US Laws, Codes, Statutes & Cases

Chapter 72 — Sales

 

2005 EDITION

 

 

SALES

 

COMMERCIAL TRANSACTIONS

 

GENERAL PROVISIONS

 

72.1010     Short title

 

72.1020     Scope; certain security and other transactions excluded from chapter

 

72.1030     Definitions and index of definitions

 

72.1040     Definitions: "merchant"; "financing agency"; "between merchants"

 

72.1050     Definitions: "goods"; "future" goods; "lot"; "commercial unit"

 

72.1060     Definitions: "contract"; "agreement"; "contract for sale"; "sale"; "present sale"; "conforming" to contract; "termination"; "cancellation"

 

72.1070     Goods to be severed from realty; recording

 

FORM, FORMATION AND READJUSTMENT OF CONTRACT

 

72.2010     Formal requirements: statute of frauds

 

72.2020     Final written expression: parol or extrinsic evidence

 

72.2030     Seals inoperative

 

72.2040     Formation in general

 

72.2050     Firm offers

 

72.2060     Offer and acceptance in formation of contract

 

72.2070     Additional terms in acceptance or confirmation

 

72.2080     Course of performance or practical construction

 

72.2090     Modification, rescission and waiver

 

72.2100     Delegation of performance; assignment of rights

 

GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT

 

72.3010     General obligations of parties

 

72.3020     Unconscionable contract or clause

 

72.3030     Allocation or division of risks

 

72.3040     Price payable in money, goods, realty or otherwise

 

72.3050     Open price term

 

72.3060     Output, requirements and exclusive dealings

 

72.3070     Delivery in single lot or several lots

 

72.3080     Absence of specified place for delivery

 

72.3090     Absence of specific time provisions; notice of termination

 

72.3100     Open time for payment or running of credit; authority to ship under reservation

 

72.3110     Options and cooperation respecting performance

 

72.3120     Warranty of title and against infringement; buyer's obligation against infringement

 

72.3130     Express warranties by affirmation, promise, description, sample

 

72.3140     Implied warranty: merchantability; usage of trade

 

72.3150     Implied warranty: fitness for particular purpose

 

72.3160     Exclusion or modification of warranties; livestock warranty

 

72.3170     Cumulation and conflict of warranties express or implied

 

72.3180     Third party beneficiaries of warranties express or implied

 

72.3190     F.O.B. and F.A.S. terms

 

72.3200     C.I.F. and C. and F. terms

 

72.3210     C.I.F. or C. and F.: "net landed weights"; "payment on arrival"; warranty of condition on arrival

 

72.3220     Delivery "ex-ship"

 

72.3230     Form of bill of lading required in overseas shipment; "overseas"

 

72.3240     "No arrival, no sale" term

 

72.3250     "Letter of credit" term; "confirmed credit"

 

72.3260     Sale on approval and sale or return; rights of creditors

 

72.3270     Special incidents of sale on approval and sale or return

 

72.3280     Sale by auction

 

TITLE, CREDITORS AND GOOD FAITH PURCHASERS

 

72.4005     Definitions for ORS 72.4010 and 72.4030

 

72.4010     Passing of title; reservation for security; limited application of ORS 72.4010

 

72.4020     Rights of seller's creditors against sold goods

 

72.4030     Power to transfer; good faith purchase of goods; "entrusting"

 

PERFORMANCE

 

72.5010     Insurable interest in goods; manner of identification of goods

 

72.5020     Buyer's right to goods on seller's repudiation, failure to deliver or insolvency

 

72.5030     Manner of seller's tender of delivery

 

72.5040     Shipment by seller

 

72.5050     Seller's shipment under reservation

 

72.5060     Rights of financing agency

 

72.5070     Effect of seller's tender; delivery on condition

 

72.5080     Cure by seller of improper tender or delivery; replacement

 

72.5090     Risk of loss in the absence of breach

 

72.5100     Effect of breach on risk of loss

 

72.5110     Tender of payment by buyer; payment by check

 

72.5120     Payment by buyer before inspection

 

72.5130     Buyer's right to inspection of goods

 

72.5140     When documents deliverable on acceptance; when on payment

 

72.5150     Preserving evidence of goods in dispute

 

