Uniform Commercial Code ? Scope and Formation

AuthorFranklin G. Snyder, Mark Edwin Burge
Pages175-194
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UNIT 10: UCC SCOPE AND FORMATION 175
Unit 10
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ALTERNATIVE REGIMES
Part One
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Uniform Commercial Code Scope and Formation
FOCUS OF THIS UNIT
Welcome to the Uniform Commercial Code. The Uniform Commercial Code
has major substantive divisions dealing with different topics, each one of which is
known as an “article.” Every article is then divided into “sections,” which are like code
sections you have seen in other contexts. Article 1 (“General Provisions”) contains
principles and definitions that apply to the rest of the code, so it can come up in any
study of the UCC, including in a basic course on contracts. Other UCC articles
frequently arise in upper level law school courses, perhaps most prominently Article
3 (“Negotiable Instruments”), Article 4 (“Bank Deposits and Collections”), and Article
9 (“Secured Transactions”). The UCC as a whole was largely developed in the 1940s
and 1950s as a joint effort by the American Law Institute (whom you may already
recognize as the drafters of all the Restatements) and the National Conference of
Commissioners on Uniform State Laws (now better known as the “Uniform Law
Commission”), both being groups comprised of law professors and practicing lawyers.
Most state enactments of the UCC first occurred in the mid-to-late 1960s.
Welcome to UCC Article 2 on Sales of Goods. The part of the code that we
(and by “we,” of course, we actually mean “you”) will study most for this course is
Article 2, which governs sales of “goods.” Article 2 has been adopted in every
American jurisdiction except Louisiana,
1
and it was designed with the goal that
people and companies selling products nationally should not have to worry about the
specific contract law of every state. Like many pieces of legislation, Article 2 reflects
a number of political compromises, balancing the interests of big businesses, small
businesses, and consumers, and of both buyers and sellers. It was also largely written
by law professors, who are (you may have already recognized) are not always noted
for their clarity in communication. As a result, it is not always a model of clarity or
1
[Louisiana has a French-based civil code system known as “Obligat ions” in lieu of the
British-originated common law of contracts. Louisiana has adopted some parts of the Uniform
Commercial Code, but not UCC Article 2, which is the principal subject of this unit. Eds.]
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176 CHAPTER IV: ALTERNATIVE REGIMES
consistency. Some provisions have proved extremely successful in practice, others less
so. In particular, many have criticized the Code as not particularly responsive to
consumer problems, and as a result nearly every state has specific consumer-
protection laws that supplement both the Code and the common law of contracts.
In many areas, the rules of Article 2 are similar to those of the common law,
but in a number of important contact doctrines the rules are significantly different.
These differing rules, as you can see from the cases below, can cause different results
in cases than if we applied the common law.
One of the most important takeaways from this unit should be an
understanding of which contracts are governed by Article 2. The cases below also
address offer, acceptance, and consideration in the context of contracts for the sale of
goods. In subsequent units, we will occasionally see how differences between the
common law and the UCC play out in other areas.
The UCC is State Law, not Federal Law. Some law students tragically assume
that because the Uniform Commercial Code is the law of nearly all states, it is federal
law. That assumption is profoundly wrong. The Uniform Commercial Code is state
law that must be enacted by state legislatures to be effective. State legislatures
occasionally enact UCC sections that vary in some way from the “official” UCC text
we will consider here. The state supreme court in each state has the authority to
make the definitive interpretation of an enacted UCC section in that state. Thus, if
the Texas Supreme Court interprets a code provision one way, but the Missouri
Supreme Court later interprets the identical provision in a way that conflicts with
the Texas case, both interpretations are binding as the law of each court’s home state.
If you ask us, we think a more accurate name for the Uniform Commercial Code would
be the “Mostly-but-not-entirely ‘uniform’ Commercial Code.” But nobody asked us.
Much Common Law Coexists with the UCC. Although we will tend to focus on
areas where UCC Article 2 changes the result under the common law, you should
understand that the UCC explicitly endorses the use of the common law (and other
law) in areas that it does not address. Take a moment to read UCC § 1-103(b) for the
definitive statement of this principle. In situations that it does not address, UCC
Article 2 assumes the existence ofand applicability ofthe common law of
contracts.
What Is an “Official Comment,” Anyway? In many UCC cases, courts will
refer to or quote from the official comments to the UCC, which are paragraphs
sometimes numberedthat follow each section of the code. You can think of these
comments as a sort of legislative history. The drafters of the code wanted to explain
what the origin or intent was for specific code sections, and they put those
explanations into a comment rather than in the text of the statute. Like other
legislative history, the official comments are not “law” and courts are not bound to
follow them. While the official comments are merely persuasive authority, you should

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