Sales and Leases | 102
8. Options and Cooperation Regarding Performance If an agreement for the sale of goods is otherwise definite enough to form a contract, the agreement is not invalid just because it leaves one party to specify the particulars of performance. Once that party does specify the particulars, she must do so in good faith and within the bounds of commercial reasonableness. Good faith and commercial reasonableness seem largely redundant, in that commercial reasonableness is one prong of good faith. In any case, whether the party specifies the particulars of performance in good faith is often evaluated against prevailing industry customs, with the goal to avoid surprise. In general, an agreement is definite enough to form a contract, even if some terms are left open, so long as (1) the parties intended to make a contract and (2) there is a reasonably certain basis to provide an appropriate remedy. [U.C.C. §§ 2-204(3), cmt. 1, 2-311(1) (1951); Panike & Sons Farms, Inc. v. Smith , 212 P.3d 992 (Idaho 2009); 2 Hawkland UCC Series § 2-311:1, Westlaw (database updated June 2021); Good Faith, Good Faith and Discretion to Set Contractual Terms, supra .] Example : An onion farmer contracted to sell onions to a distributor at stated quality, quantity, and price. The contract expressly empowered the buyer to designate the particular fields from which the onions would come, but the contract did not specify when that designation should occur. In conformity to prevailing industry practice, the distributor waited until close to harvest time, a few months after contracting, to designate the fields. The farmer contended that the designated fields could not produce the contractually required onions in sufficient quantities, so the farmer provided onions from different fields. Upon learning that the onions came from different fields from those designated, the distributor rejected them. On similar facts, a state supreme court held that the buyer designated the fields in good faith and within the bounds of commercial reasonableness. The designation complied with both the contract’s terms and industry custom. [ See Panike & Sons Farms, Inc. v. Smith , 212 P.3d 992 (Idaho 2009).]
a. Buyer’s Rights as to the Assortment of Goods and the Seller’s Rights as to Shipment
Unless otherwise agreed, the buyer may make specifications relating to the assortment of goods, and any specifications or arrangements relating to shipment are the seller’s to set. The seller’s right to make specifications or arrangements on shipment is subject to the buyer’s obligation under § 2-319 to provide sufficient information for the seller to make shipping arrangements. [U.C.C. § 2-311(2) (1951); 2 Hawkland UCC Series § 2-311:2, Westlaw (database updated June 2021).]
b. Special Rules Regarding Unseasonable Delay in Making Specifications or Failure to Cooperate
Made with FlippingBook - Online Brochure Maker