Uniform Commercial Contracting In Commercial Law
The completion of UCC contracts….
Recall the questions presented in Module I. Consider the application of forming a commercial contract.
In forming a commercial contract, express provisions are important. The UCC deals with two sophisticated merchants. It is important to understand as a business manager that you have an obligation to set forth the terms of your deal or transaction. The UCC will hold you to the task of writing and signing off on deals that are over $500.00. Yet, there are instances where the fast-moving world in which we operate might call for an e-mail agreement, or even oral provisions that shape a written agreement. REMEMBER! There is no substitute for written requirements, but between two merchants (that means any two companies, an oil company and a clothier seller, or Pepsi Cola and HEB Foods, etc.) there are course of dealing or usage of trade considerations—review those terms and know what they mean. Be able to apply them. Further, Gap fillers are extremely important under the UCC regarding sales and commercial contracts—a battle of the forms, if you will. This involves where two merchants leave silent essential terms in an agreement. In some instances, the UCC will supply missing terms to complete and effectuate the contract.
Make sure you understand shipping and title considerations under the UCC as to merchants and transporters. Who bears the Risk of Loss?
In relation to this concept, we look to breach of contract and remedy requirements as to two commercial parties.
Important, students should have a working knowledge of what a manager for a seller or buyer has an obligation to do regarding goods. These include inspection and warranty requirements, acceptance or rejection of terms, rights to cure a breach, and other particularized remedies to buyers and sellers. Students should review these and know them well.
Application:
Gordon Lefter is a manager for Oiltera LLC, a cotton seller in New Mexico. Oiltera sends a contract request for steel gins to Pompei, Inc., an Italian manufacturer. The contract from Lefter to Farina Jacques stated that Oiltera would purchase 7000 steel gins from Pompei delivered to port 87354_ in Galveston, Texas and to come to Eunice, New Mexico via shipping company JackWheel Freight, a sole-proprietorship.
Discuss how this contract might be completed of it is signed by all parties, but Oiltera leaves out a price term. What other essential terms might be missing from this agreement? Are gap fillers available to remedy such missing terms? What type if so? If not, why?
What would happen if Pompei sent a response to Oiltera’s original e-mail stating “to deliver on August 31, 2015.” Yet, Oiltera never responded and then sued Pompei for delivery on August 31, 2014?
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