Question

In: Economics

Are these relationships under article 2 of the UCC? Why? Ben owns fifty acres of timberland....

Are these relationships under article 2 of the UCC? Why? Ben owns fifty acres of timberland. He enters into a contract with Bunyan under which Bunyan is to cut and remove the timber from Ben’s land. Bunyan enters into a contract to sell the logs to Log Cabin, Inc., a homebuilder.

Solutions

Expert Solution

UCC - Uniform Commercial Code (UCC) is a set of legally binding business laws and contracts. There are 9 articles under the UCC.

Article 2 of UCC states that " out of the two parties between whom the commercial sales of goods are taking place, both need not be merchant parties, however, one party has to be a merchant." Also under Article 2, "things except for money which is identified as moveable in nature during the creation of the sale contract is called 'goods'."

In the given case,

a) The contract between Ben and Bunyan does not come under Article 2 of UCC because-

  • Contracts involving land or real state is not included under this.
  • Neither Ben nor Bunyan is a merchant.

b) The contract between Bunyan and Log Cabin Inc. comes under Article 2 of UCC because-

  • This contract involves the selling of moveable goods i.e. timber.
  • One of the parties involved is a merchant, which is, Log Cabin Inc.

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