Uniform Commercial Code and Its Application to Contract Law
The Uniform Commercial Code (UCC) is a framework of statutory laws that governs the sale and purchase of goods (personal property). While certain elements of standard contract law may still apply to sales of goods, Article 2 of the UCC creates special rules for formation of goods contracts, as well as buyer and seller remedies in the event of a contract breach. Those with specific questions about the UCC or contracts for sales of goods should contact an attorney.
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Uniform Commercial Code
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The UCC is a set of "uniform laws." In 1982, the National Conference of Commissioners on Uniform State Laws was formed to create uniform laws that would minimize the difference in laws between American states. However, these uniform laws are not legally valid until all states choose to adopt them by statute. The UCC, a set of laws created to govern sales of goods, constitutes one of the Commission's more successful efforts. Some permutation of the UCC currently operates in most U.S. states.
Acceptance of Offers
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In contract law, offers to make a contract must usually be accepted in a manner stipulated in the offer before a contract is formed (this is known as the "mirror image rule"). However, under the UCC, most offers can be accepted in any "reasonable" manner; the reasonableness of a specific offer will be a factual determination by a court. However, if an offer to buy goods stipulates "prompt and current shipment," the UCC allows acceptance in the form of a promise to ship promptly or by a prompt shipment of goods, whether or not the buyer has been notified of the acceptance.
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Additional Terms
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Sometimes a party will accept another party's offer to make a contract, but his acceptance will include different or additional terms from the original offer. In ordinary contract law, these additional terms generally do not constitute an acceptance; rather, they are a counter-offer, which the original offering party may then accept. However, under the UCC, a timely acceptance with additional terms will create a contract incorporating the new terms, unless those new terms constitute a serious change to the contract, the offer's language specifically requires acceptance of the offer's terms, or the offering party objects very quickly (or has already objected) to the new terms.
Buyer in Breach
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Should a buyer of goods breach his duty to perform under the contract (i.e., fail to pay), the UCC allows a number of remedies for the seller. The seller may refuse to deliver the goods, sell the goods to another party and sue the buyer for any difference in purchase price (this is known as "covering"), or recover any economic damage to the seller caused by the buyer's failure to complete the sale. Under some circumstances, the seller may sue for the price of the contract; if he wins, he must deliver the goods to the buyer. The seller may also simply cancel the entire contract if the buyer fails to perform.
Seller in Breach
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Should the seller of goods fail to deliver the goods or deliver goods substantially different from those stipulated by the contract, the UCC offers the buyer a range of remedies, depending on the type of breach of the sales contract. The buyer may cancel and recover any portion of the purchase price that he has already paid, he can buy replacement goods and sue the seller for any loss incurred by the substitution, or he can simply sue the seller for damages based on the failure to deliver. If the goods not delivered are unique or difficult to replace, the buyer may also attempt to force the seller to turn over the goods.
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