CHAPTER 2. SALES
BUSINESS AND COMMERCE CODE
TITLE 1. UNIFORM COMMERCIAL CODE
CHAPTER 2. SALES
SUBCHAPTER A. SHORT TITLE, GENERAL CONSTRUCTION AND SUBJECT
MATTER
Sec. 2.101. SHORT TITLE. This chapter may be cited as Uniform
Commercial Code--Sales.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.102. SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS
EXCLUDED FROM THIS CHAPTER. Unless the context otherwise
requires, this chapter applies to transactions in goods; it does
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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.103. DEFINITIONS AND INDEX OF DEFINITIONS. (a) In this
chapter unless the context otherwise requires
(1) "Buyer" means a person who buys or contracts to buy goods.
(2) Reserved.
(3) "Receipt" of goods means taking physical possession of them.
(4) "Seller" means a person who sells or contracts to sell
goods.
(b) Other definitions applying to this chapter or to specified
subchapters thereof, and the sections in which they appear are:
"Acceptance". Section 2.606.
"Banker's credit". Section 2.325.
"Between merchants". Section 2.104.
"Cancellation". Section 2.106(d).
"Commercial unit". Section 2.105.
"Confirmed credit". Section 2.325.
"Conforming to contract". Section 2.106.
"Contract for sale". Section 2.106.
"Cover". Section 2.712.
"Entrusting". Section 2.403.
"Financing agency". Section 2.104.
"Future goods". Section 2.105.
"Goods". Section 2.105.
"Identification". Section 2.501.
"Installment contract". Section 2.612.
"Letter of credit". Section 2.325.
"Lot". Section 2.105.
"Merchant". Section 2.104.
"Overseas". Section 2.323.
"Person in position of seller". Section 2.707.
"Present sale". Section 2.106.
"Sale". Section 2.106.
"Sale on approval". Section 2.326.
"Sale or return". Section 2.326.
"Termination". Section 2.106.
(c) The following definitions in other chapters apply to this
chapter:
"Check". Section 3.104.
"Consignee". Section 7.102.
"Consignor". Section 7.102.
"Consumer goods". Section 9.102.
"Control". Section 7.106.
"Dishonor". Section 3.502.
"Draft". Section 3.104.
(d) In addition Chapter 1 contains general definitions and
principles of construction and interpretation applicable
throughout this chapter.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.14, eff.
July 1, 2001; Acts 2003, 78th Leg., ch. 542, Sec. 2, eff. Sept.
1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
122, Sec. 3, eff. September 1, 2005.
Sec. 2.104. DEFINITIONS: "MERCHANT"; "BETWEEN MERCHANTS";
"FINANCING AGENCY". (a) "Merchant" means a person who deals in
goods of the kind or otherwise by his occupation holds himself
out as having knowledge or skill peculiar to the practices or
goods involved in the transaction or to whom such knowledge or
skill may be attributed by his employment of an agent or broker
or other intermediary who by his occupation holds himself out as
having such knowledge or skill.
(b) "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 or are associated with 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 (Section 2.707).
(c) "Between merchants" means in any transaction with respect to
which both parties are chargeable with the knowledge or skill of
merchants.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Amended by:
Acts 2005, 79th Leg., Ch.
122, Sec. 4, eff. September 1, 2005.
Sec. 2.105. DEFINITIONS: TRANSFERABILITY; "GOODS"; "FUTURE"
GOODS; "LOT"; "COMMERCIAL UNIT". (a) "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
(Chapter 8) 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 the section on goods to
be severed from realty (Section 2.107).
(b) 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.
(c) There may be a sale of a part interest in existing
identified goods.
(d) 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.
(e) "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.
(f) "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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.106. DEFINITIONS: "CONTRACT"; "AGREEMENT"; "CONTRACT FOR
SALE"; "SALE"; "PRESENT SALE"; "CONFORMING" TO CONTRACT;
"TERMINATION"; "CANCELLATION". (a) 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
(Section 2.401). A "present sale" means a sale which is
accomplished by the making of the contract.
(b) 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.
(c) "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.
(d) "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 cancelling party also
retains any remedy for breach of the whole contract or any
unperformed balance.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.107. GOODS TO BE SEVERED FROM REALTY: RECORDING. (a) 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.
(b) 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 (a)
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.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1973, 63rd Leg., p. 998, ch. 400, Sec. 3,
eff. Jan. 1, 1974.
