE AT WILL
A term
providing that one party or his successor in interest may accelerate
payment or performance or require collateral or additional collateral
"at will" or "when he deems himself insecure" or
in words of similar import shall be construed to mean that he shall
have power to do so only if he in good faith believes that the prospect
of payment or performance is impaired. The burden of establishing lack
of good faith is on the party against whom the power has been exercised.
1-209. SUBORDINATED OBLIGATIONS
An obligation
may be issued as subordinated to payment of another obligation of the
person obligated, or a creditor may subordinate his right to payment
of an obligation by agreement with either the person obligated or another
creditor of the person obligated. Such a subordination does not create
a security interest as against either the common debtor or a subordinated
creditor. This section shall be construed as declaring the law as it
existed prior to the enactment of this section and not as modifying
it.
CHAPTER 2 - SALES
PART 1. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT MATTER
2-101. SHORT TITLE
This Code
shall be known and cited as the Oneida Indian Nation Uniform Commercial
Code--Sales.
2-102. SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS EXCLUDED FROM
THIS CODE
Unless
the context otherwise requires, this Chapter applies to transactions
in goods; it does not apply to any transaction which although in the
form of an unconditional contract to sell or present sale is intended
to operate only as a security transaction nor does this Chapter impair
or repeal any statute regulating sales to consumers, farmers or other
specified classes of buyers.
2-103. DEFINITIONS AND INDEX OF DEFINITIONS
(1) In
this Chapter unless the context otherwise requires
(a)
"Buyer" means a person who buys or contracts to buy goods.
(b)
"Good faith" in the case of a merchant means honesty in
fact and the observance of reasonable commercial standards of fair
dealing in the trade.
(c)
"Receipt" of goods means taking physical possession of
them.
(d)
"Seller" means a person who sells or contracts to sell
goods.
(2) Other
definitions applying to this Chapter or to specified Parts thereof,
and the sections in which they appear are:
"Acceptance".
Section 2-606.
"Banker’s credit". Section 2-325.
"Between merchants". Section 2-104.
"Cancellation". Section 2-106(4).
"Commercial unit". Section 2-105.
"Confirmed credit". Section 2-325.
"Conforming to contract". Section 2-106.
"Contract for sale". Section 2-106.
"Cover". Section 2-712.
"Entrusting". Section 2-403.
"Financing agency". Section 2-104.
"Future goods". Section 2-105.
"Goods". Section 2-105.
"Identification" Section 2-501.
"Installment contract". Section 2-612.
"Letter of Credit". Section 2-325.
"Lot. Section 2-105.
"Merchant". Section 2-104.
"Overseas". Section 2-323.
"Person in position of seller". Section 2-707
"Present sale". Section 2-106.
"Sale". Section 2-106.
"Sale on approval". Section 2-326.
"Sale or return". Section 2-326.
"Termination". Section 2-106
(3) The
following definitions found in the New York Uniform Commercial Code
apply to this Chapter.
"Check".
Section 3-104.
"Consignee". Section 7-102.
"Consignor". Section 7-102.
"Consumer goods". Section 9-109.
"Dishonor". Section 3-507.
"Draft". Section 3-104.
(4) In
addition, Chapter 1 contains general definitions and principles of
construction and interpretation applicable throughout this Code.
2-104. DEFINITIONS: "MERCHANT"; BETWEEN MERCHANTS";
"FINANCING AGENCY"
(1) "Merchant"
means a person who deals in goods of the kind or otherwise by his
occupation holds himself out as having knowledge or skill peculiar
to the practices or goods involved in the transaction or to whom such
knowledge or skill may be attributed by his employment of an agent
or broker or other intermediary who by his occupation holds himself
out as having such knowledge or skill.
(2) "Financing
agency" means a bank, finance company or other person who in
the ordinary course of business makes advances against goods or documents
of title or who by arrangement with either the seller or the buyer
intervenes in ordinary course to make or collect payment due or claimed
under the contract for sale, as by purchasing or paying the seller's
draft or making advances against or by merely taking it for collection
whether or not documents of title accompany the draft. "Financing
agency" includes also a bank or other person who similarly intervenes
between persons who are in the position of seller and buyer in respect
to the goods (Section 2-707).
(3) "Between
merchants" means in any transaction with respect to which both
parties are chargeable with the knowledge or skill of merchants.
2-105. DEFINITIONS: TRANSFERABILITY; "GOODS"; "FUTURE"
GOODS; "LOT"; "COMMERCIAL UNIT"
(1) "Goods"
means all things including specially manufactured goods) which are
movable at the time of identification to the contract for sale other
than the money in which the price is to be paid, investment securities
(New York Uniform Commercial Code Article 8) and things in action.
