What does the uniform commercial code (UCC) state regarding price and warranty? What if a price is not specified in an agreement? What if a price is specified in an agreement? Does the UCC modify the price? What about a warranty? What rights does the buyer have for a guarantee under the UCC? What protection is granted to the seller? (Points : 20)
Uniform commercial code (UCC) states that the parties 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
– Nothing is said as to price
– The price is left to be agreed by the parties and they fail to agree
– 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.
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 or her option treat the contract as canceled or himself or herself fix a reason able price.
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 on account.
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 bar gain 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 con form to the sample or model.
Implied Warranty 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 prem ises or elsewhere is a sale.
However, if 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 an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
References: Garrett, G.A. (2010). World Class Contracting. 5th Edition. CCH Incorporated. pp 407-409