- •§ 1.Syn Synopsis to Chapter 1: preliminary definitions 4
- •§ 2.17 Effect of Delay in the Delivery of an Offer 268
- •§ 2.17 Effect of Delay in the Delivery of an Offer 268 § 1.1 The Main Purpose of Contract Law Is the Realization of Reasonable Expectations Induced by Promises
- •§ 1.2 Legal Obligation Defined
- •§ 1.3 N1 Definition of the Term ''Contract''
- •§ 1.4 Contracts of Adhesion
- •§ 1.5 Formal and Informal Contracts
- •§ 1.6 Voidable Contracts
- •§ 1.7 Void Contracts
- •§ 1.8 Unenforceable Contracts
- •§ 1.9 Agreement Defined
- •§ 1.10 ''Bargain'' as a Contractual Expression
- •§ 1.11 Offer Defined
- •§ 1.12 Simultaneous Expressions of Assent: Contracts Without Offer and Acceptance
- •§ 1.13 What Is a Promise?
- •§ 1.14 Promise and Warranty
- •§ 1.15 Expressions of Intention, Hope, Desire, or Opinion
- •§ 1.16 Letters of Intent
- •§ 1.17 Illusory Promises
- •§ 1.18 N1 Assumpsit: Implied Assumpsit, Indebitatus or General Assumpsit, Special Assumpsit
- •[A] Implied Assumpsit
- •[B] Indebitatus or General Assumpsit
- •[C] Special Assumpsit
- •§ 1.19 Express and Implied Contracts
- •§ 1.20 Contract and Quasi Contract Distinguished
- •[A] Quasi Contract as a Source of Primary Rights
- •[B] Quasi Contract as a Remedial Device for Unwinding Failed Agreements
- •§ 1.21 General Contract Law, The Uniform Commercial Code, and the United Nations Convention on Contracts for the International Sale of Goods. [a] General contract law and the Restatements
- •[B] The Uniform Commercial Code.
- •[C] The United Nations Convention
- •§ 1.22 The Uniform Commercial Code as a Source of Common Law
- •§ 1.23 Unilateral Contracts Distinguished From Bilateral
- •Supp. To § 1.1 The Main Purpose of Contract Law Is the Realization of Reasonable Expectations Induced by Promises
- •Supp. To § 1.2 Legal Obligation Defined
- •Supp. To § 1.3 Definition of the Term ''Contract''
- •Supp. To § 1.4 Contracts of Adhesion
- •Supp. To § 1.6 Voidable Contracts
- •Supp. To § 1.7 Void Contracts
- •Supp. To § 1.9 Agreement Defined
- •Supp. To § 1.11 Offer Defined
- •Supp. To § 1.13 What Is a Promise?
- •Supp. To § 1.14 Promise and Warranty
- •Supp. To § 1.15 Expressions of Intention, Hope, Desire, or Opinion
- •Supp. To § 1.16 Letters of Intent
- •Supp. To § 1.17 Illusory Promises
- •Supp. To § 1.18 Assumpsit: Implied Assumpsit, Indebitatus or General Assumpsit, Special Assumpsit
- •Supp. To § 1.19 Express and Implied Contracts
- •Supp. To § 1.20 Contract and Quasi Contract Distinguished
- •Supp. To § 1.22 The Uniform Commercial Code as a Source of Common Law
- •Supp. To § 1.23 Unilateral Contracts Distinguished From Bilateral
- •Part I formation of contracts topic a offer and acceptance chapter 2 offers; creation and duration of power of acceptance
- •§ 2.1 Preliminary Negotiation
- •§ 2.2 Preliminary Communications Compared to Offers-Interpretation
- •§ 2.3 Request for an Offer Is Not an Offer-Auctions and Solicited Offers
- •§ 2.4 N1 Offer by Publication or Advertisement
- •§ 2.5 Quotation of Prices; Estimates
- •§ 2.6 Authority or Instructions to an Agent
- •§ 2.7 N1 Offers at the Supermarket or Self-Service Shop
- •§ 2.8 Partial Agreements-Agreements to Agree and Agreements to Negotiate
- •§ 2.9 Formal Document Contemplated by the Parties
- •§ 2.10 What Constitutes a Written Contract-There May Be a Series of Communications
- •§ 2.11 Delivery of a Document as the Final Expression of Assent
- •§ 2.12 Printed Terms on Billheads, Letterheads, Receipts, Baggage Checks, etc.
