Question

5) What are UCC gap-filling provisions? Give examples and explain how and why they are applied?

Answer 1

The uniform commercial code (UCC) is a set of laws governing sales and commercial transactions. The purpose of any uniform code is to create a standard body of law across multiple jurisdictions. The provisions of the UCC or any uniform code are not binding on a jurisdiction unless they have been adopted by that jurisdiction. The UCC contains multiple articles dealing with various components of commerce. The focus here will be on Article 2 of the UCC, which regulates contracts for the sale of goods.

The Uniform Commercial Code Article 2 of the UCC which applies to contracts for the sale of goods has led the way for gap filling. Section 2-204 sets the stage by dispensing the rigid rules of offer and acceptance contained in the first Restatement. It provides Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. Under this provision, the court is authorized to fill a number of gaps if the parties have left them open in their sales contract. The underlying policy is that an agreement for the sale of goods ought to be binding when the commercial parties regard it to be binding and that in practice both parties frequently believe that they are bound even though some terms have been left open. Gap-filling provisions are based on the assumption that these are the terms that most parties would have agreed to if they had focused on the issues in advance. In particular, the UCC provides instructions for filling gaps in price, place for delivery, time for shipment or delivery, time for payment.