I. UNIFORM STATE LAWS. In the last half of the 19th Century, with
the improvement of transportation and communications, businesses
began marketing on a regional or national scale and began expanding
production operations into two or more different states. In doing this,
they experienced the reality of federalism. Each state had adopted or
modified the common law to meet the particular local needs of the
state. Business were faced with the very real possibility of
conflicting laws whenever disputes arose regarding commercial
transactions. Early attempts to resolve these problems lead to the
Uniform Sales Act and the Uniform Negotiable Instruments Act.
The American Law Institute (ALI) and the National Conference of
Commissioners on Uniform State Laws (NCCUSL) with
representatives from each of the States, have been drafting model
uniform laws on a wide variety of areas.
In 1944, the ALI and NCCUSL began to prepare a single,
comprehensive commercial code to modernize and replace the
multitude of conflicting state laws. The first draft was finished in
1950 and the official text was published in 1952. In 1953,
Pennsylvania was the first state to enact the UCC. Over the next
twenty six years, modified official texts were published. The UCC
has been adopted, with some slight modifications, by 49 states, the
District of Columbia, and the Virgin Islands. Even Louisiana has
adopted parts of the UCC.
The UCC covers the following areas of commercial law:
1. Article 2: Sales
2. Article 2A: Leases
3. Article 3: Commercial Paper
4. Article 4: Bank Deposits and Collections
5. Article 5: Letters of Credit
6. Article 6: Bulk Transfers
7. Article 7: Documents of Title
8. Article 8: Investment Securities
9. Article 9: Secured Transactions
In addition to the UCC, other attempts to encourage uniformity among state laws include:
1. Uniform Aeronautics Act (UAA)
2. Uniform Anatomical Gift Act (UAGA)
3. Uniform Arbitration Act
4. Uniform Consumer Credit Code (UCCC)
5. Uniform Consumer Sales Practices Act
6. Uniform Crime Victims Reparations Act
7. Uniform Deceptive Trade Practices Act
8. Uniform Disposition of Unclaimed Property Act
9. Uniform Durable Power of Attorney Act (UDPAA)
10. Uniform Fiduciaries Act
11. Uniform Gifts to Minors Act (UGMA)
12. Uniform Limited Partnership Act (ULPA)
13. Uniform Partnership Act (UPA)
14. Uniform Probate Code (UPC)
15. Uniform Residential Landlord and Tenant Act (URLTA)
16. Uniform Securities Act
17. Uniform Simultaneous Death Act
18. Uniform Trade Secrets Act
19. Uniform Transfers to Minors Act (UTMA)
II. ARTICLE 2 - SALES. In addition to the goal of uniformity among state law, the UCC was drafted to achieve a commercially desireable result:
(1.) gives the parties the maximum latitude in fixing terms,
(2.) requires the parties will act in good faith
(a.) honesty in fact in the conduct or transaction
(b.) for merchants, the observance of reasonable
commercial standards of fair dealing in the
(c.) good faith cannot be waived or excluded in the sales contract.
1. Definition: A sale involves the passing of title to goods from
seller to buyer for a price. The price may be payable in
money, other goods, services, or even real property.
2. Goods are tangible and moveable personal property.
3. Sales contract formation:
a. parties intended to make a contract
b. a reasonable certain basis exists for the court to grant an appropriate remedy. Usually this means that the only absolute requirements as to terms are
(1) description of the goods
(2) quantity of the goods
c. If description and quantity can be determined from the evidence that establishes the parties intended to enter into a contract, the UCC provisions will provide all of the other essential terms of the contract, including:
(2) time of delivery
(3) place of delivery
(4) time of payment
(7) revocation of acceptance
(8) transfer of title
(9) transfer of risk of loss
4. Mirror image rule abolished
5. Additional or different terms
a. A merchant is
(1) a person who deals in goods of the kind involved in
the sales contract:
(2) a person who, by occupation, holds themself out as having knowledge and skill particular to the practices or goods involved in the transaction; or
(3) a person who employs a merchant as their agent.
b. Between merchants, addition terms contained in the
acceptance become part of the sales contract unless
(1) they materially alter the original offer,
(2) the offer expressly states that no terms other than those in the offer will be accepted, or
(3) the offeror timely objects to modified terms.
c. Different (conflicting) terms do not become part of the contract unless specifically accepted by the offeror.
d. In one of the parties to the sales contract is not a merchant, additional terms in the acceptance will be mere proposals.
6. Consideration for modifications of sales contract.
7. Statute of Frauds - relaxed standards.
b. Writing, signed by the party against whom relief is sought.
c. Between merchants
(1) specially manufactured goods
(2) contract admitted in pleadings, discovery or testimony
(3) oral contracts enforceable to extent of payment.
8. Parol evidence rule relaxed
a. consistent additional terms
b. course of dealings
c. usage of trade
d. course of performance