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(810 ILCS 5/Art.
2 Pt. 3 heading)
PART
3. GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT
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(810 ILCS 5/2-301) (from Ch. 26,
par. 2-301)
Sec. 2-301. General obligations
of parties.
The obligation of the seller is
to transfer and deliver and that of the buyer is to accept and
pay in accordance with the contract.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-302) (from Ch. 26,
par. 2-302)
Sec. 2-302. Unconscionable
contract or clause.
(1) If the court as a matter of
law finds the contract or any clause of the contract to have
been unconscionable at the time it was made the court may refuse
to enforce the contract, or it may enforce the remainder of the
contract without the unconscionable clause, or it may so limit
the application of any unconscionable clause as to avoid any
unconscionable result.
(2) When it is claimed or appears
to the court that the contract or any clause thereof may be unconscionable
the parties shall be afforded a reasonable opportunity to present
evidence as to its commercial setting, purpose and effect to
aid the court in making the determination.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-303) (from Ch. 26, par. 2-303)
Sec. 2-303. Allocation or
division of risks.
Where this Article allocates a
risk or a burden as between the parties "unless otherwise
agreed", the agreement may not only shift the allocation
but may also divide the risk or burden.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-304) (from Ch. 26, par. 2-304)
Sec. 2-304. Price payable
in money, goods, realty, or otherwise.
(1) The price can be made payable
in money or otherwise. If it is payable in whole or in part in
goods each party is a seller of the goods which he is to transfer.
(2) Even though all or part of
the price is payable in an interest in realty the transfer of
the goods and the seller's obligations with reference to them
are subject to this Article, but not the transfer of the interest
in realty or the transferor's obligations in connection therewith.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-305) (from Ch. 26, par. 2-305)
Sec. 2-305. Open price term.
(1) The parties if they so intend
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
(a) nothing
is said as to price; or
(b) the
price is left to be agreed by the parties and they fail to agree;
or
(c) 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.
(2) A price to be fixed by the
seller or by the buyer means a price for him to fix in good faith.
(3) 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 option treat
the contract as cancelled or himself fix a reasonable price.
(4) 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.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-306) (from Ch. 26, par. 2-306)
Sec. 2-306. Output, requirements
and exclusive dealings.
(1) A term which measures the quantity
by the output of the seller or the requirements of the buyer
means such actual output or requirements as may occur in good
faith, except that no quantity unreasonably disproportionate
to any stated estimate or in the absence of a stated estimate
to any normal or otherwise comparable prior output or requirements
may be tendered or demanded.
(2) A lawful agreement by either
the seller or the buyer for exclusive dealing in the kind of
goods concerned imposes unless otherwise agreed an obligation
by the seller to use best efforts to supply the goods and by
the buyer to use best efforts to promote their sale.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-307) (from Ch. 26, par. 2-307)
Sec. 2-307. Delivery in single
lot or several lots.
Unless otherwise agreed all goods
called for by a contract for sale must be tendered in a single
delivery and payment is due only on such tender but where the
circumstances give either party the right to make or demand delivery
in lots the price if it can be apportioned may be demanded for
each lot.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-308) (from Ch. 26, par. 2-308)
Sec. 2-308. Absence of specified
place for delivery.
Unless otherwise agreed
(a) the
place for delivery of goods is the seller's place of business
or if he has none his residence; but
(b) in
a contract for sale of identified goods which to the knowledge
of the parties at the time of contracting are in some other place,
that place is the place for their delivery; and
(c) documents
of title may be delivered through customary banking channels.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-309) (from Ch. 26, par. 2-309)
Sec. 2-309. Absence of specific
time provisions; notice of termination.
(1) The time for shipment or delivery
or any other action under a contract if not provided in this
Article or agreed upon shall be a reasonable time.
(2) Where the contract provides
for successive performances but is indefinite in duration it
is valid for a reasonable time but unless otherwise agreed may
be terminated at any time by either party.
(3) Termination of a contract by
one party except on the happening of an agreed event requires
that reasonable notification be received by the other party and
an agreement dispensing with notification is invalid if its operation
would be unconscionable.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-310) (from Ch. 26, par. 2-310)
Sec. 2-310. Open time for
payment or running of credit authority to ship under reservation.