SUBCHAPTER B. FORM, FORMATION AND READJUSTMENT OF CONTRACT
Sec. 2.201. FORMAL REQUIREMENTS; STATUTE OF FRAUDS. (a) 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 his authorized agent or broker. A writing is not
insufficient because it omits or incorrectly states a term agreed
upon but the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.
(b) 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 (a) against
such party unless written notice of objection to its contents is
given within ten days after it is received.
(c) A contract which does not satisfy the requirements of
Subsection (a) but which is valid in other respects is
enforceable
(1) 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
(2) if the party against whom enforcement is sought admits in
his 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
(3) with respect to goods for which payment has been made and
accepted or which have been received and accepted (Section
2.606).
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.202. 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 performance, course of dealing, or usage of
trade (Section 1.303); 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 2003, 78th Leg., ch. 542, Sec. 3, eff.
Sept. 1, 2003.
Sec. 2.203. 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.204. FORMATION IN GENERAL. (a) 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.
(b) An agreement sufficient to constitute a contract for sale
may be found even though the moment of its making is
undetermined.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.205. 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.206. OFFER AND ACCEPTANCE IN FORMATION OF CONTRACT. (a)
Unless otherwise unambiguously indicated by the language or
circumstances
(1) an offer to make a contract shall be construed as inviting
acceptance in any manner and by any medium reasonable in the
circumstances;
(2) 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 non-conforming goods, but such a shipment of
non-conforming 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.207. ADDITIONAL TERMS IN ACCEPTANCE OR CONFIRMATION. (a)
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.
(b) The additional terms are to be construed as proposals for
addition to the contract. Between merchants such terms become
part of the contract unless:
(1) the offer expressly limits acceptance to the terms of the
offer;
(2) they materially alter it; or
(3) notification of objection to them has already been given or
is given within a reasonable time after notice of them is
received.
(c) 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 this title.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.209. MODIFICATION, RESCISSION AND WAIVER. (a) An
agreement modifying a contract within this chapter needs no
consideration to be binding.
(b) 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.
(c) The requirements of the statute of frauds section of this
chapter (Section 2.201) must be satisfied if the contract as
modified is within its provisions.
(d) Although an attempt at modification or rescission does not
satisfy the requirements of Subsection (b) or (c) it can operate
as a waiver.
(e) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.210. DELEGATION OF PERFORMANCE; ASSIGNMENT OF RIGHTS.
(a) A party may perform his duty through a delegate unless
otherwise agreed or unless the other party has a substantial
interest in having his 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.
(b) 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 him by his contract, or impair
materially his chance of 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 his entire obligation can be
assigned despite agreement otherwise.
(c) 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 (b) 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.
(d) 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.
(e) 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 him to
perform those duties. This promise is enforceable by either the
assignor or the other party to the original contract.
(f) The other party may treat any assignment which delegates
performance as creating reasonable grounds for insecurity and may
without prejudice to his rights against the assignor demand
assurances from the assignee (Section 2.609).
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.15, eff.
July 1, 2001.
SUBCHAPTER C. GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT
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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.302. UNCONSCIONABLE CONTRACT OR CLAUSE. (a) 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.303. 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.304. PRICE PAYABLE IN MONEY, GOODS, REALTY, OR OTHERWISE.
(a) 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.305. OPEN PRICE TERM. (a) 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
(1) nothing is said as to price; or
(2) the price is left to be agreed by the parties and they fail
to agree; or
(3) 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.
(b) A price to be fixed by the seller or by the buyer means a
price for him to fix in good faith.
(c) 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.
(d) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.306. OUTPUT, REQUIREMENTS AND EXCLUSIVE DEALINGS. (a) 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.308. 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 he has none his residence; 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.309. ABSENCE OF SPECIFIC TIME PROVISIONS; NOTICE OF
TERMINATION. (a) 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.
(b) 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.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.310. 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 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
(3) if delivery is authorized and made by way of documents of
title otherwise than by Subdivision (2) then payment is due
regardless of where the goods are to be received:
(A) at the time and place at which the buyer is to receive
delivery of the tangible documents; or
(B) at the time the buyer is to receive delivery of the
electronic documents and at the seller's place of business or if
none, the seller's residence; 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
post-dating the invoice or delaying its dispatch will
correspondingly delay the starting of the credit period.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Amended by:
Acts 2005, 79th Leg., Ch.
