COMMERICAL LAW
JUDGE SMALKIN
Fall 2008
I. Uniform Commercial Code (UCC)
A. General Set Up
1. 1-101: Sections are called “Articles” in the UCC and “Titles” in the Maryland Commercial Law Code; However, practicing lawyers in MD still call them Articles.
Each section contains:
· statutory language
· annotations
· cross-references
· definitional cross references
· official comments (very important to read)
o comes from the bodies who drafted the UCC to explain what the statute means
o gives examples
o are not legislative history b/c not generated by General Assembly
o are persuasive authority
2. Every state’s commercial code will vary; most of Maryland’s variations are in Article 9, but some are in Article 2.
3. Article/Title 1 applies to entire UCC unless specifically stated otherwise
4. UCC was enacted to change the CL
i. Common Law Defined: CL is the customary law; the law of the community of England (the way people behave towards each other in the community)
5. UCC contains Articles 1 through 10
B. Purposes/Rules of Construction (§ 1-102) 1. Rule of Construction: Titles/Articles should be liberally construed; given practical meaning
2. Purposes
i. To simplify, clarify and modernize the law governing commercial transactions; (this has been accomplished)
ii. To permit the continued expansion of commercial practices through custom, usage and agreement of the parties; (important in the sales article)
iii. To make uniform the law among the various jurisdictions (this has been accomplished)
VERY IMPORANT àC. General Principles of law are applicable as Supplementary (except age) 1. §1-103: Unless displaced by the particular provisions of Titles 1 through 10 of his article, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principle and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause of action shall supplement the UCC except that
(1) the age of majority as it pertains to the capacity to K is 18; and
(2) no person who has attained the age of 18 shall be considered to be w/o capacity by reason of age.
2. Breakdown of Terms contained therein:
à Principles of Law and Equity 1. Difference between “the principles of law and equity” is the:
· the subject matter
· the remedies available; and
· the ultimate decision-maker
2. Principles of Equity
· subject matter = divorce, trusts, wills, bankruptcy
· remedies = no monetary judgments; can only order action or inaction
· decision-maker = judge
3. Principles of Law
· subject matter =other civil cases
· remedies = only monetary judgments
· decision-maker = jury
à principal and agent
1. Defined by State Law
2. Defined: responsibility of the principle for what the agent does;
3. Three Types:
1. expressed – principle has expressly conferred authority on agent; includes authority only to do exactly
what is told
2. implied- authority to do one thing is implied authority to do other things in the course of getting that one thing expressly authorized done.
3. apparent – depends on
the mistake; prevents K from being formed b/c no meeting of the minds
à Bankruptcy
1. Very important; Article 9
2. Governed by Federal law
3. If judgment is discharged in bankruptcy, it is no longer any good – this is where insurance is important.
àother validating or invalidating cause
1. Like illegality – this will invalidate the K
D. Definitions (must be precise in your terms on the exam!!)
§1-201 uses internal definitions that apply to the entire code; if you can’t find the definition in the UCC, you look to the general law to see how it is defined
(9) buyer in the ordinary course of business – is a person who buys goods in good faith from somebody who is in the business of selling goods of that kind.
Example:
à dad sells boat – person buying the boat is not a “buyer in the ordinary course of business” b/c dad is not in the business of selling boats
à boat store sells boat – person buying the boat is a “buyer in the ordinary course of business b/c boat store is in the business of selling boats