BREACH, REPUDIATION AND EXCUSE

 

72.6010     Buyer's rights on improper delivery

 

72.6020     Manner and effect of rightful rejection

 

72.6030     Merchant buyer's duties as to rightfully rejected goods

 

72.6040     Buyer's options as to salvage of rightfully rejected goods

 

72.6050     Waiver of buyer's objections by failure to particularize

 

72.6060     What constitutes acceptance of goods

 

72.6070     Effect of acceptance; notice of breach; burden of establishing breach after acceptance; notice of claim or litigation to person answerable over

 

72.6080     Revocation of acceptance in whole or in part

 

72.6090     Right to adequate assurance of performance

 

72.6100     Anticipatory repudiation

 

72.6110     Retraction of anticipatory repudiation

 

72.6120     "Installment contract"; breach

 

72.6130     Casualty to identified goods

 

72.6140     Substituted performance

 

72.6150     Excuse by failure of presupposed conditions

 

72.6160     Procedure on notice claiming excuse

 

REMEDIES

 

72.7010     Remedies for breach of collateral contracts not impaired

 

72.7020     Seller's remedies on discovery of buyer's insolvency

 

72.7030     Seller's remedies in general

 

72.7040     Seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods

 

72.7050     Seller's stoppage of delivery in transit or otherwise

 

72.7060     Seller's resale including contract for resale

 

72.7070     "Person in the position of a seller"

 

72.7080     Seller's damages for nonacceptance or repudiation

 

72.7090     Action for the price

 

72.7100     Seller's incidental damages

 

72.7110     Buyer's remedies in general; buyer's security interest in rejected goods

 

72.7120     "Cover"; buyer's procurement of substitute goods

 

72.7130     Buyer's damages for nondelivery or repudiation

 

72.7140     Buyer's damages for breach in regard to accepted goods

 

72.7150     Buyer's incidental and consequential damages

 

72.7160     Buyer's right to specific performance or replevin

 

72.7170     Deduction of damages from the price

 

72.7180     Liquidation or limitation of damages; deposits

 

72.7190     Contractual modification or limitation of remedy

 

72.7200     Effect of "cancellation" or "rescission" on claims for antecedent breach

 

72.7210     Remedies for fraud

 

72.7220     Who can sue third parties for injury to goods

 

72.7230     Proof of market price: time and place

 

72.7240     Admissibility of market quotations

 

72.7250     Statute of limitations in contracts for sale

 

SALE OF CONSUMER GOODS

 

72.8010     Definitions for ORS 72.8010 to 72.8200

 

72.8020     Manufacturer's implied warranty of merchantability

 

72.8030     Manufacturer's implied warranty of fitness

 

72.8040     Retailer's or distributor's implied warranty of fitness

 

72.8050     Disclaimer of implied warranty of merchantability or implied warranty of fitness; manner and effect

 

72.8060     Express warranty

 

72.8070     Right to make express warranty; effect of express warranty upon disclaimer; duration of implied warranty of merchantability or implied warranty of fitness

 

72.8090     Form of express warranty; designation of service and repair facilities

 

72.8100     Manufacturer's service and repair; facilities within state; nonconforming good; inability to service; buyer's delivery or notice of nonconforming good

 

72.8110     Retailer's service and repair of nonconforming good in absence of manufacturer's service and repair facilities within state; buyer's delivery or notice of nonconforming good

 

72.8120     Time for commencement of service and repair; effect of delay; tender of conforming goods

 

72.8130     Liability to retailer of manufacturer not maintaining service and repair facility within state

 

72.8140     Unauthorized or unreasonable use after sale

 

72.8150     Service contract in addition to or in lieu of express warranty

 

72.8160     Express warranty in addition to implied warranties

 

72.8170     Authority of manufacturer who makes express warranty to suggest methods of effectuating service and repair

 

72.8180     Buyer's waiver of ORS 72.8010 to 72.8200

 

72.8190     Status of remedies under ORS 72.8010 to 72.8200; effect of unconstitutionality

 

72.8200     Operative dates

 

      72.010, 72.020, 72.030, 72.040, 72.050, 72.060, 72.070, 72.080, 72.090, 72.100, 72.110,

72.120, 72.130, 72.140, 72.150, 72.160, 72.170, 72.180 [Repealed by 1961 c.726 §427]

 

GENERAL PROVISIONS

 

      72.1010 Short title. This chapter may be cited as Uniform Commercial Code–Sales. [1961 c.726 §72.1010]

 

      72.1020 Scope; certain security and other transactions excluded from chapter. Unless the context otherwise requires, this chapter applies to transactions in goods; they do not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers. [1961 c.726 §72.1020]

 

      72.1030 Definitions and index of definitions. (1) In this chapter unless the context otherwise requires:

      (a) "Buyer" means a person who buys or contracts to buy goods.