122, Sec. 5, eff. September 1, 2005.
Sec. 2.311. OPTIONS AND COOPERATION RESPECTING PERFORMANCE. (a)
An agreement for sale which is otherwise sufficiently definite
(Subsection (c) 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.
(b) Unless otherwise agreed specifications relating to
assortment of the goods are at the buyer's option and except as
otherwise provided in Subsections (a)(3) and (c) of Section 2.319
specifications or arrangements relating to shipment are at the
seller's option.
(c) 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
(1) is excused for any resulting delay in his own performance;
and
(2) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.312. WARRANTY OF TITLE AND AGAINST INFRINGEMENT; BUYER'S
OBLIGATION AGAINST INFRINGEMENT. (a) Subject to Subsection (b)
there is in a contract for sale a warranty by the seller that
(1) the title conveyed shall be good, and its transfer rightful;
and
(2) 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.
(b) A warranty under Subsection (a) 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.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.313. EXPRESS WARRANTIES BY AFFIRMATION, PROMISE,
DESCRIPTION, SAMPLE. (a) Express warranties by the seller are
created as follows:
(1) 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.
(2) 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.
(3) 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.314. IMPLIED WARRANTY: MERCHANTABILITY; USAGE OF TRADE.
(a) 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.
(b) Goods to be merchantable must be at least such as
(1) pass without objection in the trade under the contract
description; and
(2) in the case of fungible goods, are of fair average quality
within the description; and
(3) are fit for the ordinary purposes for which such goods are
used; and
(4) run, within the variations permitted by the agreement, of
even kind, quality and quantity within each unit and among all
units involved; and
(5) are adequately contained, packaged, and labeled as the
agreement may require; and
(6) conform to the promises or affirmations of fact made on the
container or label if any.
(c) Unless excluded or modified (Section 2.316) other implied
warranties may arise from course of dealing or usage of trade.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.316. EXCLUSION OR MODIFICATION OF WARRANTIES. (a) 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 chapter on parol or extrinsic
evidence (Section 2.202) negation or limitation is inoperative to
the extent that such construction is unreasonable.
(b) Subject to Subsection (c), 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."
(c) Notwithstanding Subsection (b)
(1) 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
(2) 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
(3) an implied warranty can also be excluded or modified by
course of dealing or course of performance or usage of trade.
(d) Remedies for breach of warranty can be limited in accordance
with the provisions of this chapter on liquidation or limitation
of damages and on contractual modification of remedy (Sections
2.718 and 2.719).
(e) The implied warranties of merchantability and fitness shall
not be applicable to the furnishing of human blood, blood plasma,
or other human tissue or organs from a blood bank or reservoir of
such other tissues or organs. Such blood, blood plasma or tissue
or organs shall not for the purpose of this Title be considered
commodities subject to sale or barter, but shall be considered as
medical services.
(f) The implied warranties of merchantability and fitness do not
apply to the sale or barter of livestock or its unborn young.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1979, 66th Leg., p. 190, ch. 99, Sec. 1,
eff. May 2, 1979.
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:
(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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.318. CHAPTER NEUTRAL ON QUESTION OF THIRD PARTY
BENEFICIARIES OF WARRANTIES OF QUALITY AND ON NEED FOR PRIVITY OF
CONTRACT. This chapter does not provide whether anyone other
than a buyer may take advantage of an express or implied warranty
of quality made to the buyer or whether the buyer or anyone
entitled to take advantage of a warranty made to the buyer may
sue a third party other than the immediate seller for
deficiencies in the quality of the goods. These matters are left
to the courts for their determination.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.319. F.O.B. AND F.A.S. TERMS. (a) 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
(1) 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 this
chapter (Section 2.504) and bear the expense and risk of putting
them into the possession of the carrier; or
(2) when the term is F.O.B. the place of 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 chapter (Section 2.503);
(3) when under either Subdivision (1) or (2) the term is also
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 chapter on the form of bill of lading (Section 2.323).
(b) 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
(1) at his own expense and risk deliver the goods alongside the
vessel in the manner usual in that port or on a dock designated
and provided by the buyer; and
(2) obtain and tender a receipt for the goods in exchange for
which the carrier is under a duty to issue a bill of lading.
