Understanding sales contracts

Understanding Sales Contracts and the Uniform Commercial Code (UCC)

For the business environment, it is essential to understand the sales contract. It is influenced by the Uniform Commercial Code (UCC), which is frequently used as a model act. The UCC is a comprehensive statutory framework that contains provisions that address the majority of transactional components. Additionally, when the UCC is silent, the common law of contracts only provides guidance. In other words, the purpose of the UCC is to avoid some of the restrictions included in common law contracts in order to facilitate sales and business operations.

Application of UCC Art. 2 in Sales Contracts

As a default, the UCC Art. 2 is applicable in order to close any gaps in the sales of contract. It is clear that issues like good faith are challenging to address in a sales contract; hence, the need to implement the UCC. Both the buyer and seller have specific duties when conducting business. For instance, the general expectation is that they will act in good faith. In that regard, the seller is expected to tender what the buyer wants. It is the reason why products normally have warranties to follow-up with the seller in case the goods do not meet the expectations. Moreover, there are different types of warranties each having distinctive functions.

Differences between Common Law and UCC in Sales Contracts

In a business environment, it is also important to understand the differences between the common law of contracts and the UCC revolving around firm offers, warranties, perfect tender rule, open price term, good faith modifications, and the statute of frauds among others. Comprehending these elements enlightens the seller and buyer about the remedies in case of a breach. It is also worth noting that when a change is made to the offer, it leads to total rejection according to the Common Law. On the other hand, the UCC allows for modifications and cannot an offer cannot be canceled.

References

Chapter 11: Sales and Lease Contracts (2016). [Motion Picture]. Retrieved from https://www.youtube.com/watch?v=Fmcz1HTI8R0

William H. Lawrence, & William H. Henning (2006). Understanding Sales and Leases of Goods. Matthew Bender & Company, Inc.