      (b) "Good faith" in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

      (c) "Livestock" means equines, cattle, sheep, goats, llamas, alpacas and swine.

      (d) "Receipt" of goods means taking physical possession of them.

      (e) "Seller" means a person who sells or contracts to sell goods.

      (2) Other definitions applying to this chapter, and the sections in which they appear are:

      (a) "Acceptance," as defined in ORS 72.6060.

      (b) "Banker's credit," as defined in ORS 72.3250.

      (c) "Between merchants," as defined in ORS 72.1040.

      (d) "Cancellation," as defined in ORS 72.1060 (4).

      (e) "Commercial unit," as defined in ORS 72.1050.

      (f) "Confirmed credit," as defined in ORS 72.3250.

      (g) "Conforming to contract," as defined in ORS 72.1060.

      (h) "Contract for sale," as defined in ORS 72.1060.

      (i) "Cover," as defined in ORS 72.7120.

      (j) "Entrusting," as defined in ORS 72.4030.

      (k) "Financing agency," as defined in ORS 72.1040.

      (L) "Future goods," as defined in ORS 72.1050.

      (m) "Goods," as defined in ORS 72.1050.

      (n) "Identification," as defined in ORS 72.5010.

      (o) "Installment contract," as defined in ORS 72.6120.

      (p) "Letter of credit," as defined in ORS 72.3250.

      (q) "Lot," as defined in ORS 72.1050.

      (r) "Merchant," as defined in ORS 72.1040.

      (s) "Overseas," as defined in ORS 72.3230.

      (t) "Person in position of seller," as defined in ORS 72.7070.

      (u) "Present sale," as defined in ORS 72.1060.

      (v) "Sale," as defined in ORS 72.1060.

      (w) "Sale on approval," as defined in ORS 72.3260.

      (x) "Sale or return," as defined in ORS 72.3260.

      (y) "Termination," as defined in ORS 72.1060.

      (3) The following definitions in other series of sections apply to this chapter:

      (a) "Check," as defined in ORS 73.0104.

      (b) "Consignee," as defined in ORS 77.1020.

      (c) "Consignor," as defined in ORS 77.1020.

      (d) "Consumer goods," as defined in ORS 79.0102.

      (e) "Dishonor," as defined in ORS 73.0502.

      (f) "Draft," as defined in ORS 73.0104.

      (4) In addition, ORS chapter 71 contains general definitions and principles of construction and interpretation applicable throughout this chapter. [1961 c.726 §72.1030; 1979 c.636 §1; 1993 c.545 §116; 1995 c.320 §1; 2001 c.445 §132]

 

      72.1040 Definitions: "merchant"; "financing agency"; "between merchants." (1) "Merchant" means a person who deals in goods of the kind or otherwise by occupation purports to have knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by employment of an agent or broker or other intermediary who by occupation purports to have such knowledge or skill.

      (2) "Financing agency" means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany the draft. "Financing agency" includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods.

      (3) "Between merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants. [1961 c.726 §72.1040; 1987 c.158 §15]

 

      72.1050 Definitions: "goods"; "future" goods; "lot"; "commercial unit." (1) "Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities and things in action. "Goods" also includes the unborn young of animals and growing crops and other identified things attached to realty as described in ORS 72.1070 on goods to be severed from realty.

      (2) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are "future" goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.

      (3) There may be a sale of a part interest in existing identified goods.

      (4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller's interest in the bulk be sold to the buyer who then becomes an owner in common.

      (5) "Lot" means a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.

