Unit 5 Key Concepts Key Concept 1: What is the Uniform Commercial Code? This unit describes many key provisions of the Uniform Commercial Code (UCC). The UCC was written in the 1950s by a group of legal scholars and experts. It started as an ideal set of rules, but its authors were not members of Congress or state legislatures, and they had no power to make the UCC law. They did, however, hope that the new rules would one day become law. A key part of the pitch that the creators of the UCC made to state legislatures around the United States went something like, "As it stands now, contracts are defined by each individual state. Texas rules are not necessarily the same as those in Illinois, Kansas, or anywhere else. It would be much more efficient if every state adopted the same set of rules for certain types of contracts. Then, a business that wanted to do business all over the country might only need to be familiar with a single body of contract law." Over time, the individual states agreed and adopted most or all of the UCC as law. In the end, states have retained their old common law rules for some issues in contract law, and have replaced the common law with UCC rules for other issues. Much of the reading assignment that accompanies this unit examines Article 2 of the UCC. This section governs contracts that involve a sale of goods. Goods are tangible, movable, physical objects. And so, a laptop is a good, but a house is not. A bottle of Diet Coke is a good, but an acre of land is not. In short, goods are things. It is sometimes not easy to tell whether a transaction deals with goods or services, as Rottner v. AVG Technologies illustrates. If two people or businesses make a contract that involves selling goods, and if there is a dispute that leads to a lawsuit, then Article 2 rules will govern the case and will be used to determine what should happen. If people sue over a contract that involves non-goods (like an employment contract, in which people are selling their labor, or a contract to sell real estate), then
common law principles would be relevant and Article 2 of the UCC would not be. A Merchant Key Concept 2: What is a merchant? The UCC often has special rules for merchants, which it usually defines as those who "deal with goods of the kind." Merchants generally make their money selling these goods of a particular kind. Manufacturers, wholesalers, and retailers are obviously merchants. When a car dealer sells you a car, the dealer is acting as a merchant. If you buy a used car from an average person you found online, then the seller is not acting as a merchant. To summarize what has been covered in this unit so far, note that there are three new ideas: 1. The UCC is a body of law.
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