- •§ 2.13 Intention to Affect Legal Relations-Social Engagements, Gentlemen's Agreements, Jests and Sham Agreements
- •§ 2.14 Duration of Power of Acceptance Created by an Offer
- •§ 2.15 Missed Deadlines in Option Contracts
- •§ 2.16 Reasonable Time for Acceptance
- •§ 2.17 Effect of Delay in the Delivery of an Offer
- •37 Of 174 documents
- •§ 2.18 Offers Are Usually Revocable
- •38 Of 174 documents
- •§ 2.19 Notice of Revocation Necessary
- •39 Of 174 documents
- •§ 2.20 Revocation Otherwise Than by Direct Notice
- •40 Of 174 documents
- •§ 2.21 Revocation of General Offer by Publication
- •41 Of 174 documents
- •§ 2.22 Irrevocable Offers-Meaning of ''Irrevocable''
- •42 Of 174 documents
- •§ 2.23 Options Created by a Conditional Contract or Covenant
- •43 Of 174 documents
- •§ 2.24 Contract to Keep an Offer Open
- •44 Of 174 documents
- •§ 2.25 Effect of the Rule Against Enhancement of Damages
- •45 Of 174 documents
- •§ 2.26 Offers Made Irrevocable by Statute and Public Policy
- •46 Of 174 documents
- •§ 2.27 Deposits to Be Forfeited in Case of Revocation
- •47 Of 174 documents
- •§ 2.28 Irrevocable Offers Under Seal
- •48 Of 174 documents
- •§ 2.29 Revocation After Part Performance or Tender by the Offeree
- •49 Of 174 documents
- •§ 2.30 Real Estate Brokerage and Other Agency Cases
- •50 Of 174 documents
- •§ 2.31 N1 Effect of Action in Reliance That Is Not Part Performance
- •51 Of 174 documents
- •§ 2.32 N1 Part Performance and the Indifferent Offer
- •52 Of 174 documents
- •§ 2.33 When a Standing Offer of a Series of Separate Contracts Is Irrevocable
- •53 Of 174 documents
- •§ 2.34 Effect of Death or Insanity on Power of Acceptance
- •54 Of 174 documents
- •55 Of 174 documents
- •56 Of 174 documents
- •57 Of 174 documents
- •58 Of 174 documents
- •59 Of 174 documents
- •60 Of 174 documents
- •61 Of 174 documents
- •62 Of 174 documents
- •63 Of 174 documents
- •64 Of 174 documents
- •65 Of 174 documents
- •66 Of 174 documents
- •67 Of 174 documents
- •68 Of 174 documents
- •69 Of 174 documents
- •70 Of 174 documents
- •71 Of 174 documents
- •72 Of 174 documents
- •73 Of 174 documents
- •74 Of 174 documents
- •75 Of 174 documents
- •76 Of 174 documents
- •77 Of 174 documents
- •78 Of 174 documents
- •80 Of 174 documents
- •§ 3.2 In a Bargaining Transaction, Only the Offeree Has Power to Accept
- •81 Of 174 documents
- •§ 3.3 Assignment of Power by an Option Holder-Irrevocable Offers
- •82 Of 174 documents
- •§ 3.4 Motive With Which Offeree Renders Performance
- •83 Of 174 documents
- •§ 3.5 Knowledge of Offer as a Pre-requisite to Acceptance
- •84 Of 174 documents
- •§ 3.6 Knowledge of the Offer After Part Performance Already Rendered
- •Illustration 1
- •85 Of 174 documents
- •§ 3.7 Acceptance ''Subject to Approval'' by a Third Party
- •86 Of 174 documents
- •§ 3.8 Acceptance by Overt Act
- •87 Of 174 documents
- •§ 3.9 Unilateral Contract-Acceptance by Beginning Requested Performance
- •88 Of 174 documents
- •§ 3.10 Acceptance of a Published Offer of a Reward for Action or Contest Prize
- •89 Of 174 documents
- •§ 3.11 When the Words ''I Accept Your Offer'' Would Be Ineffective
- •90 Of 174 documents
- •§ 3.12 Acceptance by Forbearance From Action
- •91 Of 174 documents
- •§ 3.13 When Notice of Acceptance Is Necessary
- •92 Of 174 documents
- •§ 3.14 Notice as a Requisite of Guaranty and Letters of Credit
- •93 Of 174 documents
- •§ 3.15 Notice as a Condition Distinguished From Notice as an Acceptance
- •94 Of 174 documents
- •§ 3.16 Offer of a Promise, Requesting Non-promissory Action in Return
- •95 Of 174 documents
- •§ 3.17 Offer of an ''Act'' for a Promise
- •96 Of 174 documents
- •§ 3.18 Silence as a Mode of Acceptance
- •97 Of 174 documents
- •§ 3.19 Can Offeror Make Silence Operate as Acceptance?