Unless otherwise agreed
(a) payment
is due at the time and place at which the buyer is to receive
the goods even though the place of shipment is the place of delivery;
and
(b) if
the seller is authorized to send the goods he may ship them under
reservation, and may tender the documents of title, but the buyer
may inspect the goods after their arrival before payment is due
unless such inspection is inconsistent with the terms of the
contract (Section 2--513); and
(c) if
delivery is authorized and made by way of documents of title
otherwise than by subsection (b) then payment is due at the time
and place at which the buyer is to receive the documents regardless
of where the goods are to be received; and
(d) where
the seller is required or authorized to ship the goods on credit
the credit period runs from the time of shipment but post-dating
the invoice or delaying its dispatch will correspondingly delay
the starting of the credit period.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-311) (from Ch. 26, par. 2-311)
Sec. 2-311. Options and cooperation
respecting performance.
(1) An agreement for sale which
is otherwise sufficiently definite (subsection (3) of Section
2--204 to be a contract is not made invalid by the
fact that it leaves particulars of performance to be specified
by one of the parties. Any such specification must be made in
good faith and within limits set by commercial reasonableness.
(2) Unless otherwise agreed specifications
relating to assortment of the goods are at the buyer's option
and except as otherwise provided in subsections (1) (c) and (3)
of Section 2--319 specifications or arrangements
relating to shipment are at the seller's option.
(3) Where such specification would
materially affect the other party's performance but is not seasonably
made or where one party's cooperation is necessary to the agreed
performance of the other but is not seasonably forthcoming, the
other party in addition to all other remedies.
(a) is
excused for any resulting delay in his own performance; and
(b) may
also either proceed to perform in any reasonable manner or after
the time for a material part of his own performance treat the
failure to specify or to cooperate as a breach by failure to
deliver or accept the goods.
(Source: Laws 1961, 1st SS., p. 7.)
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(810 ILCS 5/2-312) (from Ch. 26, par. 2-312)
Sec. 2-312. Warranty of title
and against infringement; buyer's obligation against infringement.
(1) Subject to subsection (2) there
is in a contract for sale a warranty by the seller that
(a) the
title conveyed shall be good, and its transfer rightful; and
(b) the
goods shall be delivered free from any security interest or other
lien or encumbrance of which the buyer at the time of contracting
has no knowledge.
(2) A warranty under subsection
(1) will be excluded or modified only by specific language or
by circumstances which give the buyer reason to know that the
person selling does not claim title in himself or that he is
purporting to sell only such right or title as he or a third
person may have.
(3) Unless otherwise agreed a seller
who is a merchant regularly dealing in goods of the kind warrants
that the goods shall be delivered free of the rightful claim
of any third person by way of infringement or the like but a
buyer who furnishes specifications to the seller must hold the
seller harmless against any such claim which arises out of compliance
with the specifications.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-313) (from Ch. 26, par. 2-313)
Sec. 2-313. Express warranties
by affirmation, promise, description, sample.
(1) 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
bargain 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
conform to the sample or model.
(2) It is not necessary to the
creation of an express warranty that the seller use formal words
such as "warrant" or "guarantee" or that
he have a specific intention to make a warranty, but an affirmation
merely of the value of the goods or a statement purporting to
be merely the seller's opinion or commendation of the goods does
not create a warranty.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-314) (from Ch. 26, par. 2-314)
Sec. 2-314. Implied warranty:
merchantability; usage of trade.
(1) Unless excluded or modified
(Section 2--316), a warranty that the goods shall
be merchantable 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 premises or elsewhere is a sale.
(2) Goods to be merchantable must
be at least such as
(a) pass
without objection in the trade under the contract description;
and
(b) in
the case of fungible goods, are of fair average quality within
the description; and
(c) are
fit for the ordinary purposes for which such goods are used;
and
(d) run,
within the variations permitted by the agreement, of even kind,
quality and quantity within each unit and among all units involved;
and
(e) are
adequately contained, packaged, and labeled as the agreement
may require; and
(f) conform
to the promises or affirmations of fact made on the container
or label if any.
(3) Unless excluded or modified
(Section 2--316) other implied warranties may arise
from course of dealing or usage of trade.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-315) (from Ch. 26, par. 2-315)
Sec. 2-315. Implied warranty:
fitness for particular purpose.
Where the seller at the time of
contracting has reason to know any particular purpose for which
the goods are required and that the buyer is relying on the seller's
skill or judgment to select or furnish suitable goods, there
is unless excluded or modified under the next section an implied
warranty that the goods shall be fit for such purpose.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-316) (from Ch. 26, par. 2-316)
Sec. 2-316. Exclusion or
modification of warranties. (1) Words or conduct relevant to
the creation of an express warranty and words or conduct tending
to negate or limit warranty shall be construed wherever reasonable
as consistent with each other; but subject to the provisions
of this Article on parol or extrinsic evidence (Section 2-202)
negation or limitation is inoperative to the extent that such
construction is unreasonable.