(c) Unless otherwise agreed in any case falling within
Subsection (a)(1) or (3) or Subsection (b) 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 chapter (Section 2.311). He may
also at his option move the goods in any reasonable manner
preparatory to delivery or shipment.
(d) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.320. C.I.F. AND C. & F. TERMS. (a) 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.
(b) 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
(1) 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
(2) 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
(3) 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
(4) prepare an invoice of the goods and procure any other
documents required to effect shipment or to comply with the
contract; and
(5) forward and tender with commercial promptness all the
documents in due form and with any indorsement necessary to
perfect the buyer's rights.
(c) 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.
(d) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
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.
(a) 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.
(b) An agreement described in Subsection (a) 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.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.322. DELIVERY "EX-SHIP". (a) 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.
(b) Under such a term unless otherwise agreed
(1) 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
(2) the risk of loss does not pass to the buyer until the goods
leave the ship's tackle or are otherwise properly unloaded.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.323. FORM OF BILL OF LADING REQUIRED IN OVERSEAS
SHIPMENT; "OVERSEAS". (a) 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.
(b) Where in a case within Subsection (a) 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
(1) due tender of a single part is acceptable within the
provisions of this chapter on cure of improper delivery
(Subsection (a) of Section 2.508); and
(2) 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.
(c) A shipment by water or by air or a contract contemplating
such shipment is "overseas" insofar as by usage of trade or
agreement it is subject to the commercial, financing or shipping
practices characteristic of international deep water commerce.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.324. "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 he must tender them on arrival but he assumes
no obligation that the goods will arrive unless he has caused the
non-arrival; 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 (Section 2.613).
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.325. "LETTER OF CREDIT" TERM; "CONFIRMED CREDIT". (a)
Failure of the buyer seasonably to furnish an agreed letter of
credit is a breach of the contract for sale.
(b) 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 him.
(c) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.326. SALE ON APPROVAL AND SALE OR RETURN; RIGHTS OF
CREDITORS. (a) Unless otherwise agreed, if delivered goods may
be returned by the buyer even though they conform to the
contract, the transaction is
(1) a "sale on approval" if the goods are delivered primarily
for use, and
(2) a "sale or return" if the goods are delivered primarily for
resale.
(b) Goods held on approval are not subject to the claims of the
buyer's creditors until acceptance; goods held on sale or return
are subject to such claims while in the buyer's possession.
(c) Any "or return" term of a contract for sale is to be treated
as a separate contract for sale within the statute of frauds
section of this chapter (Section 2.201) and as contradicting the
sale aspect of the contract within the provisions of this chapter
on parol or extrinsic evidence (Section 2.202).
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1977, 65th Leg., p. 1530, ch. 623, Sec. 4,
eff. Aug. 29, 1977; Acts 1999, 76th Leg., ch. 414, Sec. 2.16,
eff. July 1, 2001.
Sec. 2.327. SPECIAL INCIDENTS OF SALE ON APPROVAL AND SALE OR
RETURN. (a) Under a sale on approval unless otherwise agreed
(1) although the goods are identified to the contract the risk
of loss and the title do not pass to the buyer until acceptance;
and
(2) use of the goods consistent with the purpose of trial is not
acceptance but failure seasonably to notify the seller of
election to return the goods is acceptance, and if the goods
conform to the contract acceptance of any part is acceptance of
the whole; and
(3) after due notification of election to return, the return is
at the seller's risk and expense but a merchant buyer must follow
any reasonable instructions.
(b) Under a sale or return unless otherwise agreed
(1) the option to return extends to the whole or any commercial
unit of the goods while in substantially their original
condition, but must be exercised seasonably; and
(2) the return is at the buyer's risk and expense.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.328. SALE BY AUCTION. (a) In a sale by auction if goods
are put up in lots each lot is the subject of a separate sale.
(b) A sale by auction is complete when the auctioneer so
announces by the fall of the hammer or in other customary manner.
Where a bid is made while the hammer is falling in acceptance of
a prior bid the auctioneer may in his discretion reopen the
bidding or declare the goods sold under the bid on which the
hammer was falling.
(c) Such a sale is with reserve unless the goods are in explicit
terms put up without reserve. In an auction with reserve the
auctioneer may withdraw the goods at any time until he announces
completion of the sale. In an auction without reserve, after the
auctioneer calls for bids on an article or lot, that article or
lot cannot be withdrawn unless no bid is made within a reasonable
time. In either case a bidder may retract his bid until the
auctioneer's announcement of completion of the sale, but a
bidder's retraction does not revive any previous bid.
