Commercial Law Survey Outline
I. History
UCC
· Comes from the common law
· Is state-derivative
· UCC is not exactly uniform, there are some state variations
· Largely statutory, but must keep in mind CL.(e.g. Fraud?-see CL)
· Goals-foster predictability and reliability. What are the rules? What will happen if X happens?à The ground rules for commerce in the US.
Article 2-Deals with sale of “Goods-things, movable objects, tangible things.”
· Was preceded by the Uniform Sales Act
· Old view: CL “Buyer Beware…” The presumption has changed;
· New View: ** “SELLER BEWARE!” Buyer Is Benefited by implied warranties
· 2003, revision of art 2. No state has adopted. May never adopt.
*Answers to art. 2 questions may fall in a grey area. Do not be afraid to confront the uncertainty.
Article 9-Deals with “Secured Transactions”
· Revised in 2001. Quickly adopted by states.
· Extremely important to have certainty with regards to financial transactions
· Art 3, 4 deals with the banking industry.
*Answers are typically black/white.
How art. 2 works…
· Buyer & Seller-they have freedom of K.
· UCC fills “gaps.”-is the K missing terms? UCC can provide terms to get rid of ambiguity….in CL a K may collapse should it lack certain provisions
· Parties can fix own warranties and remedies.
· UCC “favors” buyers…unless the warranties/remedies are changed. Seller is trying to overcome this set-up.
· Boundaries-Good Faith, Unconscionability , 2-719(3)
§1-201(3): “Agreement” means the bargain, indicated by their words, and other circumstances including, course of dealing, course of performance, usage of trade.
(19) “Good Faith” means honesty in fact in the conduct or transaction concerned.
Art. 2 Definitions
§ 2-102: Art 2 deals only with transactions in “Goods.”
§ 2-103: DEFINITIONS & INDEX of definitions
(1) Defines Buyer, Good faith, receipt, and seller
§ 2-104: “Merchant” means a person who deals in goods of the kind or otherwise by
oved from realty Is a sale of goods. Until they are severed, interest is just a contract to sell.
(2) K for sale of growing crops, cutting timber is a sale of goods, as long as the things attached to the realty can be removed without causing material harm.
§2-201: Statute of Frauds. See more detailed explanation below.
§2-204: Formation
(1) K 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 K.
(2) An agreement sufficient to constitute a K 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 K for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for appropriate remedy.