(2) Subject to subsection (3),
to exclude or modify the implied warranty of merchantability
or any part of it the language must mention merchantability and
in case of a writing must be conspicuous, and to exclude or modify
any implied warranty of fitness the exclusion must be by a writing
and conspicuous. Language to exclude all implied warranties of
fitness is sufficient if it states, for example, that "There
are no warranties which extend beyond the description on the
face hereof."
(3) Notwithstanding subsection
(2)
(a) unless the circumstances indicate
otherwise, all implied warranties are excluded by expressions
like "as is", "with all faults" or other
language which in common understanding calls the buyer's attention
to the exclusion of warranties and makes plain that there is
no implied warranty; and
(b) when 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
(c) an implied warranty can also
be excluded or modified by course of dealing or course of performance
or usage of trade; and
(d) the implied warranties of merchantability
and fitness for a particular purpose do not apply to the sale
of cattle, swine, sheep, horses, poultry and turkeys, or the
unborn young of any of the foregoing, provided the seller has
made reasonable efforts to comply with State and federal regulations
pertaining to animal health. This exemption does not apply if
the seller had knowledge that the animal was diseased at the
time of the sale.
(4) Remedies for breach of warranty
can be limited in accordance with the provisions of this Article
on liquidation or limitation of damages and on contractual modification
of remedy (Sections 2-718 and 2-719).
(Source: P.A. 82-234.)
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(810 ILCS 5/2-317) (from Ch. 26, par. 2-317)
Sec. 2-317. Cumulation and
conflict of warranties express or implied.
Warranties whether express or implied
shall be construed as consistent with each other and as cumulative,
but if such construction is unreasonable the intention of the
parties shall determine which warranty is dominant. In ascertaining
that intention the following rules apply:
(a) Exact
or technical specifications displace an inconsistent sample or
model or general language of description.
(b) A sample
from an existing bulk displaces inconsistent general language
of description.
(c) Express
warranties displace inconsistent implied warranties other than
an implied warranty of fitness for a particular purpose.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-318) (from Ch. 26, par. 2-318)
Sec. 2-318. Third party beneficiaries
of warranties express or implied.
A seller's warranty whether express
or implied extends to any natural person who is in the family
or household of his buyer or who is a guest in his home if it
is reasonable to expect that such person may use, consume or
be affected by the goods and who is injured in person by breach
of the warranty. A seller may not exclude or limit the operation
of this Section.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-319) (from Ch. 26, par. 2-319)
Sec. 2-319. F.O.B. and F.A.S.
terms.
(1) Unless otherwise agreed the
term F.O.B. (which means "free on board") at a named
place, even though used only in connection with the stated price,
is a delivery term under which
(a) when
the term is F.O.B. the place of shipment,
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the seller must at that place ship the
goods in the manner provided in this Article (Section
2-504) and bear the expense and risk of putting
them into the possession of the carrier; or
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(b)
when the term is F.O.B. the place of
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destination, the seller must at his
own expense and risk transport the goods to that
place and there tender delivery of them in the
manner provided in this Article (Section 2-503);
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(c)
when under either (a) or (b) the term is also
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F.O.B. vessel, car or other vehicle,
the seller must in addition at his own expense
and risk load the goods on board. If the term is
F.O.B. vessel the buyer must name the vessel and
in an appropriate case the seller must comply with
the provisions of this Article on the form of bill
of lading (Section 2-323).
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(2) Unless otherwise
agreed the term F.A.S. vessel (which means "free alongside")
at a named port, even though used only in connection with
the stated price, is a delivery term under which the seller
must
(a) at
his own expense and risk deliver the goods
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alongside the vessel in the manner usual
in that port or on a dock designated and provided
by the buyer; and
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(b)
obtain and tender a receipt for the goods in
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exchange for which the carrier is under
a duty to issue a bill of lading.
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(3) Unless otherwise
agreed in any case falling within subsection (1) (a) or
(c) or subsection (2) the buyer must seasonably give any
needed instructions for making delivery, including when
the term is F.A.S. or F.O.B. the loading berth of the vessel
and in an appropriate case its name and sailing date. The
seller may treat the failure of needed instructions as
a failure of cooperation under this Article (Section 2-311).
He may also at his option move the goods in any reasonable
manner preparatory to delivery or shipment.