"Goods" also includes the unborn young of animals and growing
crops and other identified things attached to realty as described
in the section on goods to be served from realty (Section 2-107).
(2) Goods
must be both existing and identified before any interest in them can
pass. Goods which are not both existing and identified are "future"
goods. A purported present sale of future goods or of any interest
therein operates as a contract to sell.
(3) There
may be a sale of a part interest in existing identified goods.
(4) An
undivided share in an identified bulk of fungible goods is sufficiently
identified to be sold although the quantity of the bulk is not determined.
Any agreed proportion of such a bulk or any quantity thereof agreed
upon by number, weight or other measure may to the extent of the seller's
interest in the bulk be sold to the buyer who then becomes an owner
in common.
(5) "Lot"
means a parcel or a single article which is the subject matter of
a separate sale or delivery, whether or not it is sufficient to perform
the contract.
(6) "Commercial
unit" means such a unit of goods as by commercial usage is a
single whole for purposes of sale and division of which materially
impairs its character or value on the market or in use. A commercial
unit may be a single article (as a machine) or a set of articles (as
a suite of furniture or an assortment of sizes) or a quantity (as
a bale, gross, or carload) or any other unit treated in use or in
the relevant market as a single whole.
2-106. DEFINITIONS. "CONTRACT"; "AGREEMENT";
"CONTRACT FOR SALE"; "SALE"; "PRESENT SALE";
"CONFORMING" TO CONTRACT; "TERMINATION"; "CANCELLATION"
(1) In
this Chapter unless the context otherwise requires "contract"
and "agreement" are limited to those relating tot he present
or future sale of goods. "Contract for sale" includes both
a present sale of goods and a contract to sell goods at a future time.
A "sale" consists in the passing of title from the seller
to the buyer for a price (Section 2-401). A "present sale"
means a sale which is accomplished by the making of the contract.
(2) Goods
or conduct including any part of a performance are "conforming"
or conform to the contract when they are in accordance with the obligations
under the contract.
(3) "Termination"
occurs when either party pursuant to a power created by agreement
or law puts an end to the contract otherwise than for its breach.
On "termination" all obligations which are still executory
on both sides are discharged but any right based on prior breach or
performance survives.
(4) "Cancellation"
occurs when either party puts an end to the contract for breach by
the other and its effect is the same as that of "termination"
except that the canceling party also retains any remedy for breach
of the whole contract or any unperformed balance.
2-107. GOODS TO BE SEVERED FROM REALTY: RECORDING
(1) A
contract for the sale of minerals or the like (including oil and gas)
or a structure or its materials to be removed from realty is a contact
for the sale of goods within this Article if they are to be severed
by the seller buy until severance a purported present safe thereof
which is not effective as a transfer of an interest in land is effective
only as a contact to sell.
(2) A
contract for the sale apart from the land of growing crops or other
things attached to realty and capable of severance without material
harm thereto but not described in subsection (1) or of timber to be
cut is a contract for the sale of goods within this Article whether
the subject matter is to be severed by the buyer or by the seller
even though it forms part of the realty at the time of contracting,
and the parties can be identification effect a present sale before
severance.
(3) The
provisions of this section are subject to any third party rights provided
by the law relating to realty records, and the contract for sale may
be executed and recorded as a document transferring an interest in
land and shall then constitute notice to third parties of the buyer's
rights under the contract for sale.
PART 2. FORM, FORMATION AND READJUSTMENT OF CONTRACT
2-201. FORMAL REQUIREMENTS; STATUTE OF FRAUDS
(1) Except
as otherwise provided in this section a contract for the sale of goods
for the price of $500 or more is not enforceable by way of action
for defense unless there is some writing sufficient to indicate that
a contract for sale has been made between the parties and signed by
the party against whom enforcement is sought or by his authorized
agent or broker. A writing is not insufficient because it omits or
incorrectly states a term agreed upon but the contract is not enforceable
under this paragraph beyond the quantity of goods shown in such writing.
(2) Between
merchants if within a reasonable time a writing in confirmation of
the contract and sufficient against the sender is received and the
party receiving it has reason to know its contents, it satisfies the
requirements of subsection (1) against such party unless written notice
of objection to its contents is given within ten days after it is
received.
