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Contracts II
University of Kansas School of Law
Ware, Stephen J.

Contracts II Outline

authorities
· UCC
o Article I – general provisions and definitions (use revised)
o Article 2 – transactions in goods (use current)
· common law K’s v. statutory K’s
o common law K’s – transactions in services and land
o statutory K’s – transactions in goods
· Magnuson-Moss Warranty Act – a federal statute
· CISG – Convention of K’s for the International Sale of Goods, international treaty

statute vs. cases
· [starting point is statutes – primary authority we’ll deal with is statutes rather than cases
· cases are used to illustrate the working of the statute
· cases may also interpret the statute in a particular way or resolve ambiguities or things the statute doesn’t address]

statutory analysis
· 1) focus on language of statute
o what does text say?
o consider ambiguities – are there diff ways it could be read?
o use definitions
· 2) legislative history (e.g., official comments)
· 3) policy considerations
· 4) cases and statutory analysis

overview of UCC
· law is only part of a sales system
o e.g., company may make amends (like let you keep goods for free) for something even when you have no legal case against them to keep you as a customer, the business side
· UCC doesn’t include all rules
o § 1-103(b) – when Article 2 doesn’t deal with an issue, you fall back on common law (like for things like capacity to K, duress, etc.)
· UCC drafted by NCCUSL (National Conference of Commissioners on Uniform State Laws) & ALI (American Law Institute)
· current Article 2 has been enacted by every state except Louisiana
o legislatures enact the UCC into law (which is diff than how restatements work)
o uniformity, but diff states can interpret the statutes differently
· amendments (revised versions) have been approved, but not enacted yet (some states have enacted revised Article 1, but none have enacted revised Article 2)

Contract Formation

Scope of Article 2
· benefits of code (vs. private agreements)
o 1) code indicates a commitment to the rule of law which helps in upholding K’s
o 2) code establishes a set of default rules and serves gap-filling purpose (though parties can K around default rules) (more below)
§ slow and costly to write a K for everything that may come up
o 3) code promotes uniformity across states
o 4) default rules v. mandatory rules
§ most of article 2 is default rules, meaning parties can K around them
§ code can serve to protect consumers (although UCC doesn’t really do it), but you can’t protect through default rules, because they can K around it, so what you really need is a mandatory rule
· 1-302 – variation by agreement – provisions of UCC may be varied by agreement, they’re just defaults, but can be changed by agreement
· the code as gap-fillers
o which controls? – hierarchy among terms – (from 1-303(e))
· the K (for parties’ intent)
o 1) express terms of agreement
· the UCC (to fill gaps in the K)
o 2) course of performance (this K)
o

rstanding for interpreting their expressions and other conduct

custom or common practice in the industry – any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question

Ex., when you’re talking about rat traps you’re talking about pairs (Ragus Co. v. City of Chicago), 2×4’s are less, credit hours are less

§ hypo – two opposing sides – one claims usage of trade, one claims course of dealing, which prevails?
· 1-303(e) – …course of dealing prevails over usage of trade
§ hypo – between a default rule (e.g., place of delivery) and course of performance?
· course of performance controls because it is considered an “otherwise agreement” which overrides the default place-of-delivery rule…
§ agreement – 1-201(b)(3) – “agreement” – as distinguished from “K”, means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in § 1-303.
when to use common law vs. UCC Art. 2