(4) Under the term F.O.B. vessel
or F.A.S. unless otherwise agreed the buyer must make payment against
tender of the required documents and the seller may not tender
nor the buyer demand delivery of the goods in substitution for
the documents.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-320) (from Ch. 26, par. 2-320)
Sec. 2-320. C.I.F. and C. & F.
terms.
(1) The term C.I.F. means that
the price includes in a lump sum the cost of the goods and
the insurance and freight to the named destination. The term
C. & F. or C.F. means that the price so includes cost and
freight to the named destination.
(2) Unless otherwise agreed and
even though used only in connection with the stated price and
destination, the term C.I.F. destination or its equivalent requires
the seller at his own expense and risk to
(a) put
the goods into the possession of a carrier at the port for shipment
and obtain a negotiable bill or bills of lading covering the
entire transportation to the named destination; and
(b) load
the goods and obtain a receipt from the carrier (which may be
contained in the bill of lading) showing that the freight has
been paid or provided for; and
(c) obtain
a policy or certificate of insurance, including any war risk
insurance, of a kind and on terms then current at the port of
shipment in the usual amount, in the currency of the contract,
shown to cover the same goods covered by the bill of lading and
providing for payment of loss to the order of the buyer or for
the account of whom it may concern; but the seller may add to
the price the amount of the premium for any such war risk insurance;
and
(d) prepare
an invoice of the goods and procure any other documents required
to effect shipment or to comply with the contract; and
(e) forward
and tender with commercial promptness all the documents in due
form and with any indorsement necessary to perfect the buyer's
rights.
(3) Unless otherwise agreed the
term C. & F. or its equivalent has the same effect and imposes
upon the seller the same obligations and risks as a C.I.F. term
except the obligation as to insurance.
(4) Under the term C.I.F. or C. & F.
unless otherwise agreed the buyer must make payment against tender
of the required documents and the seller may not tender nor the
buyer demand delivery of the goods in substitution for the documents.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-321) (from Ch. 26, par. 2-321)
Sec. 2-321. C.I.F. or C. & F.: "net
landed weights"; "payment on arrival"; warranty
of condition on arrival.
Under a contract containing a term
C.I.F. or C. & F.
(1) Where the price is based on
or is to be adjusted according to "net landed weights", "delivered
weights", "out turn" quantity or quality or the
like, unless otherwise agreed the seller must reasonably estimate
the price. The payment due on tender of the documents called
for by the contract is the amount so estimated, but after final
adjustment of the price a settlement must be made with commercial
promptness.
(2) An agreement described in subsection
(1) or any warranty of quality or condition of the goods on arrival
places upon the seller the risk of ordinary deterioration, shrinkage
and the like in transportation but has no effect on the place
or time of identification to the contract for sale or delivery
or on the passing of the risk of loss.
(3) Unless otherwise agreed where
the contract provides for payment on or after arrival of the
goods the seller must before payment allow such preliminary inspection
as is feasible; but if the goods are lost delivery of the documents
and payment are due when the goods should have arrived.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-322) (from Ch. 26, par. 2-322)
Sec. 2-322. Delivery "ex-ship".
(1) Unless otherwise agreed a term
for delivery of goods "ex-ship" (which means
from the carrying vessel) or in equivalent language is not
restricted to a particular ship and requires delivery from
a ship which has reached a place at the named port of destination
where goods of the kind are usually discharged.
(2) Under such a term unless otherwise
agreed
(a) the
seller must discharge all liens arising out of the carriage and
furnish the buyer with a direction which puts the carrier under
a duty to deliver the goods; and
(b) the
risk of loss does not pass to the buyer until the goods leave
the ship's tackle or are otherwise properly unloaded.
(Source: Laws 1961, p. 2101.)
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(810 ILCS 5/2-323) (from Ch. 26, par. 2-323)
Sec. 2-323. Form of bill
of lading required in overseas shipment; "overseas."
(1) Where the contract contemplates
overseas shipment and contains a term C.I.F. or C. & F. or
F.O.B. vessel, the seller unless otherwise agreed must obtain
a negotiable bill of lading stating that the goods have been
loaded on board or, in the case of a term C.I.F. or C. & F.,
received for shipment.
(2) Where in a case within subsection
(1) a bill of lading has been issued in a set of parts, unless
otherwise agreed if the documents are not to be sent from abroad
the buyer may demand tender of the full set; otherwise only one
part of the bill of lading need be tendered. Even if the agreement
expressly requires a full set
(a) due
tender of a single part is acceptable within
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the provisions of this Article on cure
of improper delivery (subsection (1) of Section
2-508; and
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