(3) A
contract which does not satisfy the requirements of subsection (1)
but which is valid in other respects is enforceable
(a)
if the goods are to be specifically manufactured for the buyer and
are not suitable for sale to others in the ordinary course of the
seller's business and the seller, before notice of repudiation is
received and under circumstances which reasonably indicate that
the goods are for the buyer, has made either a substantial beginning
of their manufacture or commitments for their procurement; or
(b)
if the party against whom enforcement is sought admits in his pleading,
testimony or otherwise in court that a contract for sale was made,
but the contract is not enforceable under this provision beyond
the quantity of goods admitted; or
(c)
with respect to goods for which payment has been made and accepted
or which have been received and accepted (Section 2-606).
(4) Subsection
one does not apply to a qualified financial contact if either (a)
there is sufficient evidence to indicate that a contract has been
made or (b) the parties thereto, by means of a prior or subsequent
written contract, have agreed to be bound by the terms of such qualified
financial contract from the time they reach agreement (by telephone,
by exchange or electronic messages, or otherwise) on those terms.
2-202. FINAL WRITTEN EXPRESSION: PAROL OR EXTRINSIC EVIDENCE
Terms with
respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing intended by the parties as
a final expression of their agreement with respect to such terms as
are included therein may not be contradicted by evidence of any prior
agreement or of a contemporaneous oral agreement but may be explained
or supplemented
(a) by
course of dealing or usage of trade (Section 1-205) or by course of
performance (Section 2-208); and
(b) by
evidence of consistent additional terms unless the court finds the
writing to have been intended also as a complete and exclusive statement
of the terms of the agreement.
2-203. SEALS INOPERATIVE
The affixing
of a seal to a writing evidencing a contract for sale or an offer to
buy or sell goods does not constitute the writing a sealed instrument
and the law with respect to sealed instruments does not apply to such
a contract of offer.
2-204 FORMATION IN GENERAL
(1) A
contract for sale of goods may be made in any manner sufficient to
show agreement, including conduct by both parties which recognizes
the existence of such a contract.
(2) An
agreement sufficient to constitute a contract for sale may be found
even though the moment of its making is undetermined.
(3) Even
though one or more terms are left open a contract for sale does not
fail for indefiniteness if the parties have intended to make a contract
and there is a reasonably certain basis for giving an appropriate
remedy.
2-205 FIRM OFFERS
An offer
by a merchant to buy or sell goods in a signed writing which by its
terms gives assurance that it will be held open is not revocable, for
lack of consideration, during the time stated or if no time is stated
for a reasonable time, buy in no event may such period of irrevocability
exceed three months; buy any such term of assurance on a form supplied
by the offeree must be separately signed by the offeror.
2-206 OFFER AND ACCEPTANCE IN FORMATION OF CONTRACT
(1) Unless
otherwise unambiguously indicated by the language or circumstances
(a)
an offer to make a contract shall be construed as inviting acceptance
in any manner and by any medium reasonable in the circumstances;
(b)
an order or other offer to buy goods for prompt or current shipment
shall be construed as inviting acceptance either by a prompt promise
to ship or by the prompt or current shipment of conforming or non-conforming
goods, but such a shipment of non-conforming goods does not constitute
an acceptance if the seller seasonable notifies the buyer that the
shipment is offered only as an accommodation to the buyer.
(2) Where
the beginning of a required performance is a reasonable mode of acceptance
an offeror who is not notified of acceptance within a reasonable time
may treat the offer as having lapsed before acceptance.
2-207 ADDITIONAL TERMS IN ACCEPTANCE OR CONFIRMATION
(1) A
definite and seasonable expression of acceptance or a written confirmation
which is sent within a reasonable time operates as an acceptance even
though it states terms additional to or different from those offered
or agreed upon, unless acceptance is expressly made conditional on
assent to the additional or different terms.
(2) The
additional terms are to be construed as proposals for addition to
the contract. Between merchants such terms become part of the contract
unless:
(a)
the offer expressly limits acceptance to the terms of the offer;
(b)
they materially alter it; or
(c)
notification of objection to them has already been given or is given
within a reasonable time after notice of them is received.
(3) Conduct
by both parties which recognized the existence of a contract is sufficient
to establish a contract for sale although the writings of the parties
do not otherwise establish a contract. In such case the terms of the
particular contract consist of those terms on which the writings of
the parties agree, together with any supplementary terms incorporated
under any other provisions of this Code.
2-208 COURSE OF PERFORMANCE OR PRACTICAL CONSTRUCTION
(1) Where
the contract for sale involves repeated occasions for performance
by either party with knowledge of the nature of the performance and
opportunity for objection to it by the other, any course of performance
accepted or acquiesced in without objection shall be relevant to determine
the meaning of the agreement.
