HISTORY
I. Time line
A. Mercantile Law – localized (1300-1700)
B. Common Law of Sales – common law courts expanded to cover commercial disputes (1700)
C. Uniform Law Commission (ULC or NCCUSL) formed (1892)
D. Uniform Sales Act drafted by Samuel Williston (1906)
1. Eventually adopted in more than 30 states
2. Amended (1922)
E. Idea for UCC proposed by William Schnader (Father of UCC) (1940)
1. To deal with disparity between common law of states – uniformity
2. ULC teamed up with ALI
F. UCC written by Karl Llewellyn adopted (1951)
1. Adopted by 49 states by 1968
2. Article 2A adopted in 1987
3. Article 2A amended and adopted in 1990
4. Revised Article 1 in 2001
(a) 14 states adopted by 2005
5. Amended Article 2 adopted by UCL and ALI in 2003
(a) No state has adopted.
(b) Opposed by corporation special interest that think there are too many protections for consumers!
II. Overview
A. Sources
1. Article 2: Transactions in goods (sales)
2. Article 2A: Leases
3. CISG (United Nations Convention): International Transactions
4. Article 1: General provisions
B. Hierarchy of authority
1. Statute
2. Official Comments – note that many legislatures did not even see these comments when adopting the code! Do not over-rely on these!!
3. Cases
C. Competing Theories
1. Public Choice Theory: Competition among the states will produce the most efficient law and then the rest of the states will adopt the most efficient…
2. Uniformity: Disparity among the laws of states produces a lack of predictability, etc.
PART TWO: ARTICLE 1
I. Article 1: General Provisions
A. §1-102: How to construe Code
B. §1-103: Preserves common law unless changed by Code and how to construe.
C. §1-203: Demand that good faith be imposed on all transactions
D. §1-201: DEFINITIONS (also remember to look in §2-103 for defs)
E. §1-301: Choice of Law (very controversial)
PART THREE: SCOPE OF ARTICLE 2
I. Importance: Whether Article 2 (or 2A) applies can change the result for the parties. Think statute of limitations, warranty protections, etc.
II. 2-102: Transactions in Goods but not secured transactions plus doesn’t repeal special legislation re: consumer protection, regulation of farming, etc.
A. Transactions – sales
1. NOT gifts, borrowing, lease
2. Sales is defined in §2-106
B. Goods – §2-105
1. Includes: things movable at the time of identification to the contract for sale
(a) Must be a thing – so not a person or service
(b) Does include animals
(c) Identification – §2-501
(d) Movable – not defined, so use common sense
(e) Growing crops – §2-107
(f) Future goods (like books that will alter be printed) are goods
(g) Unborn young of animals (even if not conceived)
(h) Sp
cases…as well as software
B. Tests:
1. Predominant Purpose Test (MAJORITY): If the sale of goods was the primary or dominant purpose behind the transaction, then the entire contract is governed by Article 2.
(a) Methods:
i. What % of cost was for labor, what for good, or
ii. What does the language of the contract say, or
iii. What is the nature of the seller’s business (carpet seller or installer)
(b) Examples:
i. Not Article 2:
(1) contract for painting by artist (primarily a contract for service)
(2) Milau v. North Avenue Development (suit against contractors who built warehouse and designed and installed sprinkler system which burst and cause damage to textiles stored in warehouse = predominantly service and NOT covered by Article 2.
ii. Article 2:
(1) installation of heater (transaction for sale with labor incidentally involved)
(2) AIC v. RPP (contract to develop and implement software program is predominantly a contract for sale of good and the service aspect is incidental – used argument that service to develop this “specially manufactured good” was not service…)
