Merchant Issues Related to UCC

Jun 15

The last lecture in my Management Law course was lively and interesting. It centered on the UCC and gave particular emphasis on the merchant to merchant dealings. There was particular emphasis on Sale and Lease sections and some discussion around the original vs. the revised, which addresses contemporary issues related to e-commerce and electronic communication.

What was interesting is that the formality and rigidity which is characteristic of law in so many other contexts cedes to predictability and flexibility. In other words, the UCC wants to make business easy and remove as many inhibitors.

As a result, many of the questions that arise in merchant to merchant cases center around past dealings and industry averages. This may result in cases where there was no contract, but there can still be a definitive ruling.

Another aspect of the UCC for merchants is that it favors resolution outside of court. With the less rigid structure of the guidelines governing merchants, it’s not as easy to clearly identify breach. If breach isn’t absolutely clear, the cost of litigation is a risky bet.

So it seems there is opportunity for broad interpretation of the UCC when it comes to merchants. Bottom line? Take the time to choose vendors, suppliers, contractors and other partners that you trust and establish a good track record. If you keep the lines of communication open and have well established policies, you may not even need to review the UCC.


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