(2) The
express terms of the agreement and any such course of performance,
as well as any course of dealing and usage of trade shall be construed
whenever reasonable as consistent with each other; but when such construction
is unreasonable, express terms shall control course of performance
and course of performance shall control both course of dealing and
usage of trade (Section 1-205).
(3) Subject
to the provisions of the next section on modification and waiver,
such course of performance shall be relevant to show a waiver or modification
of any term inconsistent with such course of performance.
2-209 MODIFICATION, RESCISSION AND WAIVER
(1) An
agreement modifying a contract within this Code needs no consideration
to be binding.
(2) A
signed agreement which excludes modification or rescission except
by a signed writing cannot be otherwise modified or rescinded, but
except as between merchants such a requirement on a form supplied
by the merchant must be separately signed by the other party.
(3) The
requirements of the statute of frauds section of this Code (Section
2-201) must be satisfied if the contract as modified is within its
provisions.
(4) Although
an attempt at modification or rescission does not satisfy the requirements
of subsection (2) or (3) it can operate as a waiver.
(5) A
party who has made a waiver affecting an executory portion of the
contract may retract the waiver by reasonable notification received
by the other party that strict performance will be required of any
term waived, unless the retraction would be unjust in view of a material
change of position in reliance on the waiver.
2-210 DELEGATION OF PERFORMANCE; ASSIGNMENT OF RIGHTS
(1) A
party may perform his duty through a delegate unless otherwise agreed
or unless the other party has a substantial interest in having his
original promisor perform or control the acts required by this contract.
No delegation of performance relieves the party delegating of any
duty to perform or any liability for breach.
(2) Unless
otherwise agreed all rights of either seller or buyer can be assigned
except where the assignment would materially change the duty of the
other party, or increase materially the burden or risk imposed on
him by his contract, or impair materially his change of obtaining
return performance. A right to damages for breach of the whole contract
or a right arising out of the assignor's due performance of his entire
obligation can be assigned despite agreement otherwise.
(3) Unless
the circumstances indicate the contrary a prohibition of assignment
of "the contract" is to be construed as barring only the
delegation to the assignee of the assignor's performance.
(4) An
assignment of "the contract" or of "all my rights under
the contract" or an assignment in similar general terms is an
assignment of rights and unless the language or the circumstances
(as in an assignment for security) indicate the contrary, it is a
delegation of performance of the duties of the assignor and its acceptance
by the assignee constitutes a promise by him to perform those duties.
This promise is enforceable by either the assignor or the other party
to the original contract.
(5) The
other party may treat any assignment which delegates performance as
creating reasonable grounds for insecurity and may without prejudice
to his rights against the assignor demand assurances from the assignee
(Section 2-609).
PART 3. GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT
2-301 GENERAL OBLIGATIONS OF PARTIES
The obligation
of the seller is to transfer and deliver and that of the buyer is to
accept and pay in accordance with the contract.
2-302 UNCONSCIONABLE CONTRACT OR CLAUSE
(1) If
the court as a matter of law finds the contract or any clause of the
contract to have been unconscionable at the time it was made, the
court may refuse to enforce the contract, or it may enforce the remainder
of the contract without the unconscionable clause, or it may so limit
the application of any unconscionable clause as to avoid any unconscionable
result.
(2) When
it is claimed or appears to the court that the contract or any clause
thereof may be unconscionable the parties shall be afforded a reasonable
opportunity to present evidence as to its commercial setting, purpose
and effect to aid the court in making the determination.
2-303 ALLOCATION OR DIVISION OF RISKS
Where this
Article allocates a risk or a burden as between the parties "unless
otherwise agreed", the agreement may not only shift the allocation
but may also divide the risk or burden.
2-304 PRICE PAYABLE IN MONEY, GOODS, REALTY, OR OTHERWISE
(1) The
price can be made payable in money or otherwise. If it is payable
in whole or in part in goods each party is a seller of the goods which
he is to transfer.
(2) Even
though all or part of the price is payable in an interest in realty
the transfer of the goods and the seller's obligations with reference
to them are subject to this Article, but not the transfer of the interest
in realty or the transferor's obligations in connection therewith.
2-305 OPEN PRICE TERM
(1) The
parties if they so intend can conclude a contract for sale even though
the price is not settled. In such a case the price is a reasonable
price at the time for delivery if
(a)
nothing is said as to price; or
(b)
the price is left to be agreed by the parties and they fail to agree;
or
(c)
the price is to be fixed in terms of some agreed market or other
standard as set or recorded by a third person or agency and it is
not so set or recorded.