- •98 Of 174 documents
- •§ 3.20 Belated or Conditional Acceptance Followed by Offeror's Silence
- •99 Of 174 documents
- •§ 3.21 Silence Plus Additional Circumstances
- •100 Of 174 documents
- •§ 3.22 Multiple Acceptances
- •101 Of 174 documents
- •§ 3.23 Alternative Modes of Acceptance
- •102 Of 174 documents
- •§ 3.24 Acceptance by Post
- •103 Of 174 documents
- •§ 3.25 Acceptance by Telephone or Other Electronic Means
- •104 Of 174 documents
- •§ 3.26 Withdrawal of a Letter of Acceptance From the Mails
- •105 Of 174 documents
- •§ 3.27 Acceptance by Telegraph-When Operative
- •106 Of 174 documents
- •§ 3.28 Acceptance Must Manifest Assent and Be Unconditional
- •107 Of 174 documents
- •§ 3.29 An Acceptance May Be Unconditional Even Though the Acceptor Makes a Conditional Promise
- •108 Of 174 documents
- •§ 3.30 Acceptance Not Conditional, Even Though Grumbling or Accompanied by a Request or by a New Offer
- •109 Of 174 documents
- •§ 3.31 Subsequent Erroneous Interpretation Does Not Make an Acceptance Conditional
- •110 Of 174 documents
- •§ 3.32 Attempts by the Offeree to Restate in the Acceptance the Terms of the Offer
- •111 Of 174 documents
- •§ 3.33 Attempts by the Offeree to State in the Acceptance the Legal Operation of the Agreement
- •112 Of 174 documents
- •§ 3.34 Mode of Acceptance Can Be Prescribed by the Offeror
- •113 Of 174 documents
- •§ 3.35 Counter-Offers and Their Effect
- •114 Of 174 documents
- •§ 3.36 Power to Accept an Offer Is Terminated by a Counter-Offer or Conditional Acceptance
- •115 Of 174 documents
- •§ 3.37 Conditional Acceptances and Counter-Offers Under the Uniform Commercial Code and the United Nations Convention
- •116 Of 174 documents
- •§ 3.38 A Counter-Offer or Rejection by One Who Has a ''Binding Option'' or an Irrevocable Offer Does Not Terminate the Power of Acceptance
- •117 Of 174 documents
- •§ 3.39 Power of Acceptance Not Terminated by a Counter-Offer if Either Offeror or Offeree So Prescribes
- •118 Of 174 documents
- •§ 3.40 Inquiries and Separate Offers Distinguished From Counter-Offers
- •119 Of 174 documents
- •§ 3.41 Effect of Rejection of an Offer
- •120 Of 174 documents
- •121 Of 174 documents
- •122 Of 174 documents
- •123 Of 174 documents
- •124 Of 174 documents
- •125 Of 174 documents
- •126 Of 174 documents
- •127 Of 174 documents
- •128 Of 174 documents
- •129 Of 174 documents
- •130 Of 174 documents
- •131 Of 174 documents
- •132 Of 174 documents
- •133 Of 174 documents
- •134 Of 174 documents
- •135 Of 174 documents
- •136 Of 174 documents
- •137 Of 174 documents
- •138 Of 174 documents
- •139 Of 174 documents
- •140 Of 174 documents
- •141 Of 174 documents
- •142 Of 174 documents
- •143 Of 174 documents
- •144 Of 174 documents
- •145 Of 174 documents
- •146 Of 174 documents
- •147 Of 174 documents
- •148 Of 174 documents
- •149 Of 174 documents
- •151 Of 174 documents
- •§ 4.2 Time of Performance Indefinite-Promises of ''Permanent'' Employment-At Will Employment
- •152 Of 174 documents
- •§ 4.3 Indefiniteness of Price or Terms of Payment-Money as a Commodity
- •153 Of 174 documents
- •§ 4.4 Agreed Methods of Determining the Price or Amount
- •154 Of 174 documents
- •§ 4.5 N1 Reasonable Price-Quasi-Contractual Remedy After Performance
- •155 Of 174 documents
- •§ 4.6 Uncertainty of Subject Matter to Be Exchanged for Price; Requirements and Output Contracts
- •156 Of 174 documents
- •§ 4.7 Effect of Subsequent Verbal Clarification or Action by the Parties
- •157 Of 174 documents
- •§ 4.8 Subsequent Action May Create a Quasi Contract
- •158 Of 174 documents
- •§ 4.9 Mistake-Difficulty and Complexity of the Subject
- •159 Of 174 documents
- •§ 4.10 Mistake as to the Words Used, or as to the Meaning Given to Words and Expressions
- •160 Of 174 documents
- •§ 4.11 Mistake in Transmission of Messages
- •161 Of 174 documents
- •§ 4.12 Objective and Subjective Theories
- •162 Of 174 documents
- •§ 4.13 Mutual Assent-''Meeting of the Minds''
- •163 Of 174 documents
- •§ 4.14 Auction Sales-Offers to Sell and to Buy
- •164 Of 174 documents
- •165 Of 174 documents
- •166 Of 174 documents
- •167 Of 174 documents
- •168 Of 174 documents
- •169 Of 174 documents
- •170 Of 174 documents
- •171 Of 174 documents
- •172 Of 174 documents
- •173 Of 174 documents
- •174 Of 174 documents
§ 1.22 The Uniform Commercial Code as a Source of Common Law
[Go To Supp]
In a dispute involving a wool-processing contract, the Third Circuit was confronted with the issue of the allocation of overhead in the calculation of damages. It found a clear answer in U.C.C. § 2-708, which, however, was not applicable to the service contract before the court. The court nevertheless applied the U.C.C. rule, explaining, ''While this contract is not controlled by the Code, the Code is persuasive here because it embodies the foremost legal thought concerning commercial transactions.''n1 Another court was faced with a dispute between a franchisee and its franchisor. The sale of goods was only a minor part of the arrangement. Under the much followed ''predominant factor'' testn2 the court would normally follow the common law in such an instance. Nonetheless, the court looked to the sales article of the U.C.C. for guidance, saying, ''we view the legislative statements of policy concerning good faith and unconscionability as fairly applicable to all aspects of the franchise agreement, not by subjecting the franchise relationship to the provisions of the sales article but rather by applying the stated principles by analogy.''n3
A contract for the provision of electrical service may or may not be for the sale of goods, but the pricing provisions of article 2 provides an appropriate gap-filler where the agreement is silent as to price.n4 Whether a company officer has signed an equipment lease in an individual capacity is a matter of commercial law of the highest importance. The legislative determination made in U.C.C. § 3-403 is an appropriate source for common law guidance.n5 Such decisions are encouraged by Official Comment 1 to U.C.C. § 1-102, which provides in part:n6
''[Courts] have recognized the policies embodied in an act as applicable in reason to subject-matter which was not expressly included in the language of the act... They have done the same where reason and policy so required, even where the subject matter has been intentionally excluded from the act in general... Nothing in this act stands in the way of continuance of such action by the courts.''
