UCC article 2

A tremendous amount of business is conducted via purchase orders without signed contracts. Overall, this is good for commerce because business doesn’t have to screech to a halt every time a company needs to buy something, to give the lawyers time to work out the legal terms. But if there’s no signed contract, how do you know when a contract has been formed, and how do you know what the terms of the contract are?

These are million-dollar questions that are very difficult to answer and which are often litigated. In fact, it’s impossible to know the answers until after the fact because they depend on the specific facts and circumstances of each individual transaction.

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Here are a few pieces from the Interwebs I found interesting. Maybe you will also….

Dine and Dash 101. There are two kinds of truffles. My favorite is made of chocolate and is a reasonably priced treat. The other is for those with a more talented palate and deeper pockets that I have. Truffle hunting is tedious business and truffles are extraordinarily expensive, as a diner at a Manhattan restaurant discovered when he ordered the pasta lunch special without inquiring about the price, which turned out to be $275. His story made the New York Times last month, and the ContractsProf Blog posted a quick lesson on the application of Article 2 of the Uniform Commercial Code to the situation.

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You sign two identical contracts with two different suppliers, one to buy stuff and the other to buy services. If both of your suppliers default in the exact same way, your rights will be the same under each contract, right?

Probably not, because the law that applies to the sale of goods is not the same as the law that applies to the sale of services. There’s a lot of overlap, and most contract law principles apply to both, but the law isn’t the same. [click to continue…]

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Article 2 of the Uniform Commercial Code governs the sale of goods. Whether software is a good is a thorny question, and a lot of variables affect the answer. In this excellent Law Technology News post, Richard Raysman and Peter Brown, of Holland & Knight and Baker & Hostetler respectively, summarize the issues and eloquently provide the obvious lawyerly answer: it depends.

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