#11437 - Ucc And So F - Contracts

UNIFORM COMMERCIAL CODE

1. Overview:

   1. Purpose:

      1. In US, common law is generally a matter of state law. Differences in state common law is problematic when economy is national.

      2. More flexible and contextualized than Classical Contract Theory

   2. Articles

      1. 3-9 = banking and finance

      2. 1 = general principles

      3. 2 =sale of goods:

   3. No uniform states for

      1. Sales and leases of real estates

      2. Employment agreements

      3. Service agreements

      4. Sales and licenses of intellectual property

2. Goods

   1. Section 2-105(1): Goods’ means all things (including specially manufactured goods) which are moveable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8), and things in action

      1. must be moveable

      2. excludes physical things of largely intangible value (like a movie ticket)

      3. Chattels

   2. Pittsley v. Houser (pg 74) – agreement to purchase and install carpet. Mixed goods and services. 2 methods

      1. Bifurcate transaction

      2. Categorize based on predominate element (they adopt this approach, and rule the predominant element is a sale of a good)

3. Unconscionability

   1. Modern doctrine to police harsh bargains

   2. “intensely factual question;” super flexible

      1. Absence of meaningful choice

      2. Whether party had reasonable opportunity to understand the terms or “hidden in a maze of fine print/minimized by deceptive sales practices.”

      3. Whether terms are commercially reasonable

      4. The mores and business practices of the time and place (this is of debatable relevance

   3. § 2-302 of the Uniform Commercial Code

   4. Wright writes “The test is not simple, nor can it be mechanically applied.” No algorithm. Contextual judgment.

      1. Does the contract diminish the expected welfare of the buyers, and if so why?

      2. Why do people enter into contracts that are expected to diminish their welfare?

   5. Williams v. Walker Thomas (pg 63): Every time Williams bought something new from the store on credit, it made it harder to pay off the balance on earlier items on which a balance was due. Perverse because the value of the term to the store depends on whether a buyer is a repeat customer. Predictably hard on buyers, dubious utility to seller. Buyer likely unaware of the obnoxious term – hidden and obscure. Even if they are aware, they are likely to underestimate the risk the terms will come into play. Remand to determine unconscionability.

      1. Henningsen v. Bloomfield Motors (cited in the above): used doctrine to invalidate a term in a standard form automobile sales agreement absolving the manufacturer and dealer from liability for personal injury even if the auto was defective

   6. Maxwell v. Fidelity Financial Services: harmful because Maxwells could not afford and probably did not need a solar water heater, given wealth and income. But Maxwells were told how costly the heater would be and the financing charge. Maybe people are especially vulnerable to making bad decisions in home sales. Remand to determine unconscionability, although factors above don’t really apply.

STATUTE OF FRAUDS within the statute = requires written evidence

1. Purpose:

   1. Evidentiary

   2. Cautionary

2. Oral

   1. Agreement must be performed within...