The recent sequence of Blogs began with one of the most fundamental, pervasive and important cornerstones of the Uniform Commercial Code: What is the contract between the parties? Our analysis began with section 1-201(b)(12) which states the basic definition of a “contract” under the Uniform Commercial Code:
“Contract”…means the total legal obligation that results from the parties agreement as determined by [the Uniform Commercial Code] as supplemented by any other applicable rules of law. Section 1-201(b)(12)
The past three Blogs have focused on the first element: the parties agreement: defined as:
…[T]he bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1-303.
The importance and potential impact ‘of language, course of performance, and usage of trade’ have been demonstrated. Reported cases overwhelmingly support the importance of these concepts. It must be remembered however, that these are listed as examples of ‘inferences from other circumstances’ are thus illustrative, not exclusive. To the extent a favorable ‘inference’ can be made from ‘other circumstances’, the advocate has a vehicle to introduce evidence which can establish that result.
The basics of ‘agreement’ are now in place. However, it is clear from a reading of Section 1-201(b)(12), that this is only one of three elements which must be looked at in determining what the ‘contract’ is:
The other two involve:
- The application of the laws of the Uniform Commercial Code to the ‘agreement’;
- Supplemental rules of law which may be applicable.
As will be seen in subsequent entries, both of the foregoing can have extraordinary and far reaching impact on what the end result of the ‘agreement’ is in reality. The potential for favorable drafting of contracts, timely intermediate actions, and creative strategies for litigation will be interwoven into these discussions.
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