(2) A
price to be fixed by the seller or by the buyer means a price for
him to fix in good faith.
(3) When
a price left to be fixed otherwise than by agreement of the parties
fails to be fixed through fault of one party the other may at his
option treat the contract as canceled or himself fix a reasonable
price.
(4) Where,
however, the parties intend not to be bound unless the price be fixed
or agreed and it is not fixed or agreed there is no contract. In such
a case the buyer must return any goods already received or if unable
so to do must pay their reasonable value at the time of delivery and
the seller must return any portion of the price paid in account.
2-306 OUTPUT, REQUIREMENTS AND EXCLUSIVE DEALINGS
(1) A
term which measures the quantity by the output of the seller or the
requirements of the buyer means such actual output or requirements
as may occur in good faith, except that no quantity unreasonably disproportionate
to any stated estimate or in the absence of a stated estimate to any
normal or otherwise comparable prior output or requirements may be
tendered or demanded.
(2) A
lawful agreement by either the seller or the buyer for exclusive dealing
in the kind of goods concerned imposes, unless otherwise agreed, an
obligation by the seller to use best efforts to supply the goods and
by the buyer to use best efforts to promote their sale.
2-307. DELIVERY IN SINGLE LOT OR SEVERAL LOTS
Unless
otherwise agreed all goods called for by a contract for sale must be
tendered in a single delivery and payment is due only on such tender
but where the circumstances give either party the right to make or demand
delivery in lots, the price, if it can be apportioned, may be demanded
for each lot.
2-308. ABSENCE OF SPECIFIED PLACE FOR DELIVERY
Unless
otherwise agreed,
(a) the
place for delivery of goods is the seller’s place of business
or if he has none his residence; but
(b) in
a contract for sale of identified goods which to the knowledge of
the parties at the time of contracting are in some other place, that
place is the place for their delivery; and
(c) documents
of title may be delivered through customary banking channels.
2-309. ABSENCE OF SPECIFIC TIME PROVISIONS; NOTICE OF TERMINATION
(1) The
time for shipment or delivery or any other action under a contract
if not provided in this Article or agreed upon shall be a reasonable
time.
(2) Where
the contract provides for successive performances, but is indefinite
in duration, it is valid for a reasonable time but, unless otherwise
agreed, may be terminated at any time by either party.
(3) Termination
of a contract by one party except on the happening of an agreed event
requires that reasonable notification be received by the other party
and an agreement dispensing with notification is invalid if its operation
would be unconscionable.
2-310. OPEN TIME PAYMENT OR RUNNING OF CREDIT; AUTHORITY TO SHIP UNDER
RESERVATION
Unless
otherwise agreed:
(a) payment
is due at the time and place at which the buyer is to receive the
goods even though the place of shipment is the place of delivery;
and
(b) if
the seller is authorized to send the goods he may ship them under
the reservation, and may tender the documents of title, but the buyer
may inspect the goods after their arrival before payment is due unless
such inspection is inconsistent with the terms of the contract (Section
2-513); and
(c) if
delivery is authorized and made by way of documents of title otherwise
than by subsection (b) then payment is due at the time and place at
which the buyer is to receive the documents regardless of where the
goods are to be received; and
(d) where
the seller is required or authorized to ship the goods on credit the
credit period runs from the time of shipment, but postdating the invoice
or delaying its dispatch will correspondingly delay the starting of
the credit period.
2-311. OPTIONS AND COOPERATION RESPECTING PERFORMANCE
(1) An
agreement for sale which is otherwise sufficiently definite (subsection
(3) of Section 2-204) to be a contract is not made invalid by the
fact that it leaves particulars of performance to be specified by
one of the parties. Any such specification must be made in good faith
and within limits set by commercial reasonableness.
(2) Unless
otherwise agreed specifications relating to assortment of the goods
are at the buyer’s option and except as otherwise provided in
subsections (1)(c) and (3) of Section 2-319 specifications or arrangements
relating to shipment are at the seller’s option.
(3) Where
such specification would materially affect the other party’s
performance but is not seasonably made or where one party’s cooperation
is necessary to the agreed performance of the other but is not seasonably
forthcoming the other party in addition to all other remedies,
(a)
is excused for any resulting delay in his own performance; and
(b)
may also either proceed to perform in any reasonable manner or after
the time for a material part of his own performance treat the failure
to specify or to cooperate as a breach by failure to deliver or
accept the goods.