      (6) "Commercial unit" means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross or carload) or any other unit treated in use or in the relevant market as a single whole. [1961 c.726 §72.1050]

 

      72.1060 Definitions: "contract"; "agreement"; "contract for sale"; "sale"; "present sale"; "conforming" to contract; "termination"; "cancellation." (1) In this chapter, unless the context otherwise requires, "contract" and "agreement" are limited to those relating to the present or future sale of goods. "Contract for sale" includes both a present sale of goods and a contract to sell goods at a future time. A "sale" consists in the passing of title from the seller to the buyer for a price. A "present sale" means a sale which is accomplished by the making of the contract.

      (2) Goods or conduct including any part of a performance are "conforming" or conform to the contract when they are in accordance with the obligations under the contract.

      (3) "Termination" occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On "termination" all obligations which are still executory on both sides are discharged but any right based on prior breach or performance survives.

      (4) "Cancellation" occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of "termination" except that the canceling party also retains any remedy for breach of the whole contract or any unperformed balance. [1961 c.726 §72.1060]

 

      72.1070 Goods to be severed from realty; recording. (1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.

      (2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in subsection (1) of this section or of timber to be cut is a contract for the sale of goods within this chapter whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

      (3) The provisions of this section are subject to any third party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to third parties of the buyer's rights under the contract for sale. [1961 c.726 §72.1070; 1963 c.402 §9; 1973 c.504 §3]

 

FORM, FORMATION AND READJUSTMENT OF CONTRACT

 

      72.2010 Formal requirements: statute of frauds. (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the authorized agent or broker of the party. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing.

      (2) Between merchants, if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) of this section against such party unless written notice of objection to its contents is given within 10 days after it is received.

      (3) A contract which does not satisfy the requirements of subsection (1) of this section but which is valid in other respects is enforceable:

      (a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

      (b) If the party against whom enforcement is sought admits in pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

      (c) With respect to goods for which payment has been made and accepted or which have been received and accepted in accordance with ORS 72.6060. [1961 c.726 §72.2010]

 

      72.2020 Final written expression: parol or extrinsic evidence. Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

      (1) By course of dealing or usage of trade as provided in ORS 71.2050 or by course of performance as provided in ORS 72.2080; and

      (2) By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement. [1961 c.726 §72.2020]

 

      72.2030 Seals inoperative. The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute the writing a sealed instrument and the law with respect to sealed instruments does not apply to such a contract or offer. [1961 c.726 §72.2030]

 

      72.2040 Formation in general. (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

      (2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.

      (3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. [1961 c.726 §72.2040]

 

      72.2050 Firm offers. An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror. [1961 c.726 §72.2050]

 

      72.2060 Offer and acceptance in formation of contract. (1) Unless otherwise unambiguously indicated by the language or circumstances:

      (a) An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

      (b) An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods, but such a shipment of nonconforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

      (2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance. [1961 c.726 §72.2060]

 

      72.2070 Additional terms in acceptance or confirmation. (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

      (2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

      (a) The offer expressly limits acceptance to the terms of the offer;

      (b) They materially alter it; or

      (c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

      (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of the Uniform Commercial Code. [1961 c.726 §72.2070]

 

      72.2080 Course of performance or practical construction. (1) Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.

      (2) The express terms of the agreement and any such course of performance, as well as any course of dealing and usage of trade, shall be construed whenever reasonable as consistent with each other; but when such construction is unreasonable, express terms shall control course of performance and course of performance shall control both course of dealing and usage of trade.

      (3) Subject to the provisions of ORS 72.2090 on modification and waiver, such course of performance shall be relevant to show a waiver or modification of any term inconsistent with such course of performance. [1961 c.726 §72.2080]

 

      72.2090 Modification, rescission and waiver. (1) An agreement modifying a contract within this chapter needs no consideration to be binding.

      (2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

      (3) The requirements of ORS 72.2010, relating to the statute of frauds must be satisfied if the contract as modified is within its provisions.

      (4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) of this section, it can operate as a waiver.

      (5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver. [1961 c.726 §72.2090]

 

      72.2100 Delegation of performance; assignment of rights. (1) A party may perform the duty of the party through a delegate unless otherwise agreed or unless the other party has a substantial interest in having the original promisor perform or control the acts required by the contract. No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

      (2) Except as otherwise provided in ORS 79.0406, unless otherwise agreed, all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on the other party by the contract, or impair materially the chance of the other party obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of the entire obligation of the assignor can be assigned despite agreement otherwise.

