What Is A Sales Contract?

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What Is A Sales Contract?

This is an important consideration for purposes of Article 2. In order to determine whether Article 2 applies to a transaction, you must first determine whether a contract exists. Under the U.C.C., a contract need not be formed with any special formality. A contract may be formed in any manner sufficient to show agreement between the parties. This includes the conduct of the parties.

A contract usually begins by one person making an offer to another. The other person accepting the offer completes the contract. If the contract is supported by consideration, a contract is formed. Consideration, in the context of a contract usually means, money paid, or a promise to do something.

For example, If Jack asks Jill if she would like to buy his car for one hundred dollars, an offer has been made. If Jill agrees to the deal, then Jill has accepted the offer. The one hundred dollars serves as the consideration. The transaction would create a legally enforceable contract under the Uniform Commercial Code. Since the contract involved a transaction involving the sale of a good (the automobile), the transaction is governed by Article 2.

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