O most states then decided to adopt most of the ucc

o Most states then decided to adopt most of the UCC for their contract law.
o States retain some of their old common law rules for some contract law
issues and use some of the UCC rules for other issues.
 Article 2 of UCC = section that governs sale of goods
o I. Contract Formation:
 Firm Offer Rule = if a merchant signs a written promise to keep an
offer open for a set amount of time, it must honor this promise
even if it has received no payment.
o II. Contract Enforcement:
 Statute of Frauds Provision = sale of goods contract over $500
must be in writing to be enforceable.
 Verbal Agreements under $500 can be seen as enforceable
contracts
o III. Contract Interpretation:
 Courts resolve disputes in contracts by examining: course of
performance (what happened in performance of contract), course
of dealing (what happened when other contracts between these
parties were performed), and usage of trade (what is the industry
standard for this type of contract).
o IV. Duty of Good Faith:
 Everyone has an obligation of good faith but merchants have a
duty to be “honest and observe reasonable commercial standards
for fair dealing in the trade”
 Good = tangible, movable, physical object (laptop is a good but house is not)

 Sale of Goods is governed by article 2, sale of non-goods (employment contract,
labor or real estate) = common law
 Merchant = “deals with goods of the kind”. Often someone that makes their living
off of selling a good.
o Merchants have special obligations under article 2
 International Sale of Goods Contract Conventions:
o United Nations Convention on Contracts for the International Sale of
Goods (CISG) = body of contract law adopted by most nations including
US for international contracts.
o Automatically use CISG unless parties opt to use a different body of law
beforehand.
 Warranty = Promises that goods will meet various standards
o Express Warranties = Warranty created by a seller’s words or actions.
“This tool will last for 5 years”
o Implied Warranties = Warranty that the UCC created.
o Implied Warranty of Merchantability = Promise that when a merchant sells
goods, these goods are fit for their ordinary purposes.
-disclaimer doesn’t have to be in writing but if so should be
conspicuous
o Implied Warranty of Fitness = When a seller knows that a buyer needs a
product for a specific use, and that buyer will rely on the seller’s
recommendation or expertise, goods are not fit for expressed purpose.
-disclaimer must be in writing and conspicuous
o Implied Warranty of Title = Guarantee that items sold have not been
stolen and are not encumbered by security interests.
o A breach in warranty can often result in compensatory but not punitive
damages.
o Disclaimer = seller can disclaim warranties verbally but more often in
writing.