      (3) The creation, attachment, perfection or enforcement of a security interest in the seller's interest under a contract is not a transfer that materially changes the duty of or increases materially the burden or risk imposed on the buyer or impairs materially the buyer's chance of obtaining return performance within the purview of subsection (2) of this section unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the seller. Even in that event, the creation, attachment, perfection and enforcement of the security interest remain effective, but (i) the seller is liable to the buyer for damages caused by the delegation to the extent that the damages could not reasonably be prevented by the buyer, and (ii) a court having jurisdiction may grant other appropriate relief, including cancellation of the contract for sale or an injunction against enforcement of the security interest or consummation of the enforcement.

      (4) Unless the circumstances indicate the contrary a prohibition of assignment of "the contract" is to be construed as barring only the delegation to the assignee of the assignor's performance.

      (5) An assignment of "the contract" or of "all my rights under the contract" or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances (as in an assignment for security) indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by the assignee to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.

      (6) The other party may treat any assignment which delegates performance as creating reasonable grounds for insecurity and may without prejudice to the rights of the other party against the assignor demand assurances from the assignee as provided in ORS 72.6090. [1961 c.726 §72.2100; 2001 c.445 §133]

 

      Note: For transition provisions regarding secured transactions, see notes under 79.0628.

 

GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT

 

      72.3010 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. [1961 c.726 §72.3010]

 

      72.3020 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. [1961 c.726 §72.3020]

 

      72.3030 Allocation or division of risks. Where this chapter 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. [1961 c.726 §72.3030]

 

      72.3040 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 the party 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 chapter, but not the transfer of the interest in realty or the transferor's obligations in connection therewith. [1961 c.726 §72.3040]

 

      72.3050 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 the seller or buyer 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 the option of the other party treat the contract as canceled or may 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. [1961 c.726 §72.3050]

 

      72.3060 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. [1961 c.726 §72.3060]

 

      72.3070 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. [1961 c.726 §72.3070]

 

      72.3080 Absence of specified place for delivery. Unless otherwise agreed:

      (1) The place for delivery of goods is the seller's place of business or if the seller has none the residence of the seller; but

      (2) 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

      (3) Documents of title may be delivered through customary banking channels. [1961 c.726 §72.3080]

 

      72.3090 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 chapter 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. [1961 c.726 §72.3090]

 

      72.3100 Open time for payment or running of credit; authority to ship under reservation. Unless otherwise agreed:

      (1) 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

      (2) If the seller is authorized to send the goods the seller may ship them under reservation, and may tender the documents of title, but, pursuant to ORS 72.5130, the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract; and

      (3) If delivery is authorized and made by way of documents of title otherwise than by subsection (2) of this section 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

      (4) Where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but postdating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period. [1961 c.726 §72.3100]

 

      72.3110 Options and cooperation respecting performance. (1) An agreement for sale which is otherwise sufficiently definite to be a contract within ORS 72.2040 (3) 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 ORS 72.3190 (1)(c) and 72.3190 (3) 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 the performance of that party; and

      (b) May also either proceed to perform in any reasonable manner or after the time for a material part of the performance of that party treat the failure to specify or to cooperate as a breach by failure to deliver or accept the goods. [1961 c.726 §72.3110]

 

      72.3120 Warranty of title and against infringement; buyer's obligation against infringement. (1) Subject to subsection (2) of this section 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) of this section 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 or that the person is purporting to sell only such right or title as the person 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. [1961 c.726 §72.3120]

 

      72.3130 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 the seller 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. [1961 c.726 §72.3130]

 

      72.3140 Implied warranty: merchantability; usage of trade. (1) Unless excluded or modified as provided in ORS 72.3160, 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 as provided in ORS 72.3160 other implied warranties may arise from course of dealing or usage of trade. [1961 c.726 §72.3140]

 

      72.3150 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 ORS 72.3160 an implied warranty that the goods shall be fit for such purpose. [1961 c.726 §72.3150]

 

      72.3160 Exclusion or modification of warranties; livestock warranty. (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 ORS 72.2020 on parol or extrinsic evidence negation or limitation is inoperative to the extent that such construction is unreasonable.