One court has said, ''Certainly the clearly emerging and recurring trend has been to synthesize commercial contract law by adopting new statutory principles from the Code into the body of the common law.''n7 Interestingly, courts have cited provisions of the U.C.C. that are essentially restatements of the common law as additional support for a common law decision; the Code provision adding extra vitality to the common law rule.n8
Because leasing involves an alternative method for marketing goods, courts have frequently looked to the U.C.C. for guidance in formulating rules of decision in equipment-leasing cases.n9 Recently, however, a new Article 2A of the Code has been approved and widely enacted. It deals directly with the leasing of goods, thus minimizing the opportunity to reason by analogy from provisions of other articles of the U.C.C. Even as to leases of goods, it was never the rule that all aspects of the transaction were to be governed by analogy from the Code.n10
Some non-U.C.C. transactions, or rather, some issues in these transactions are not properly the subject of analogical reasoning from the U.C.C. because the policies underlying the resolution of the issues are not similar. A purchaser of a truck takes it to a tire dealer for servicing. A tire is mounted, the rim explodes, injuring the employees who are servicing the truck. It is rightly held that the truck owner made no warranty to the servicing dealer or its employees.n11 The rationales for the products liability provisions of the Code, such as putting the liability on the party better able to guard against the injury, and spreading the risk of injury among the sellers and users of a given kind of product, simply have no relevance to a simple bailment. It would be otherwise, perhaps, if the bailor were the truck dealer or manufacturer. Similarly, when a University grants a degree in Chiropractic medicine it does not make the warranties of a seller of goods.n12
On the other hand, in a labor dispute relating to the payment of royalties into a labor welfare fund, the U.C.C. provisions with respect to course of dealing and course of performance are appropriately borrowed,n13 despite the generally non-commercial nature of labor contracts. Courts have held that, because insurance is not a ''good,'' a theft insurance policy contains no implied warranties under the U.C.C.n14 This, however, should be the beginning, not the end of analysis. Certainly, the Code does not apply, but there is nothing to prevent the court from extending common law warranty protection to insureds.n15 Warranty was a common law creation. The Code contains a modern statement of part of warranty law.
The sale of new housing bears many resemblances to the sale of goods, the seller usually being in many respects a merchant. Contemporary courts have thought that the old rule of caveat emptor as applied to new housing does not suit modern circumstances.n16 The warranties of the U.C.C. have provided fruitful analogies for the development of common law in this regard.n17 The U.C.C. provisions with respect to the power of an insecure party to demand assurances have appeared appropriate to land transactions.n18 However, a court has appropriately said that U.C.C. § 2-309, providing for a reasonable time for delivery, ''has little place in the field of fair housing decrees.''n19
Landlord-tenant cases also provide fertile terrain for the application of the provisions of the U.C.C. by analogy.n20 Although many of the cases involve the warranty of habitability, other issues, such as the power of an insecure party to demand assurances from the other, triggering a duty to provide them, are rationally decided with the aid of U.C.C. provisions.n21
The courts have been reluctant to apply U.C.C. concepts of warranty to construction and other service contracts.n22 However, other U.C.C. provisions have been usefully borrowed.n23 In construction cases the court may use as a serviceable guide the U.C.C. provisions requiring that a buyer must reject non-conforming goods within a reasonable time.n24 So also, the validity and effect of an express construction warranty that limits the remedy to replacement or correction of defects can be tested under criteria suggested by the U.C.C.n25Section 2-725(1), of the U.C.C. which regulates the effectiveness of a clause that shortens the statute of limitations, is a useful guide for interpreting such a clause in a fire insurance policy.n26 The good faithn27 and unconscionabilityn28 provisions are perhaps the most frequently cited sections of the Code in cases where the Code is inapplicable.