2-312. WARRANTY OF TITLE AND AGAINST INFRINGEMENT; BUYER’S OBLIGATION
AGAINST INFRINGEMENT
(1) Subject
to subsection (2) there is in a contract for sale a warranty by the
seller that:
(a)
the title conveyed shall be good, and its transfer rightful; and
(b)
the goods shall be delivered free from any security interest or
other lien or encumbrance of which the buyer at the time of contracting
has no knowledge.
(2) A
warranty under subsection (1) will be excluded or modified only by
specific language or by circumstances which give the buyer reason
to know that the person selling does not claim title in himself or
that he is purporting to sell only such right or title as he or a
third person may have.
(3) Unless
otherwise agreed a seller who is a merchant regularly dealing in goods
of the kind warrants that the goods shall be delivered free of the
rightful claim of any third person by way of infringement or the like
but a buyer who furnishes specifications to the seller must hold the
seller harmless against any such claim which arises out of compliance
with the specifications.
2-313. EXPRESS WARRANTIES BY AFFIRMATION, PROMISE, DESCRIPTION, SAMPLE
(1) Express
warranties by the seller are created as follows:
(a)
Any affirmation of fact or promise made by the seller to the buyer
which relates to the goods and becomes part of the basis of the
bargain creates an express warranty that the goods shall conform
to the affirmation or promise.
(b)
Any description of the goods which is made part of the basis of
the bargain creates an express warranty that the goods shall conform
to the description.
(c)
Any sample or model which is made part of the basis of the bargain
creates an express warranty that the whole of the goods shall conform
to the sample or model.
(2) It
is not necessary to the creation of an express warranty that the seller
use formal words such as "warrant" or "guarantee"
or that he have a specific intention to make a warranty, but an affirmation
merely of the value of the goods or a statement purporting to be merely
the seller’s opinion or commendation of the goods does not create
a warranty.
2-314. IMPLIED WARRANTY: MERCHANTABILITY; USAGE OF TRADE
(1) Unless
excluded or modified (Section 2-316), a warranty that the goods shall
be merchantable is implied in a contract for their sale if the seller
is a merchant with respect to goods of that kind. Under this section
the serving for value of food or drink to be consumed either on the
premises or elsewhere is a sale.
(2) Goods
to be merchantable must be at least such as,
(a)
pass without objection in the trade under the contract description;
and
(b)
in the case of fungible goods, are of fair average quality within
the description; and
(c)
are fit for the ordinary purposes for which such goods are used;
and
(d)
run, within the variations permitted by the agreement, of even kind,
quality and quantity within each unit and among all units involved;
and
(e)
are adequately contained, packaged, and labeled as the agreement
may require; and
(f)
conform to the promises or affirmations of fact made on the container
or label if any.
(3) Unless
excluded or modified (Section 2-316) other implied warranties may
arise from course of dealing of usage of trade.
2-315. IMPLIED WARRANTY: FITNESS FOR PARTICULAR PURPOSE
Where the
seller at the time of contracting has reason to know any particular
purpose for which the goods are required and that the buyer is relying
on the seller’s skill or judgment to select or furnish suitable
goods, there is unless excluded or modified under the next section an
implied warranty that the goods shall be fit for such purpose.
2-316. EXCLUSION OR MODIFICATION OF WARRANTIES
(1) Words
or conduct relevant to the creation of an express warranty and words
or conduct tending to negate or limit warranty shall be construed
wherever reasonable as consistent with each other; but subject to
the provisions of this Chapter on parol or extrinsic evidence (Section
2-202) negation or limitation is inoperative to the extent that such
construction is unreasonable.
(2) Subject
to subsection (3), to exclude or modify the implied warranty or merchantability
or any part of it, the language must mention merchantability and in
case of a writing must be conspicuous, and to exclude or modify any
implied warranty of fitness the exclusion must be by writing and conspicuous.
Language to exclude all implied warranties of fitness is sufficient
if it states, for example, that "There are no warranties which
extend beyond the description on the face hereof."
(3) Notwithstanding
subsection (2)
(a)
unless the circumstances indicate otherwise, all implied warranties
are excluded by expressions like "as is", "with all
faults" or other language which in common understanding calls
the buyer’s attention to the exclusion of warranties and makes
plain that there is no implied warranty; and
(b)
when the buyer before entering into the contract has examined the
goods or the sample or model as fully as he desired or has refused
to examine the goods there is no implied warranty with regard to
defects which an examination ought in the circumstances to have
revealed to him; and
(c)
an implied warranty can also be excluded or modified by course of
dealing or course of performance or usage of trade.
(4) Remedies
for breach of warranty can be limited in accordance with the provisions
of this Chapter on liquidation or limitation of damages and on contractual
modification of remedy (Sections 2-718 and 2-719).
