One of the drawbacks of our federalist system of government is that there can be significant differences in the law from state to state and between the states and the federal government. In general, differences in state laws present only minor inconveniences
to individuals and businesses that need to be aware of these differences when conducting business across state lines. There are, however, some areas in the law that are of particular importance to business and in which even small variations in the law from one state to another can have a very negative effect. Because of this, the National Conference of Commissioners on Uniform State Laws (NCCUSL) drafted the Uniform Commercial Code (UCC) in an attempt to unify state laws affecting commerce into a single code that all states could adopt to make interstate commerce easier and more efficient.
As a result of this concerted effort by some of this country’s leading legal experts, the UCC was enacted in whole or in part with only small changes by the legislatures of all states. While the UCC represents a significant effort toward a uniform national law, it should be remembered that there will still be variations from state to state, as different courts interpret the provisions of the statute.
The articles of the UCC are as follows:
Article 1 General Provisions
Article 2 Sales
Article 2A Leases
Article 3 Commercial Paper
Article 4 Bank Deposits and Collections
Article 5 Letters of Credit
Article 6 Bulk Transfers
Article 7 Warehouse Receipts, Bills of Lading, and Other Documents of Title
Article 8 Investment Securities
Article 9 Secured Transactions; Sale of Accounts and Chattel Paper
A complete treatment of the UCC is not possible here (the full text of the UCC is nearly 1,000 pages), but in this unit we will explore the most notable provisions of Articles 2 and 3 (Sales and Commercial Paper) that together make up the single most important statute in the field of business law.
In Unit 2, we examined the basic elements of the law of contracts and explored its application in a wide variety of business contexts. In the first three chapters of this unit, we will examine significant statutory modifications to the common law of contracts brought about by Article 2 of the Uniform Commercial Code with respect to contracts for the sale of goods. In Chapter 10, we will explore the law of commercial paper under the Uniform Commercial Code.
7 Learning Objectives
1. Define the concept of goods and be able to give examples of goods and non-goods.
2. Distinguish the common law rule on firm offers and the UCC rule with regard to merchants.
3. Explain how the UCC treats additional terms in an acceptance and distinguish the effect of such terms under the UCC and under common law.
4. Describe the concept of unconscionability and its effect on a contract.
5. Explain how the UCC rule for modification of a contract differs from the com- mon law rule.
6. Describe when sales of goods contracts must be in writing, and when oral con- tracts are enforceable.
7. Explain the parol evidence rule.