(d) If the auctioneer knowingly receives a bid on the seller's
behalf or the seller makes or procures such a bid, and notice has
not been given that liberty for such bidding is reserved, the
buyer may at his option avoid the sale or take the goods at the
price of the last good faith bid prior to the completion of the
sale. This subsection shall not apply to any bid at a forced
sale.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
SUBCHAPTER D. TITLE, CREDITORS AND GOOD FAITH PURCHASERS
Sec. 2.401. PASSING OF TITLE; RESERVATION FOR SECURITY; LIMITED
APPLICATION OF THIS SECTION. Each provision of this chapter with
regard to the rights, obligations and remedies of the seller, the
buyer, purchasers or other third parties applies irrespective of
title to the goods except where the provision refers to such
title. Insofar as situations are not covered by the other
provisions of this chapter and matters concerning title become
material the following rules apply:
(a) Title to goods cannot pass under a contract for sale prior
to their identification to the contract (Section 2.501), and
unless otherwise explicitly agreed the buyer acquires by their
identification a special property as limited by this title. Any
retention or reservation by the seller of the title (property) in
goods shipped or delivered to the buyer is limited in effect to a
reservation of a security interest. Subject to these provisions
and to the provisions of the chapter on Secured Transactions
(Chapter 9), title to goods passes from the seller to the buyer
in any manner and on any conditions explicitly agreed on by the
parties.
(b) Unless otherwise explicitly agreed title passes to the buyer
at the time and place at which the seller completes his
performance with reference to the physical delivery of the goods,
despite any reservation of a security interest and even though a
document of title is to be delivered at a different time or
place; and in particular and despite any reservation of a
security interest by the bill of lading
(1) if the contract requires or authorizes the seller to send
the goods to the buyer but does not require him to deliver them
at destination, title passes to the buyer at the time and place
of shipment; but
(2) if the contract requires delivery at destination, title
passes on tender there.
(c) Unless otherwise explicitly agreed where delivery is to be
made without moving the goods,
(1) if the seller is to deliver a tangible document of title,
title passes at the time when and the place where he delivers
such documents and if the seller is to deliver an electronic
document of title, title passes when the seller delivers the
document; or
(2) if the goods are at the time of contracting already
identified and no documents are to be delivered, title passes at
the time and place of contracting.
(d) A rejection or other refusal by the buyer to receive or
retain the goods, whether or not justified, or a justified
revocation of acceptance revests title to the goods in the
seller. Such revesting occurs by operation of law and is not a
"sale".
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Amended by:
Acts 2005, 79th Leg., Ch.
122, Sec. 6, eff. September 1, 2005.
Sec. 2.402. RIGHTS OF SELLER'S CREDITORS AGAINST SOLD GOODS.
(a) Except as provided in Subsections (b) and (c), rights of
unsecured creditors of the seller with respect to goods which
have been identified to a contract for sale are subject to the
buyer's rights to recover the goods under this chapter (Sections
2.502 and 2.716).
(b) A creditor of the seller may treat a sale or an
identification of goods to a contract for sale as void if as
against him a retention of possession by the seller is fraudulent
under any rule of law of the state where the goods are situated,
except that retention of possession in good faith and current
course of trade by a merchant-seller for a commercially
reasonable time after a sale or identification is not fraudulent.
(c) Nothing in this chapter shall be deemed to impair the rights
of creditors of the seller
(1) under the provisions of the chapter on Secured Transactions
(Chapter 9); or
(2) where identification to the contract or delivery is made not
in current course of trade but in satisfaction of or as security
for a pre-existing claim for money, security or the like and is
made under circumstances which under any rule of law of the state
where the goods are situated would apart from this chapter
constitute the transaction a fraudulent transfer or voidable
preference.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.403. POWER TO TRANSFER; GOOD FAITH PURCHASE OF GOODS;
"ENTRUSTING". (a) A purchaser of goods acquires all title which
his transferor had or had power to transfer except that a
purchaser of a limited interest acquires rights only to the
extent of the interest purchased. A person with voidable title
has power to transfer a good title to a good faith purchaser for
value. When goods have been delivered under a transaction of
purchase the purchaser has such power even though
(1) the transferor was deceived as to the identity of the
purchaser, or
(2) the delivery was in exchange for a check which is later
dishonored, or
(3) it was agreed that the transaction was to be a "cash sale",
or
(4) the delivery was procured through fraud punishable as
larcenous under the criminal law.