2-317. CUMULATION AND CONFLICT OF WARRANTIES EXPRESS OR IMPLIED
Warranties
whether express or implied shall be construed as consistent with each
other and as cumulative, but if such construction is unreasonable the
intention of the parties shall determine which warranty is dominant.
In ascertaining that intention the following rules apply:
(a) Exact
or technical specification displace an inconsistent sample or model
or general language of description.
(b) A
sample from an existing bulk displaces inconsistent general language
of description.
(c) Express
warranties displace inconsistent implied warranties other than an
implied warranty of fitness for a particular purpose.
2-318. THIRD PARTY BENEFICIARIES OF WARRANTIES EXPRESS OR IMPLIED
A seller’s
warranty whether express or implied extends to any natural person if
it is reasonable to expect that such person may use, consume or be affected
by the goods and who is injured in person by breach of the warranty.
A seller may not exclude or limit the operation of this section.
2-319. F.O.B. AND F.A.S. TERMS
(1) Unless
otherwise agreed the term F.O.B. (which means "free on board")
at a named place, even though used only in connection with the stated
price, is a delivery term under which:
(a)
when the term is F.O.B. the place of shipment, the seller must at
that place ship the goods in the manner provided in this Chapter
(2-504) and bear the expense and risk of putting them into the possession
of the carrier; or
(b)
when the term is F.O.B. the place of destination, the seller must
at his own expense and risk transport the goods to that place and
there tender delivery of them in the manner provided in this Chapter
(2-503);
(c)
when under either (a) or (b) the term is also F.O.B. vessel, car
or other vehicle, the seller must in addition at his own expense
and risk loan the goods on board. If the term is F.O.B. vessel the
buyer must name the vessel and in an appropriate case the seller
must comply with the provisions of this Chapter on the form of bill
of lading (2-323).
(2) Unless
otherwise agreed the terms F.A.S. vessel (which means "free alongside")
at a named port, even though used only in connection with the stated
price, is a delivery term under which the seller must
(a)
at his own expense and risk deliver the goods alongside the vessel
in the manner usual in that port or on a dock designated and provided
by the buyer; and
(b)
obtain and tender a receipt for the goods in exchange for which
the carrier is under a duty to issue a bill of lading.
(3) Unless
otherwise agreed in any case falling within subsection (1) (a) or
(c) or subsection (2) the buyer must seasonably give any needed instructions
for making delivery, including when the term is F.A.S. or F.O.B. the
loading berth of the vessel and in an appropriate case its name and
sailing date. The seller may treat the failure of needed instructions
as a failure of cooperation under this Chapter (2-311). He may also
at his option move the goods in any reasonable manner preparatory
to delivery or shipment.
(4) Under
the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer
must make payment against tender of the required documents and the
seller may not tender nor the buyer demand delivery of the goods in
substitution for the documents.
2-320. C.I.F. AND C. & F. TERMS
(1) The
term C.I.F. means that the price includes in a lump sum the cost of
the goods and the insurance and freight to the named destination.
The term C. & F. or C.F. means that the price so includes cost
and freight to the name destination.
(2) Unless
otherwise agreed and even though used only in connection with the
stated price and destination, the term C.I.F. destination or its equivalent
requires the seller at his own expense and risk to:
(a)
put the goods into the possession of a carrier at the port for shipment
and obtain a negotiable bill or bills of lading covering the entire
transportation to the named destination; and
(b)
load the goods and obtain a receipt from the carrier (which may
be contained in the bill of lading) showing that the freight has
been paid or provided for; and
(c)
obtain a policy or certificate of insurance, including any war risk
insurance, of a kind and on terms then current at the port of shipment
in the usual amount, in the currency of the contract, shown to cover
the same goods covered by the bill of lading and providing for payment
of loss to the order of the buyer or for the account of whom it
may concern; but the seller may add to the price the amount of the
premium for any such war risk insurance; and
(d)
prepare an invoice of the goods and procure any other documents
required to effect shipment or to comply with the contract; and
(e)
forward and tender with commercial promptness all the documents
in due form and with any endorsement necessary to perfect the buyer’s
rights.
(3) Unless
otherwise agreed the term C. & F. or its equivalent has the same
effect and imposes upon the seller the same obligations and risks
as a C.I.F. term except the obligation as to insurance.
(4) Under
the term C.I.F. or C. & F., unless otherwise agreed, the buyer
must make payment against tender of the required documents and the
seller may not tender nor the buyer demand delivery of the goods in
substitution for the documents.
