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In this module, we discuss UCC Article 2,
which is a special set of laws that provide
some additional rules when it comes to contracts for the sale of goods.
We've just spent an entire module talking about contracts, right?
You're probably sick of contracts,
you want to move on to something else, right?
Sorry, really more contracts.
Contracts are so important and I've said this before.
In this module, we are looking at a very specific type of contracts,
contracts for the sale of goods.
So, when you sell somebody goods,
we'll define that in a minute,
there are different rules than if you sell
somebody land or real estate, things like that.
So, in this lesson,
we're going to introduce what we call UCC Article 2.
Which pertains to the sale of goods, and through the rest of the module,
we're going to talk about some of the rules
the UCC Article 2 puts on top of contracts for the sale of goods.
So, let's back up for a minute.
What is the UCC or the Uniform Commercial Code?
This is a set of statutes that has been
adopted either in whole or in part in every state.
Now, states are required to have adopted
the Uniform Commercial Code but many of them have.
The reason it exists is because,
a group of legal scholars and practitioners got together over 60 years ago and said,
"It to be really, really helpful if
each state had some similar laws so that businesses that want
to conduct business in more than one state have an easy way to
know that things will pretty much be handled the same way as they cross state lines."
Thus, the Uniform Commercial Code was born.
UCC has a bunch of different articles.
Article 2 pertains to the sale of goods.
That's what we're talking about in this lesson
and the rest of the lessons in this module.
So, what is a good? A good is basically a tangible, movable thing.
Cars are good, pencils are good, equipments are goods.
Land, not a good.
Buildings, not goods.
For some, like a mobile home,
that's a movable building, that could be a good.
But a building that's affixed to land, not a good.
Patents and trademarks, not goods.
They're not tangible. Tangible, movable things are goods.
We have some special rules that we're going to apply to contracts for the sale of goods.
Now, before we get into those rules,
we have to make a very important distinction here,
the distinction between goods and services.
Because sometimes, you have contracts that call for
both goods and services and you need to think,
does UCC Article 2 apply to this contract?
Because if it doesn't,
then we just default to the common law
rules that we learned about in the previous module.
Agreement, consideration, capacity, legality in writing, all that kind of stuff.
All those rules still apply.
The UCC just changes some of them a little bit.
So, if the UCC applies and its a sale of goods,
then we have to apply the new rules from the UCC.
But if it doesn't,
then we just go back to the old contract rules we've already learned about.
So, the way we decide if a contract that contains goods and
services is governed by the UCC is by the predominant factor test.
The question is, what's the predominant factor of this contract?
Are the goods predominant,
or are the services predominant?
So, for example, if I buy a new car and the car comes with a lifetime of free car washes,
well, the car is a good.
The car washers are a service.
What's the predominant factor?
In this case, the car is clearly the predominant factor.
Would we buy a car without lifetime car washes?
Sure. Would we buy lifetime car washes without a car? Probably not.
So, the goods are the predominant factor and therefore,
UCC Article 2 applies to this contract.
Another important term that we need to define as we
move through our discussion of UCC Article 2 is what we call a merchant.
Now, merchants are a special type of people under
UCC Article 2 and special rules apply to transactions involving merchants.
A merchant is one of two things.
Most commonly, a merchant is someone who deals
in goods of the kind involved in that transaction.
So, if you go to a car dealership to buy a car.
The person selling you a car is a merchant of cars.
They're probably not a merchant of pencils but they're a merchant of cars.
They deal in that type of goods.
So, when you talk about a transaction involving a car,
the car dealer is a merchant and has special rules they must follow.
Another definition of merchants under UCC Article 2 is someone who holds him or herself
out as having some knowledge or skill peculiar to a type of goods.
So, for instance, I love barbecue.
I'm from Texas originally.
If I created a website to spout all of my encyclopedic knowledge of barbecue,
which by the way is extensive,
I might hold myself out as being an expert in the realm of barbecue.
That could qualify me as being a merchant in barbecue even though I don't sell barbecue.
I make it for my own personal use,
and my family, and my friends, but I don't sell it.
But if I hold myself out as an expert in barbecue,
I could also qualify as being a merchant in barbecue.
Professor Michael R FrickeTeaching Assistant Professor