Other legislation, for example, statutes imposing sales taxes, use terminology defined by the U.C.C. It enhances certainty in the law if the U.C.C. definition is applied to such statutes where the context does not clearly require a distinct meaning.n29 Beyond definitions, the conceptual framework of the Code can gainfully be employed by analogy to aid in the construction of other statutes. For example, the Federal Water Pollution Control Act requires the ''person in charge of'' a facility to give notice to the Coast Guard of the discharge of petroleum products into navigable waters. There was a discharge from railroad tank cars that had been loaded at plaintiff's oil terminal. The tank cars were leased to the Hartwell Company and were in the custody of a railroad, but were on or near plaintiff's terminal. It was held that plaintiff's officer was the ''person in charge of'' the onshore facility from which the oil had been discharged and that the officer properly notified the Coast Guard and instituted cleanup procedures.n30 In a splendid piece of analogical reasoning, the court stated:
That [plaintiff] was not the 'owner' of the tank cars or the oil is not a reason for denying it the benefit of the reimbursement provision. To take an analogy from the law of sales, under the Uniform Commercial Code ownership or 'title' of goods does not determine who must bear the risk of loss. UCC § 2-509 attempts to 'place the loss upon the one most ... likely to take precautions against loss,' and that means in most cases the one who has possession and control of the goods... Likewise in this case it is clearly [plaintiff] which was responsible in the sense of having possession and control of the tank cars, despite Hartwell's ownership of the oil and lease of the cars. Just as possession and control would determine the responsibility for the loss of the oil, so should it determine responsibility for operation of the 'facility' involved in the spill. [Plaintiff] did not act as a mere volunteer in promptly initiating cleanup operations. It proceeded as the act envisioned.
Federal law, not the U.C.C., governs United States government contracts. Where there is no federal statute or regulation governing the issue before court, the Uniform Commercial Code is properly treated as a source of federal common law.n31
Although the Uniform Commercial Code has been directly applied by analogy, the Restatement (Second) of Contracts has absorbed many ideas that underlie the provisions of the Code.n32 Therefore, application of the Restatement (Second) will often result in the indirect application of the Uniform Commercial Code.
Article 8 of the U.C.C. governs aspects of the sale of securities. It is a barebones statute with little detail on the formation or performance of contracts. Official comment 1 to U.C.C. § 2-105 states:
''Investment securities'' are expressly excluded from the coverage of this Article. It was not intended by this exclusion, however, to prevent the application of a particular section of this Article by analogy to securities (as was done with the Original Sales Act in Agar v. Orda, 264 N.Y. 248, 190 N.E. 479 (1934)) when the reason of that section makes such application sensible and the situation involved is not covered by the Article of this Act dealing specifically with such securities (Article 8).
The courts have heeded this invitation.n33
Legal Topics:
For related research and practice materials, see the following legal topics:
Contracts LawContract InterpretationGeneral OverviewCommercial Law (UCC)Sales (Article 2)General OverviewCommercial Law (UCC)General OverviewPublic Contracts LawContract InterpretationGeneral Overview
FOOTNOTES:
(n1)Footnote 1. Vitex Mfg. Corp. v. Caribtex Corp., 377 F.2d 795, 799 (3d Cir.1967) . The same language is found in Cucchi v. Rollins Protective Services, 377 Pa.Super. 9, 546 A.2d 1131, 1141 , rev'd on other grounds, 524 Pa. 514, 574 A.2d 565 . This approach is supported by Daniel E. Murray, Under the Spreading Analogy of Article 2 of the Uniform Commercial Code, 39 Fordham L.Rev. 447 (1971); Note, Disengaging Sales Law from the Sale Construct: A Proposal to Extend the Scope of Article 2 of the UCC, 96 Harv.L.Rev. 470 (1982); Note, The Uniform Commercial Code as a Premise for Judicial Reasoning, 65 Colum.L.R. 880 (1965). A seminal precursor is E. Allan Farnsworth, Implied Warranties of Quality in Non-Sales Cases, 57 Colum.L.Rev. 653 (1957).
(n2)Footnote 2.
U.S. - Bonebrake v. Cox, 499 F.2d 951 (8th Cir.1974) .
Iowa - RMP Industries, Ltd. v. Linen Center, 386 N.W.2d 523 (Iowa App.1986) .
(n3)Footnote 3. Zapatha v. Dairy Mart, Inc., 381 Mass. 284, 408 N.E.2d 1370 (1980) . See also, Wang Laboratories, Inc. v. Docktor Pet Centers, Inc., 12 Mass.App. 213, 422 N.E.2d 805 (1981) , where U.C.C. provision as to acceptance was applied to leased computer equipment.
In cases involving both sales and services, courts usually inquire which of these elements was the ''predominant factor.''
(n4)Footnote 4. Illinois Commerce Commission v. Central Illinois Public Service Co., 25 Ill.App.3d 79, 322 N.E.2d 520 (1975) .
(n5)Footnote 5. EMX Leasing, Inc. v. Mahoney, 1988 Ohio App. LEXIS 4917 (Ohio App. 1988).
(n6)Footnote 6. See also U.C.C. § 2-313 comment 2.
(n7)Footnote 7. Matter of Borne Chemical Co., Inc., 16 B.R. 514, 521 (D.N.J.1981) . The court looked to course of dealing and course of performance in a relationship not involving the sale of goods.
(n8)Footnote 8.
