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Sales of Goods (see also UCC article 9)
John Marshall Law School, Chicago
LaRue, Homer C.


What is the basis of the course?
The UCC—a statute.
Do we all interpret statutes the same way?
No. That is part of the problem.

○ A statute is the major premise in a categorical syllogism.
○ The facts of a problem or a case are the minor premise. They are second part of the syllogism.
○ The conclusion flows inexorably from the statute to the facts then to the conclusion.

The problem is that we can all interpret the major premise differently—words can be interpreted in many different ways and that is difficult for people to get used to.

Example, you have all heard the phrase “Christopher Columbus discovered America.”

○ That is the statute, that is the major premise. Back in 1992, Lousin heard a botanical talk regarding the plants found in America. For 10/12/1492, the almanac said that the native Americans discovered Christopher Columbus, a Spaniard lost on their shores. If you reinterpret the word “discover,” you could easily reinterpret the syllogism to mean that the native Americans discovered Columbus.
Choice of applicable law in the UCC:
§ 1-105. The comments make it clear that it is the minimum contacts rule, the modern cases favor the most significant relationship approach. Keep in mind that parties don’t usually negotiate choice of law—they negotiate forums but not choice of law.
Five Basic Principles of the UCC:
1. Liberal Construction
2. Freedom of K
3. Supplementary Principles
4. Commercial Reasonableness
5. Good Faith
First Basic Principle of the UCC—Liberal Construction (LC):
Applicable section: 1-102. 1-102 gives us a boilerplate example–you are to construe the statute liberally according to the underlying principles that they’ve given us. When you wish to expand beyond what is the current case law, you may wish to use the LC idea.
Second Basic Principle of the UCC—Freedom of K:
Applicable section: 1-102. This is a rather liberal view at the classical CL. The parties aren’t required to enter into a K but if they do, they are expected to abide by it. This is valuable because you can write your own K—as long as you don’t take the whole pie but only take 2/3 to ¾ of the pie, you are probably going to be OK. You’ll see certain sections of the code that say “unless the parti

03(1)(b)—it is honesty in fact but there are some additional words that change it into an objective test and therefore is a higher standard.

The only difference between ordinary good faith and merchant good faith will be “in the trade.”
Why are the Basic Principles Important?
All of the principles are important because they frequently decide the case. It is possible to have a wonderful technical argument for each party. What you come down to is something that shifts the burden from one side to the other—that is probably one of the 5 principles. These things will frequently end up tipping the scales so that one party who has no better technical argument than the other party will win. Keep these 5 principles in mind. AND, it is impossible for Lousin to write an essay exam question without using one of the 5 principles.
What is a Merchant?
A merchant is a very important person in the legal system. There is a whole set of rules for merchants and a whole set for non-merchants. That distinction usually has not been made in the