INTRODUCTION TO STATUTORY LAW METHOD: UNIFORM COMMERCIAL CODE ARTICLE 2 – SALE OF GOODS

I.                    

A.     An Introduction to Article 2

                                                              i.      The Creation of the UCC

1.      Enacted in every state except Louisiana

                                                            ii.      The Style and Jurisprudence of the UCC

1.      Text of UCC-1-102:

a.       This Act shall be liberally construed and applied to promote its underlying purposes and policies.

b.      Underlying purposes and policies of this Act are:

                                                                                                                                      i.      to simplify, clarify, and modernize the law governing commercial transactions

                                                                                                                                    ii.      to permit the continued expansion of commercial practices through custom, usage and agreement of the parties

                                                                                                                                  iii.      to make uniform law among the various jurisdictions

2.      The UCC tries to find acontract whenever legally possible; if UCC is silent on an issue, state common law will decide.

                                                          iii.      Working with Article 2

B.     The Scope of Article 2

                                                              i.      Covers the sale of goods, which are moveable at the time of the sale.  If it is not a sale of goods, it is not covered by the warranty provision of Article 2 of the UCC.

                                                            ii.      In cases of mixed transactions, most jurisdictions follow one of two approaches:

1.      “Gravamen” Test – looks to that portion of the transaction upon which the complaint if based to determine if it involved the sale of goods or services.

2.      “Predominant Factor/Predominant Purpose” Test – looks at the transaction as a whole to determine whether its predominant purpose was the sale of goods or the provision of a service.  Takes into account the following factors:

a.       Language of the parties’ contract,

b.      The nature of the business of the supplier of the goods and services,

c.       The reason the parties entered into the contract (i.e. what each bargained to receive), and

d.      The respective amounts charged under the contract for goods and services.

Note: Even where the cost of goods exceeds the cost of the services, the predominant purpose of the contract may still be deemed the provision of service where the other factors support such a finding.