MODULE 24 SALES 171

4. Article 2A is quite lengthy, but for purpose of CPA exam, note that its provisions are similar to
Article
2 except that Article 2A applies to leases and Article 2 applies to sales of goods
5. Under Article 2A
6. Lessor is person who transfers right to possess named goods and to use them in described ways by
lessee
7. Note the following provisions where Article 2A is similar to Article 2:
8. Statute of frauds except that stated minimum is $1,000 instead of $500 that applies to sales of
goods
(1) There are three exceptions to Statute of Frauds whereby. leases need not be in writing even if
for $1000 or more (note that these are similar to three exceptions to Statute of Frauds
for sales
of goods)
(a) Specially manufactured goods when goods are not suitable for sale or lease in the ordinary
course of lessor's business
(b) Lessor or lessee admits to oral lease in court proceedings
1] Only enforceable up to quantity admitted
(c) Part acceptance in which lease is enforceable up to amount accepted by lessee
EXAMPLE: E leases under an oral agreement 900 personal computers. A, the lessor, ships 400 of the
personal computers to E. After accepting the 400, E decides she does not want to lease the other 500. E
is liable for the lease of the 400 personal computers under the part acceptance exception even though the
agreement was oral. She would be liable for the lease of the full 900 personal computers if the
agreement had been for less than $1,000 which is not the case here.
9. Rules on acceptance, revocation of acceptance, and rejection of goods
10. Remedies are similar to sellers' and buyers' remedies including the important concept of cure
11. Principles for performance include anticipatory repudiation or breach, (including use of adequate
assurance to avoid a breach), and the concept of impracticability
12. Leases may be assigned
13. Use general principles of contract and sales law for these
(1) Warranties
(2) Parol evidence
(3) Firm offers
(4) Risk of loss rules
(5) Concept of unconscionable agreements
14. Provision for sublease by lessee
15. Leased goods may become fixtures
16. Lessor has right to take possession of leased property after default without requirement of court
adjudication
17. Leases under Article 2A of UCC may be in any manner sufficient to show by words or conduct
that
lessor and lessee intended to form a lease of identified goods
18. Finance lease is three-party transaction in which lessor acquires title or right to possess goods
from
supplier
19. Lessor does not manufacture or supply goods for lessee but third-party supplier does according to
lease agreement
20. Contracts for the International Sales of Goods (CISG)
21. Contracts for sales of goods between persons or companies of different countries follow the
important
rules of CISG
22. Many provisions of CISG are similar to UCC provisions but differences are handled under CISG
be-
cause USA has this treaty with many countries in South America, Central America, North America,
and most countries in Europe
23. By Constitutional Law, CISG has priority over UCC when it applies and when it conflicts with
UCC
24. The following are important areas where CISG and UCC are different
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