(b) Any entrusting of possession of goods to a merchant who
deals in goods of that kind gives him power to transfer all
rights of the entruster to a buyer in ordinary course of
business.
(c) "Entrusting" includes any delivery and any acquiescence in
retention of possession regardless of any condition expressed
between the parties to the delivery or acquiescence and
regardless of whether the procurement of the entrusting or the
possessor's disposition of the goods have been such as to be
larcenous under the criminal law.
(d) The rights of other purchasers of goods and of lien
creditors are governed by the chapters on Secured Transactions
(Chapter 9) and Documents of Title (Chapter 7).
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1993, 73rd Leg., ch. 570, Sec. 3, eff.
Sept. 1, 1993.
SUBCHAPTER E. PERFORMANCE
Sec. 2.501. INSURABLE INTEREST IN GOODS; MANNER OF
IDENTIFICATION OF GOODS. (a) The buyer obtains a special
property and an insurable interest in goods by identification of
existing goods as goods to which the contract refers even though
the goods so identified are non-conforming and he has an option
to return or reject them. Such identification can be made at any
time and in any manner explicitly agreed to by the parties. In
the absence of explicit agreement identification occurs
(1) when the contract is made if it is for the sale of goods
already existing and identified;
(2) if the contract is for the sale of future goods other than
those described in Subdivision (3), when goods are shipped,
marked or otherwise designated by the seller as goods to which
the contract refers;
(3) when the crops are planted or otherwise become growing crops
or the young are conceived if the contract is for the sale of
unborn young to be born within twelve months after contracting or
for the sale of crops to be harvested within twelve months or the
next normal harvest season after contracting whichever is longer.
(b) The seller retains an insurable interest in goods so long as
title to or any security interest in the goods remains in him and
where the identification is by the seller alone he may until
default or insolvency or notification to the buyer that the
identification is final substitute other goods for those
identified.
(c) Nothing in this section impairs any insurable interest
recognized under any other statute or rule of law.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967.
Sec. 2.502. BUYER'S RIGHT TO GOODS ON SELLER'S REPUDIATION,
FAILURE TO DELIVER, OR INSOLVENCY. (a) Subject to Subsections
(b) and (c) and even though the goods have not been shipped a
buyer who has paid a part or all of the price of goods in which
he has a special property under the provisions of the immediately
preceding section may on making and keeping good a tender of any
unpaid portion of their price recover them from the seller if:
(1) in the case of goods bought for personal, family, or
household purposes, the seller repudiates or fails to deliver as
required by the contract; or
(2) in all cases, the seller becomes insolvent within ten days
after receipt of the first installment on their price.
(b) The buyer's right to recover the goods under Subsection
(a)(1) vests upon acquisition of a special property, even if the
seller had not then repudiated or failed to deliver.
(c) If the identification creating his special property has been
made by the buyer he acquires the right to recover the goods only
if they conform to the contract for sale.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.17, eff.
July 1, 2001.
Sec. 2.503. MANNER OF SELLER'S TENDER OF DELIVERY. (a) Tender
of delivery requires that the seller put and hold conforming
goods at the buyer's disposition and give the buyer any
notification reasonably necessary to enable him to take delivery.
The manner, time and place for tender are determined by the
agreement and this chapter, and in particular
(1) tender must be at a reasonable hour, and if it is of goods
they must be kept available for the period reasonably necessary
to enable the buyer to take possession; but
(2) unless otherwise agreed the buyer must furnish facilities
reasonably suited to the receipt of the goods.
(b) Where the case is within the next section respecting
shipment tender requires that the seller comply with its
provisions.
(c) Where the seller is required to deliver at a particular
destination tender requires that he comply with Subsection (a)
and also in any appropriate case tender documents as described in
Subsections (d) and (e) of this section.
(d) Where goods are in the possession of a bailee and are to be
delivered without being moved
(1) tender requires that the seller either tender a negotiable
document of title covering such goods or procure acknowledgment
by the bailee of the buyer's right to possession of the goods;
but
(2) tender to the buyer of a non