Question

You open up a business called Sweet Success, selling home baked cookies and bars. Your main supplier is Whole Grains, a company that supplies you with flour and sugar for your products. Your contract with Whole Grains is a standard purchase contract, and basically says Whole Grains will deliver 500 pounds of flour and 800 pounds of sugar every Monday to your commercial kitchen.

Is your contract subject to the UCC?

Why or why not?

Your contract includes an obligation of Whole Grains to deliver flour and sugar to your kitchen, but you learned in BusLaw that a delivery isn't the sale of good under the UCC. Does this mean that your contract is NOT subject to the UCC? Explain

One Monday, you decide you need an extra 200 pounds of flour. You call and order it, but you don't modify your written contract with Whole Grains. Will Whole Grains be in default if it fails to deliver the extra flour? Why or why not?

Answer 1

Yes, the contract is subject to the UCC because the UCC applicable to one of the triggers such are:

1. Goods: According to the Article of the UCC, there is the limit of purchase or sale of goods in amount $500 or more.
2. Merchants: If one of the party is merchant that means those who as part of their occupation deal with goods of the kind covered by the agreement and they have the knowledge of the product. They have specific skills about the goods they sold or purchase.

Hence in this case both the triggers are satisfied so the contract is subjected to UCC.

My contract includes an obligation of Whole Grains to deliver flour and sugar to your kitchen, but I have learned in Bus Law that a delivery isn't the sale of good under the UCC. No, it does not mean that the contract is NOT subjected to UCC because although the company who delivers the product does not having the knowledge of the product but the contract specified that the Goods Amount limit which has been sold or purchased by the company is more than the limit.

One Monday, I decided that I need an extra 200 pounds of flour. I call and order it, but i don't modify written contract with Whole Grains. Yes, they will be I default if it fails to deliver the extra flour this is because the limit of eh good is less than $ 200. This is the oral contract as the amount is less it is also considered. It is the liability of the company to supply the goods as the oral contract is made.