[B] The Uniform Commercial Code.

Alongside the Common Law, the Lex Mercatoria, the Law Merchant found a home in England. As one historian has noted: ''The merchants carried their own law, as it were, in the same consignment as their goods, and both law and goods remained in the places where they traded and became part of the general stock of the country. With small variations, the law in all [European and Near Eastern] countries was homogenous, being perhaps the least adopted in our own [England].''n14 There was a distinct substantive law applied to merchants and separate tribunals for its application. In the eighteenth century, however, the Law Merchant was absorbed into the main stream of the common law and traditional ways of determining mercantile disputes were discouraged. The notion that sales of goods deserved a regime separate from the general law of contracts never quite lost its grip. Similar thinking persisted as to other kinds of mercantile transactions. A Sale of Goods Act was enacted in England in 1893. In the United States the National Conference of Commissioners on Uniform State Laws commissioned and in 1906 proposed similar legislation for the States. Over 80% of our States enacted the Uniform Sales Act. In time, the Uniform Sales Act and other Uniform Acts dealing with commercial matters were seen as inadequate and steps were taken to prepare what eventually became the Uniform Commercial Code.

The Uniform Commercial Code is the product of a Permanent Editorial Board under the joint auspices of the American Law Institute and the National Conference of Commissioners on Uniform State Laws.n15 A draft was approved by these bodies in 1952. In 1953, it was enacted by Pennsylvania as the law of that Commonwealth. No other state followed. In 1956 the New York Law Revision Commission recommended against enactment unless extensive amendments were made. Reacting to the New York report, the Permanent Editorial Board made extensive revisions. As so revised it was enacted by all the states except Louisiana between 1957 and 1967. The enactments were not wholly uniform, as many of the states have varied from the Uniform text at some points. In addition, the Code contained several optional provisions. These variations are noted in the ''Uniform Laws Annotated'' edition of the Code. Editions published in local state collections of statutes will usually indicate instances in which the local enactment varies from the uniform text.

The Uniform Commercial Code originally contained ten articles.n16 Article 1 contains general provisions applicable to all transactions governed by the Code. Article 2 governs the sale of goods; Article 3, commercial paper; Article 4, bank deposits and collections; Article 5, letters of credit; Article 6, bulk transfers; Article 7, warehouse receipts, bills of lading and other documents of title; Article 8, investment securities; Article 9, secured transactions, sales of accounts and chattel paper. Article 10 is a transitional article, indicating the effective date of the Code in the jurisdiction and indicating which laws are repealed. In 1987 a new proposed Article 2A was approved by the Permanent Editorial Board governing the topic of the leasing of goods.n17 Subsequently, Article 4A governing electronic funds transfers was adopted. Since its initial approval, many amendments to the Code have been adopted by the Board and many more doubtless will be approved in the future.

Most of the provisions of the Code do not affect basic contract law; those that do are mostly contained in Article 2, which deals with the sale of goodsn18 and in Article 9 which deals, among other things, with the assignment (transfer) of some contract rights. As the most recent legislative statement of certain contract principles and rules, Article 2 of the Code has increasingly been looked to by courts for guidance in transactions other than the sale of goods. This phenomenon is explored in § 1.22 below.

The Code was published with official comments prepared by the Permanent Editorial Board. The ''General Comment'' introductory to the Code indicates that the purpose of the comments is to promote uniformity and ''to aid in viewing the Act as an integrated whole, and to safeguard against misconstruction.'' The Act itself is law in the 49 states that have adopted the Code, but the comments are not since they have not been enacted by the legislatures.n19 The comments have proved valuable. The courts have repeatedly turned to them in resolving issues. Of course, if the Code and a comment are in conflict, the Code must prevail.

The contract provisions of Article 2 of the Code make many changes in traditional contract law with the result that very often there is a different rule for ''contracts for sale'' than for other contracts such as for labor, services and the sale of land.n20 The Code does not change all the traditional rules; where it is silent, the traditional rules prevail even as to contracts for sale.n21 As indicated below,n22 there is a marked tendency to employ the Code by analogy, to transactions outside its coverage. In addition, the Restatement Second has recast many of the provisions of the Restatement First to harmonize them with the Code. The foreseeable result is that in future decades the principles underlying the contract provisions of Article 2 will be the law of the land even for contracts not governed by the Code.

Unlike the ancient Law Merchant, Article 2 of the Uniform Commercial Code governs contracts for the sale of goods, whether the seller is a merchant or a casual seller. However, some of its provisions treat merchants, sellers or buyers, differently. The Code defines a merchant, as paraphrased in a leading case,n23 as follows:

A person is a ''merchant'' if he (1) deals in goods of the kind, or (2) by his occupation holds himself out as having knowledge or skill peculiar to the practices involved in the transaction, or (3) by his occupation holds himself out as having knowledge or skill peculiar to the goods involved in the transaction, or (4) employs an intermediary who by his occupation holds himself out as having such knowledge or skill, and that knowledge or skill may be attributed to the person whose status is in question.

Despite the clarity of this definition there are many borderline situations. For example, the courts are divided on the question of whether a farmer who sells his crop once a year is a merchant or a ''casual seller.''n24