Question

3. The UCC governs sales contracts, or contracts for the sale of goods. How does the UCC define a sale? Describe what goods are, who is a merchant, and how these fall into the context of a legal sale of product.

Answer 1

The UCC and its recommendations usually refer to all contracts relating to the selling of products. Under the UCC, "goods" are identified as "all items (including specially produced goods) that are mobile at the time of identification with the sales contract." Typically, UCC parties can "contract out." When parties agree to terms other than those set out in the UCC, then those terms will be controlled. There are also several situations where the concept of "goods" can be "grey" or vague. For example, it can happen in a construction contract that part of the job involves depositing rocks on a parcel of land.

Article 2 of the UCC allows for the selling of products. "Items" means all products, including specially made items which are observable and mobile at the time of the selling contract recognition. This includes unborn animals, growing crops, and other known real-life-associated issues. A present contract to sell "initial" goods (those that are not already current and identified) is called a sales contract, not a sales contract. Article 2 does not refer to the transfer of property arising from gifts, property protection interests, leases or bailments, because these are not sales.

In the case of merchants only, Article 2 provides for an exception to the provisions of the Law of Fraud which is called the "exception of the merchant" (mentioned above). If one merchant gives another merchant a written notice of an oral agreement within a reasonable period and the other merchant fails to object within 10 days, then the oral agreement is enforceable. The UCC defines "merchant" as a person who, by his profession, deals with goods of this kind or otherwise, sees himself as having knowledge or skills peculiar to the transaction's practices or goods. Under the UCC a farmer is considered a "merchant" in North Carolina. Generally, one is a “merchant” only for the purposes of the business in which he is regularly engaged.