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Uniform Commercial Code

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The Uniform Commercial Code a project initially by the American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL) is a set of statutes adopted by 49 states to govern the business processes among merchants and customers. It was first formulated in the 1952 in the effort to harmonize commercial transactions in all the 50 states of the United States of America. It is so far the longest and most homogeneous act in use by several states. The law has seven parts each recognized in accordance to the mandate it carries. Article 2 deals with sale of goods while the Article 2A deals with leases of the same. I will discuss in details the role of Article 2 in the next paragraphs (John, 1991).

The general construction of Article 2

Article2 (sales) has seven parts with each providing a set of guidelines on the artifacts of sales. It deals with the selling of goods, acceptance of offers and terms and conditions of the sale itself. Moreover, it includes the warranties which form part of the sale. It allows for an experienced commercial lawyer to come in negotiating for the sales persons. The section 2102 of Article 2, effective as from the first of January 1964, states that it applies to all transactions on goods only unless the context necessitates otherwise. It therefore does not apply to the security transactions and other sales definitions. Furthermore, it doesn’t apply to the sale of services with the exception of a situation where the context dictates so. It gives the definitions of the elements that form part of the sales – the contract relate terms and the related concepts considering the situations in which each is to apply in the business context  .Its section 2103 (1) imposes definitions to the following sales terms:

a)       A “buyer” implies one who buys or contract s goods.

b)      Good faith is taken to mean the observance of the fairness

c)      Consumer has the meaning of an individual who either purchases or contracts to purchase goods.

d)      A consumer contract – the deal between the seller and the buyer.

e)      Delivery is the volunteer transportation of the goods to the buyer’s destination.

f)        Goods are all that are movable at the time of sale or contract.

There are other definitions given by this section and the second, third, fourth and fifth sections of this article. More important is the view of the formation and determination of a valid contract. The definitions are important aspects in the realization of the laws.

Contract formation

There are guidelines regarding the contract formation that must be followed to the later as directed by the statute. Before the contract can be formed, goods to be transacted must be in existence and not just a tale or future plans. The sale of a part of the identified goods is allowed for.  The quantity of goods to be sold is a choice left to the buyer and an agreement with the seller is respectable. These guideline and the definitions of lots (a single entity of sale or delivery) and commercial bulk (a single whole) in section 5 govern the contract goods subject matter.

 The contracts and agreements according to the context of the article are considered valid and irrevocable until the time state (up to 3 months being default) and must be appended a signature. The offer to buy goods by “timely shipment” attracts the approval by either timely shipment or by an agreement to ship. However, S2-206(1) provides for the alternative to have it not conforming to the goods in question. The termination of the contract is observed when either of the party pursues through the existing law to put an end to the contract. And cancellation is allowed if one party breaks a law governing the contract. Failure to state the price will not hinder the contract formation and a requirement contract assignment can be made if the sated assignment is not appropriate.

In order to maintain the contract, there are rules that should not be breached. These include the provision for perfect tender, nonconforming goods, reasonable requirements outputs, security grounds and good faith standards (Perry, 2010).

Contract breach

The elements of a good contract include: offer, acceptance, considerations and capacity to enter into a contract, intent and legality. If these are not in place, the defender breaches the contract, the plaintiff performed all the obligations before making for a lawsuit or notified the defendant on the breach (preferably in writing) and there are damages then the contract is breached.

The provisions for sale by a third party are provided for by the law. It considers the sale of minerals or materials to be removed from reality as a contract of sale of good as long as the purported present of sale is in existence as a contract to sell. The law advocates for the existence of a recording as a notice to the third party. It requires that the sale of property must be approved by a notice to the third party under the buyer’s rights. It ensures that the contract’s integrity is maintained.

In an example let us consider a purchase of roofing tile. A seller has an option to get the tiles to the buyer or not. If the seller is not willing to do so, the buyer has an option to find the tiles somewhere else. The seller agrees to send the buyer 100 tons of tiles on 3rd March at $500 per ton. If the seller calls the buyer on the 15th of February to report that he can’t produce the required number of tiles on time, the buyer is left with options.

If the market price has gone up (say $800 per ton) and the buyer has to find another seller, he can go on with the purchase from the new company under the new agreement and sue the first contractor for the extra money he will pay for the tile. The original seller is obliged to make for buyers the cover.

In the second scenario, the new company approached delivers the tiles at the time the initial company could have. The first company has a right to as well sue the buyer for failure to mitigate the damages.

In this case the statute of fraud rules that the sale of goods that cost over $500 must be in writing comes in. the exception that is obvious is the case where a merchant is selling goods to another merchant and this transaction not being the first one they have had. Hence the contract must not be in writing.

The Parol Evidence Rule is meant to prevent a party from presenting evidence to contradict what the writing says. It is allowed if the writing is incomplete, not the original, ambiguous, mistake or not true. If there was a mistake in the contract between the tile buyer and seller then the rule can come in. Section 2A202 of the Uniform Commercial Code provides for such kind of obligations. It also provide for the guide on what action to take in the case of frauds.


The Uniform commercial code was put in place to provide a guide on the transactions on goods.  It has seven parts that cover the questions that can arise in the commercial businesses and their set of solutions as per the agreements set. Part two of this statue (Article 2) is intended to provide guidelines on the sale of goods. It doesn’t include services. It has seven sections that provide for the definitions of the elements of the transactions as well as the rules to guide the sales of goods.

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