2-321. C.I.F. OR C. & F.: "NET LANDED WEIGHTS"; "PAYMENT
ON ARRIVAL"; WARRANTY OF CONDITION ON ARRIVAL
Under a
contract containing a term C.I.F. or C. & F.
(1) Where
the price is based on or is to be adjusted according to "net
landed weights", "delivered weights", "out turn"
quantity or quality or the like, unless otherwise agreed the seller
must reasonably estimate the price. The payment due on tender of the
documents called for by the contract is the amount so estimated, but
after final adjustment of the price a settlement must be made with
commercial promptness.
(2) An
agreement described in subsection (1) or any warranty of quality or
condition of the goods on arrival places upon the seller the risk
of ordinary deterioration, shrinkage and the like in transportation
but has no effect on the place or time of identification to the contract
for sale or delivery or on the passing of the risk of loss.
(3) Unless
otherwise agreed where the contract provides for payment on or after
arrival of the goods the seller must before payment allow such preliminary
inspection as is feasible; but if the goods are lost, delivery of
the documents and payment are due when the goods should have arrived.
2-322. DELIVERY "EX-SHIP"
(1) Unless
otherwise agreed, a term for delivery of goods "ex-ship"
(which means from the carrying vessel) or in equivalent language is
not restricted to a particular ship and 'requires delivery from a
ship which has reached a place at the named port of destination where
goods of the kind are usually discharged.
(2) Under
such a term unless otherwise agreed:
(a)
the seller must discharge all liens arising out of the carriage
and furnish the buyer with a direction which puts the carrier under
a duty to deliver the goods; and
(b)
the risk of loss does not pass to the buyer until the goods leave
the ship's tackle or are otherwise properly unloaded.
2-323. FORM OF BILL OF LADING REQUIRED IN OVERSEAS SHIPMENT; "OVERSEAS"
(1) Where
the contract contemplates overseas shipment and contains a term C.I.F.
or C. & F. or F.O.B. vessel, the seller, unless otherwise agreed,
must obtain a negotiable bill of lading stating that the goods have
been loaded on board or, in the case of a term C.I.F. or C. &
F., received for shipment.
(2) Where
in a case within subsection (1) a bill of lading has been issued in
a set of parts, unless otherwise agreed if the documents are not to
be sent from abroad the buyer may demand tender of the full set; otherwise
only one part of the bill of lading need be tendered. Even if the
agreement expressly requires a full set:
(a)
due tender on a single part is acceptable within the provisions
of this Chapter on cure of improper delivery (subsection (1) of
2-508); and
(b)
even though the full set is demanded, if the documents are sent
from abroad the person tendering an incomplete set may nevertheless
require payment upon furnishing an indemnity which the buyer in
good faith deems adequate.
(3) A
shipment by water or by air or a contract contemplating such shipment
is "overseas" insofar as by usage of trade or agreement,
it is subject to the commercial, financing or shipping practices characteristic
of international deep water commerce.
2-324. "NO ARRIVAL, NO SALE" TERM
Under a
term "no arrival, no sale" or terms of like meaning, unless
otherwise agreed,
(a) the
seller must properly ship conforming goods and if they arrive by any
means he must tender them on arrival but he assumes no obligation
that the goods will arrive unless he has caused the non-arrival; and
(b) where
without fault of the seller the goods are in part lost or have so
deteriorated as no longer to conform to the contract or arrive after
the contract time, the buyer may proceed as if there had been casualty
to identified goods (Section 2-613).
2-325. "LETTER OF CREDIT" TERM; "CONFIRMED CREDIT"
(1) Failure
of the buyer seasonably to furnish an agreed letter of credit is a
breach of the contract for sale.
(2) The
delivery to seller of a proper letter of credit suspends the buyer’s
obligation to pay. If the letter of credit is dishonored, the seller
may on seasonable notification to the buyer require payment directly
from him.
(3) Unless
otherwise agreed the term "letter of credit" or "banker’s
credit" in a contract for sale means an irrevocable credit issued
by a financing agency of good repute and, where the shipment is overseas,
of good international repute. The term "confirmed credit"
means that the credit must also carry the direct obligation of such
an agency which does business in the seller’s financial market.
2-326. SALE ON APPROVAL AND SALE OR RETURN; CONSIGNMENT SALES AND RIGHTS
OF CREDITORS
(1) Unless
otherwise agreed, if delivered goods may be returned by the buyer
even though they conform to the contract, the transaction is
(a)
a "sale on approval" if the goods are delivered primarily
for use, and
(b)
a "sale or return" if the goods are delivered primarily
for resale.
(