U.S. - Triple-A Baseball Club Associates v. Northeastern Baseball, Inc., 832 F.2d 214 (1st Cir.1987) . The court, applying Maine law, cites out-of-state cases, this treatise, and U.C.C. § 2-716 and comment 2 thereto to establish that a baseball franchise is unique and a contract for its sale an apt subject for specific performance.
Iowa - Metropolitan Transfer Station, Inc. v. Design Structures, Inc., 328 N.W.2d 532 (Iowa App.1982) . In a construction case the court cites the U.C.C., as well as common law cases on point, to establish that interest on obligations to third parties may be awarded as consequential damages.
(n9)Footnote 9.
U.S. - Cole Energy Development Co. v. Ingersoll-Rand Co., 678 F.Supp. 208 (C.D.Ill.1988) . Under Illinois law, Article 2 remedies were applied.
Ariz. - Broadmont Corp. v. Fashion Floors, Inc., 124 Ariz. 282, 603 P.2d 553 (App.1979) . U.C.C. provision on repossession applied by analogy to leased property.
Idaho - All-States Leasing Co. v. Bass, 96 Idaho 873, 538 P.2d 1177, 91 A.L.R.3d 863 (1975) .
Kan. - Belger Cartage Service, Inc. v. Holland Constr. Co., 224 Kan. 320, 582 P.2d 1111 (1978) .
Ky. - Hertz Commercial Leasing Corp. v. Joseph, 641 S.W.2d 753 (Ky.App.1982) .
N.Y. - Industralease Automated & Scientific Equipment Corp. v. R.M.E. Enterprises, Inc., 58 A.D.2d 482, 396 N.Y.S.2d 427 (1977) . U.C.C. provisions with respect to warranties and unconscionability were applied to an equipment lease-purchase agreement.
Miss. - Capital Associates v. Sally Southland, Inc., 529 So.2d 640 (Miss.1988) . Three party lease. The ''financing lessor'' was the functional equivalent of a seller. U.C.C. warranties are relevant.
Or. - All States Leasing Co. v. Ochs, 42 Or.App. 319, 600 P.2d 899 (1979) .
Pa. - Cucchi v. Rollins Protective Services, 524 Pa. 514, 574 A.2d 565 (1990) . Warranties. The court also found persuasive the unenacted provisions of Article 2A.
(n10)Footnote 10.
Ill. -In Knox v. North American Car Corp., 80 Ill.App.3d 683, 35 Ill.Dec. 827, 399 N.E.2d 1355, 1358 (1980) , questioned in part, Whitaker v. Lian Feng Mach. Co., 156 Ill.App.3d 316, 108 Ill.Dec. 895, 509 N.E.2d 591 (1987) , the court said: ''we believe the application of selected provisions of article 2 to leases by analogy is the most well-reasoned approach. Although leases may be as prevalent as sales in the commercial world, they are a distinct type of transaction. Leases may differ significantly from sales in the area of risk of loss and the duties of maintenance and repair. A refusal to apply article 2 directly and in toto to leases avoids the situation in which language particularly applicable to sales must suffer a strained interpretation in order to cover a lease transaction.'' Having expressed this caveat, the court found a warranty of fitness by analogy to the U.C.C. See also Walter E. Heller & Co., Inc. v. Convalescent Home of the First Church of Deliverance, 49 Ill.App.3d 213, 8 Ill.Dec. 823, 365 N.E.2d 1285 (1977) ; Dillman & Associates, Inc. v. Capitol Leasing Co., 110 Ill.App.3d 335, 66 Ill.Dec. 39, 442 N.E.2d 311 (1982) .
N.Y. - Owens v. Patent Scaffolding Co., 50 A.D.2d 866, 376 N.Y.S.2d 948 (1975) . The court found no reason to apply shorter U.C.C. statute of limitations to a scaffold lease.
(n11)Footnote 11. Favors v. Firestone Tire & Rubber Co., 309 So.2d 69 (Fla.App.1975) , appeal after remand, 354 So.2d 895 .
(n12)Footnote 12. Moore v. Vanderloo, 386 N.W.2d 108 (Iowa 1986) .
(n13)Footnote 13. Galgay v. Gil-Pre Corp., 864 F.2d 1018 (3d Cir.1988) .
(n14)Footnote 14. Markline Co., Inc. v. Travelers Ins. Co., 384 Mass. 139, 424 N.E.2d 464 (1981) .
(n15)Footnote 15. See the plurality opinion in C & J Fertilizer, Inc. v. Allied Mutual Ins. Co., 227 N.W.2d 169 (Iowa 1975) .
(n16)Footnote 16. In Caceci v. Di Canio Constr. Corp., 72 N.Y.2d 52, 58, 530 N.Y.S.2d 771, 773, 526 N.E.2d 266, 268 (1988) , the court stated that ''Over 25 States now recognize some form of an implied warranty of habitability or skillful construction in connection with the sale of homes.'' The court proves the statement with citations.
(n17)Footnote 17.
Alaska - Cousineau v. Walker, 613 P.2d 608 (Alaska 1980) . The action was for rescission based on land seller's misrepresentations. Court cited U.C.C. provision on express warranty to show that caveat emptor no longer ruled.
