Sales and Leases | 33
I. Introduction to UCC Article 2
Whether in times of war, peace, prosperity, or economic hardship, transactions in goods are civilization’s life blood, as they have been from time immemorial. To that end, a nexus of expectations surrounds every transaction in goods, whether small or great. For one, each transaction in goods represents a bargain. So, the parties must understand and agree on the bargain’s terms, and ideally, the parties must honor those terms. The goods themselves must conform to some identifiable standard of fitness, quality, or suitability for a purpose. Finally, if things go wrong (and they do), the law must afford a remedy. In the United States, the law addressing these needs appears in Article 2 of the Uniform Commercial Code (UCC), as enacted in each state except Louisiana. Article 2, along with its younger cousin Article 2A (dealing with leases of goods), is the subject of this outline. [ See D. Whaley, S. McJohn, Problems and Materials on Commercial Law p. 9 (11th ed. 2016).] Scope of Article 2 UCC Article 2 applies to transactions in goods . Article 2 does not apply to any transaction meant to operate only as a security transaction—even if the transaction’s form is that of a present sale or an unconditional contract to sell. [U.C.C. § 2-102 (1951).] 1. Transaction in Goods Defined The UCC does not define the term transaction in goods. Practically speaking, the transactions to which Article 2 applies are usually sales of goods. Though sometimes, Article 2 may apply to a transaction that is not a sale, transaction is a broader term than sale. A transaction in future goods is a transaction in goods. [ See U.C.C. § 2-105(2) (1951); 2 Anderson U.C.C. § 2- 102:5 (3d. ed.), Westlaw (database updated Dec. 2020); Future Goods, infra .] a. Sale Defined In Article 2, a sale is (1) the passing of title to goods (2) from a buyer to a seller (3) for a price. [U.C.C. § 2-106(1) (1951).] b. Contracts and Agreements for the Sale of Goods Unless the context requires otherwise, the terms contract and agreement are limited, in Article 2, to those involving the present sale of goods or the future sale of goods. In a present sale, the mere making of the contract accomplishes the immediate transfer of title in the goods from the seller to the buyer for a price. A future sale contemplates that this transfer of title for a price will occur sometime after contracting. Either a present or a future sale of goods is a contract for the sale of goods governed by Article 2. [U.C.C. § 2- 106(1) (1951); 2 Anderson U.C.C. § 2-106:32 (3d. ed.), Westlaw (database updated Dec. 2020).]
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