Sales and Leases | 34
Distinguishing Transactions Merely Related to a Sale of Goods Some transactions relate to a sale of goods, or are meant to facilitate a sale of goods, but are not themselves sales of goods. These arrangements are not necessarily contracts for the sale of goods governed by Article 2. Examples include (1) an agreement between a buyer and seller as to the price of goods purchased within specified time frames and (2) a contract to pay, to a third party, a designated portion of the purchase price upon exercise of an option to buy goods. [2 Anderson U.C.C. § 2- 106:30 (3d. ed.), Westlaw (database updated Dec. 2020).] Contract v. Agreement Though the terms contract and agreement are often used synonymously, the UCC does assign a different definition to each term. Agreement refers to the parties’ bargain in fact, as found in the relevant language or inferred from the surrounding circumstances. Put differently, the agreement is what the parties actually offered and accepted. The term contract refers to the legal consequences—that is, the total legal obligation—of the parties’ agreement, taking into account the whole law of contracts, including the UCC and, to the extent applicable, the common law and statutes outside the UCC. [ See U.C.C. § 1-201(3), (12) (2001); 2 Anderson U.C.C. § 2-106:29 (3d. ed.), Westlaw (database updated Dec. 2020).]
c. Goods Defined The talismanic definition of goods in Article 2 is “all things (including specially
manufactured goods) which are movable at the time of identification to the contract for sale.” [U.C.C. § 2-105(1) (1951).] Goods include the unborn offspring of animals, as well as growing crops. Finally, goods embrace other identified things that are attached to real property, as set forth in UCC § 2-107 (dealing with goods to be severed from real estate). However, goods do not include (1) money in which the purchase price is to be paid, (2) investment securities governed by UCC Article 8, or (3) causes of action. Article 2 may apply, however, to a transaction in which money is to be delivered as a commodity, and not as part of the purchase price. [U.C.C. § 2-105(1) (1951); 2 Anderson U.C.C. § 2-105:55 (3d. ed.), Westlaw (database updated Dec. 2020).] Size of Goods as Irrelevant In Article 2, a thing’s size is irrelevant to whether the thing constitutes a good. For instance, a million-gallon water tank, though exceedingly large, can be a good. [ Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water Co. , 532 F.2d 572 (7th Cir. 1976); 2 Anderson U.C.C. § 2-105:34 (3d. ed.), Westlaw (database updated Dec. 2020).]
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