N.H. - Lempke v. Dagenais, 130 N.H. 782, 547 A.2d 290 (1988) .
Ill. - Foxcroft Townhome Owners Ass'n v. Hoffman Rosner Corp., 105 Ill.App.3d 951, 61 Ill.Dec. 721, 435 N.E.2d 210 (1982) , judgment aff'd, 96 Ill.2d 150, 70 Ill.Dec. 251, 449 N.E.2d 125 . The court refused to apply the warranty of merchantability patterned on that of the U.C.C. to a remote purchaser.
Wyo. - Deisch v. Jay, 790 P.2d 1273 (Wyo.1990) .
A seller's express warranty, as defined by the U.C.C., was applied by analogy to the sale of a publishing company in Ainger v. Michigan General Corp., 476 F.Supp. 1209 (S.D.N.Y.1979) , aff'd, 632 F.2d 1025 (2d Cir.) .
(n18)Footnote 18. Romig v. De Vallance, 2 Haw. App. 597, 637 P.2d 1147 (1981) .
(n19)Footnote 19. Dotson v. U.S. Dept. of Housing and Urban Development, 731 F.2d 313 (6th Cir.1984) .
(n20)Footnote 20.
Mass. -In Berman & Sons, Inc. v. Jefferson, 379 Mass. 196, 396 N.E.2d 981 (1979) , a warranty of habitability case, the court discusses the cure provision (U.C.C. § 2-508) of the Code.
N.Y. - Park West Management Corp. v. Mitchell, 47 N.Y.2d 316, 418 N.Y.S.2d 310, 391 N.E.2d 1288 (1979) .
Colo. - Blackwell v. Del Bosco, 191 Colo. 344, 558 P.2d 563, 565 (1976) . In a landlord-tenant dispute, the court rejects application of out-of-state cases and the analogous warranty provisions of the U.C.C. ''[W]e believe its adoption should be preceded by the research and study of which the legislature is more competent.''
(n21)Footnote 21. Conference Center Ltd. v. TRC, 189 Conn. 212, 455 A.2d 857 (1983) .
(n22)Footnote 22. See Employers Ins. of Wausau v. Suwannee River Spa Lines, Inc., 866 F.2d 752 (5th Cir.1989) . Computer software is difficult to classify. A hybrid package of software and hardware has been treated as a good. Sierra Diesel Injection Service, Inc. v. Burroughs, 890 F.2d 108 (9th Cir.1989) ; Triangle Underwriters, Inc. v. Honeywell, Inc., 604 F.2d 737 (2d Cir.1979) , appeal after remand, 651 F.2d 132 ; but see Geotech Energy v. Gulf States Tel. & Inf. Systems, 788 S.W.2d 386 (Tex.App.-Houston [14th Dist.] 1990) . From this it has been concluded that the licensing of software can be treated as a sale of goods. Schroders, Inc. v. Hogan Systems, Inc., 137 Misc.2d 738, 522 N.Y.S.2d 404 (1987) . This is a complex area. See A.H. Boss, H.R. Weinberg & W.J. Woodward, Scope of the Uniform Commercial Code: Advances in Technology and Survey of Computer Contracting Cases, 44 Bus.Law. 1671 (1989).
(n23)Footnote 23. In Sunco Mfg. Co. v. Hargrove, 581 P.2d 925 (Okl.App.1978) , the court looked to U.C.C. § 2-206(2) as well as other authorities to determine whether a unilateral contract waiving a mechanic's lien required notification to the offeror that the offeree had performed.
(n24)Footnote 24. Arctic Contractors, Inc. v. State, 564 P.2d 30 (Alaska 1977) , appeal after remand, 573 P.2d 1385 .
(n25)Footnote 25. Magar v. Lifetime, 187 Pa.Super. 143, 144 A.2d 747 (1958) .
In B.F. Goodrich Co. v. Honeywell, Inc., 1984 Ohio App. LEXIS 12729 (Ohio App. 1984), the court looked to the U.C.C. for guidance where an exculpation clause clashed with an express warranty.
In Carter Baron Drilling v. Badger Oil Corp., 581 F.Supp. 592 (D.Colo.1984) , involving an oil drilling contract, the U.C.C. provisions on parol evidence and trade usage were discussed.
(n26)Footnote 26. Fireman's Fund Ins. Co. v. Sand Lake Lounge, Inc., 514 P.2d 223 (Alaska 1973) .
(n27)Footnote 27.
U.S. - Craft v. Economy Fire & Cas. Co., 572 F.2d 565 (7th Cir.1978) . The court found an implied duty that the insurer will handle an uninsured motorist claim promptly, fairly and in good faith.
Wash. - Badgett v. Security State Bank, 56 Wash.App. 872, 786 P.2d 302 (1990) .
(n28)Footnote 28.
Mass. - Commonwealth v. DeCotis, 366 Mass. 234, 316 N.E.2d 748 (1974) .
Mont. - Kelly v. Widner, 236 Mont. 523, 771 P.2d 142 (1989) .