      (2) Subject to subsection (3) of this section, 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) of this section:

      (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 the buyer 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 the buyer; 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) With respect to the sale of livestock between merchants, excluding livestock sold for immediate slaughter, there shall be no implied warranty that the livestock animal is free from disease except where the seller had knowledge or reason to know that the animal was not free from disease at the time of the sale.

      (4) Remedies for breach of warranty can be limited in accordance with the provisions of ORS 72.7180 on liquidation or limitation of damages and ORS 72.7190 on contractual modification of remedy. [1961 c.726 §72.3160; 1979 c.636 §2]

 

      72.3170 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:

      (1) Exact or technical specifications displace an inconsistent sample or model or general language of description.

      (2) A sample from an existing bulk displaces inconsistent general language of description.

      (3) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose. [1961 c.726 §72.3170]

 

      72.3180 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 the buyer or who is a guest in the home of the buyer 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. [1961 c.726 §72.3180]

 

      72.3190 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, the seller must at that place ship the goods in the manner provided in ORS 72.5040 and bear the expense and risk of putting them into the possession of the carrier; or

      (b) When the term is F.O.B. the place of destination, the seller must at the expense and risk of the seller transport the goods to that place and there tender delivery of them in the manner provided in ORS 72.5030;

      (c) When under either (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at the expense and risk of the seller 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 ORS 72.3230 on the form of bill of lading.

      (2) Unless otherwise agreed the term F.A.S. vessel (which means "free alongside ship") 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 the expense and risk of the seller deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and

      (b) Obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.

      (3) Unless otherwise agreed in any case falling within paragraph (a) or (c) of subsection (1) of this section or subsection (2) of this section 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 as provided in ORS 72.3110. The seller may also at the option of the seller 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. [1961 c.726 §72.3190]

 

      72.3200 C.I.F. and C. and 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. and 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 the expense and risk of the seller 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. and 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. and 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. [1961 c.726 §72.3200]

 

      72.3210 C.I.F. or C. and F.: "net landed weights"; "payment on arrival"; warranty of condition on arrival. Under a contract containing a term C.I.F. or C. and 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) of this section 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. [1961 c.726 §72.3210]

 

      72.3220 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. [1961 c.726 §72.3220]

 

      72.3230 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. and 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. and F., received for shipment.

      (2) Where in a case within subsection (1) of this section 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 the provisions of ORS 72.5080 (1) on cure of improper delivery; and

      (b) Even though the full set is demanded, if the documents are sent from abroad the person tendering an incomplete set may nevertheless require payment upon furnishing an indemnity which the buyer in good faith deems adequate.

      (3) A shipment by water or by air or a contract contemplating such shipment is "overseas" in so far as by usage of trade or agreement it is subject to the commercial, financing or shipping practices characteristic of international deep water commerce. [1961 c.726 §72.3230]

 

      72.3240 "No arrival, no sale" term. Under a term "no arrival, no sale" or terms of like meaning, unless otherwise agreed:

      (1) The seller must properly ship conforming goods and if they arrive by any means the seller must tender them on arrival but the seller assumes no obligation that the goods will arrive unless the seller has caused the nonarrival; and

      (2) Where without fault of the seller the goods are in part lost or have so deteriorated as no longer to conform to the contract or arrive after the contract time, the buyer may proceed as if there had been casualty to identified goods as provided in ORS 72.6130. [1961 c.726 §72.3240]

 

      72.3250 "Letter of credit" term; "confirmed credit." (1) Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale.

      (2) The delivery to seller of a proper letter of credit suspends the buyer's obligation to pay. If the letter of credit is dishonored, the seller may on seasonable notification to the buyer require payment directly from the buyer.

      (3) Unless otherwise agreed the term "letter of credit" or "banker's credit" in a contract for sale means an irrevocable credit issued by a financing agency of good repute and, where the shipment is overseas, of good international repute. The term "confirmed credit" means that the credit must also carry the direct obligation of such an agency which does business in the seller's financial market. [1961 c.726 §72.3250]

 

      72.3260 Sale on approval and sale or return; rights of creditors. (1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is:

      (a) A "sale on approval" if the goods are delivere