N.Y. - Albert Merrill School v. Godoy, 78 Misc.2d 647, 357 N.Y.S.2d 378 (Civ.Ct.1974) .
The doctrine of unconscionability will be treated in a later volume. Until it appears, the reader is referred to John D. Calamari & Joseph M. Perillo, The Law of Contracts §§ 9-37-9-40 (3d ed. 1987).
(n29)Footnote 29. New England Yacht Sales, Inc. v. Commissioner of Revenue Services, 198 Conn. 624, 504 A.2d 506 (1986) .
In Administrator of Veterans Affairs v. Jackson, 41 Ohio App.3d 274, 535 N.E.2d 369 (1987) , a statute provided that a notice to quit real property must be ''conspicuous.'' The U.C.C. definition of the term was employed by analogy.
Decisions under the U.C.C. on the question of what is conspicuous were persuasive in a case arising under Truth-in-Lending. Andrucci v. Gimbel Bros., Inc., 365 F.Supp. 1240 (W.D.Pa.1973) , aff'd, 505 F.2d 729 (3d Cir.) .
In Logan v. Corinth-Alcorn County Joint Airport Bd., 665 F.Supp. 506 (N.D.Miss.1987) , the U.C.C. definition of ''notice'' was adopted and applied to a contract involving either real property or services.
Chapter 13 of the Bankruptcy Act uses the term ''good faith,'' but nowhere defines it. The definitional gap may be filled by using the definition of the U.C.C. In re Thacker, 6 B.R. 861 (W.D.Va.1980).
(n30)Footnote 30. Union Petroleum Corp. v. United States, 651 F.2d 734, 228 Ct.Cl. 54, 59 A.L.R.Fed. 262 (1981) . See also Aurora Firefighter's Credit Union v. Harvey, 163 Ill.App.3d 915, 114 Ill.Dec. 873, 516 N.E.2d 1028 (1987) , appeal denied, 119 Ill.2d 553, 119 Ill.Dec. 381, 522 N.E.2d 1240 , where the court used the U.C.C.'s definition of accommodation party as an aid to interpreting ''primary obligor'' in the Federal Truth-in-Lending Act.
(n31)Footnote 31. United States v. Conrad Pub. Co., 589 F.2d 949 (8th Cir.1978) (foreclosure sale of collateral). See United States v. Wegematic Corp., 360 F.2d 674 (2d Cir.1966) where the court states:
''We find persuasive the defendant's suggestion of looking to the Uniform Commercial Code as a source for the 'federal' law of sales. The Code has been adopted by Congress for the District of Columbia, 77 Stat. 630 (1963), has been enacted in over forty states, and is thus well on its way to becoming a truly national law of commerce, which, as Judge L. Hand said of the Negotiable Instruments Law, is 'more complete and more certain, than any other which can conceivably be drawn from those sources of ''general law'' to which we were accustomed to resort in the days of Swift v. Tyson.' ... When the states have gone so far in achieving the desirable goal of a uniform law governing commercial transactions, it would be a distinct disservice to insist on a different one for the segment of commerce, important but still small in relation to the total, consisting of transactions with the United States.''
Accord, United States v. Humboldt Fir, 426 F.Supp. 292 (N.D.Cal.1977) , aff'd mem., 625 F.2d 330 (9th Cir.) . Yet, where the U.C.C. rule imposed liability on the United States greater than existed under federal common law, the federal court applied the common law, ostensibly to further federal interests. This approach, equating federal interests with federal non-liability, is regrettably imperious. United States v. Bank of America Nat'l Trust & Sav. Ass'n, 288 F.Supp. 343 (N.D.Cal.1968) , aff'd, 438 F.2d 1213 (9th Cir.) .
(n32)Footnote 32. See § 1.21 above.
(n33)Footnote 33.
U.S. -In UMIC Government Securities, Inc. v. Pioneer Mortgage Co., 707 F.2d 251 (6th Cir.1983) , the court applied Article 2 rules on repudiation. In Gruen Industries, Inc. v. Biller, 608 F.2d 274 (7th Cir.1979) , U.C.C. § 2-204 on formation of contracts was cited. In Kroeze v. Chloride Group Ltd., 572 F.2d 1099 (5th Cir.1978) , § 2-206 guided the decision concerning a tender offer.
Conn. - Burns v. Gould, 172 Conn. 210, 374 A.2d 193 (1977) . The court looks to definition of ''sale'' in U.C.C. § 2-106 to determine whether there was a sale of securities. It reaches a conclusion contrary to the Pennsylvania case cited below.
Me. - Zamore v. Whitten, 395 A.2d 435, 4 A.L.R.4th 899 (Me.1978) . The issue was the formation of a contract for the sale of stock.
N.Y. - Matter of McManus, 83 A.D.2d 553, 440 N.Y.S.2d 954 (1981) , aff'd, 55 N.Y.2d 855, 447 N.Y.S.2d 708, 432 N.E.2d 601 . The court looked to U.C.C. § 2-207 for guidance as to contract formation.
Pa. - Baldassarre v. Singer, 444 Pa. 100, 282 A.2d 262 (1971) .