Running head: UNIVERSAL COMMERCIAL CODE ARTICLE 2 2

Universal Commercial Code Article 2

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UNIVERSAL COMMERCIAL CODE ARTICLE 2
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Universal Commercial Code Article 2

Introduction

The UCC is a universal code that covers all sales as well as commercial transactions, and
it is meant to create uniformity and ensure that there is consistency between state laws. The UCC
was designed to harmonize regulations of transactions and other profitable contacts within the
USA.Article 2 of the UCC was the most significant, and this occurred in the year 2003.It is the
most applicable contract for buying and selling goods in the USA, and it underwent a decade-
long process of revision. One major implementation that occurred in the updating of Article 2
was the inclusion of electronic commerce processes (Edwards, 2004).Another change that
happened was the application of Information Technology rules to the entire process. The article
ensures effective control of every phase of the contract in the sales of properties and services. It
also offers therapies for difficulties that may transpire through any transactions. There has
however been much controversy concerning the Code and especially the fact that it was
insensitive to the economic hardships suffered by consumers. In the 1970s, the Congress was
able to enact reforms in the Code to ensure that transactions would fall in the scope of the code
(Edwards, 2004).At one point the Code was in hazard of suitable out-of-date, and this called for
the establishment of more principles that would govern the scope of the code.

Creation of Article 2
The provisions of the Code have enabled skilled and powerful sellers ton prey on
unsuspecting customers who are burdened with goods that did not meet reasonable expectations.
It became necessary for drafting committees to amend Article 2.The article 2 of UCC is one of
the most important laws that preserve the freedom of contract. Though Article 2 recognizes
requirement for confines of free interactions in business between does this with limited
expectations. The vision of Article 2 was to ensure proper business practices and dealings in
transactions that where fair and balanced and that legislatures would choose to experiment with
response to customer complaints concerning fraud and this affected how operations in business
were carried out. In 1968, the Congress made a corresponding Act to deal with this, which
promulgated the UCC code. In the aftermath of this, the Article received much criticism and
consumers complained that warranty descriptions deceived and confused them. In the wake of
this, the senate created another Act corresponding to the situation, which replied to disclosures to
remedy the grievances of consumers.

Resistance to Article 2 in the Early Years

In the wake of this, many state legislation established laws to respond to the complaints
that arose. By 1970, a majority of sellers began to rely on the use of contracts and this ensures
practices of business continue and using this the customers were able to able to have safety in
transactions, and this brought much uncertainty as well as confusion. At this point, legislative
measures were adopted to ensure safety of practices that are within transactional boundaries. It
led to the call for more efforts that would ensure the effective establishment of affordable as well
as efficient procedural mechanisms for the enforcement of existing rights. There were fears that
consumers would be forced to pay exorbitant prices or be forced to do without these products.
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The drafting of Article 2 effectively began in 1992, and there were predictions that complete
revisions would be through by 1996.A committee was set up to examine all the occurred and
furthermore ensure proper management of the article reviewing process during this period,
however disagreements occurred and this led to the abandonment of efforts to broaden the scope
of the Article (Edwards,2004).It led to the massive delaying of the formation of the article.
.In the wake of this, a separate committee was formed, and it was responsible for drafting
article 2b.However, later on, the drafting committee turned its attention to the question of
whether additional consumer protections would be included in Article 2.However,this led to
disagreements and all efforts were met with protest (Edwards, 2004). One major issue that came
into the spotlight was the doctrine of freedom in Article 2 and there were arguments that this
would lead to varied opinions concerning how to fill holes using existing legislation. It was,
therefore, necessary to ensure the uniform treatment of consumer issues in every state. Other
committee members who were responsible for reviewing the draft argued the fact that protection
laws would ensure the safety of transactions and any trade practices therefore ensuring
legitimacy in all dealing between buyer and seller. However, there were reservations concerning
making any improvements and this would trigger debates between consumers and commercial
interests.

Amendment Formation Process

The board decided to discuss important factors concerning the bill and it met to make
amendments. In July 1999, the draft was finally approved a month later it was removed from the
agenda of the committee meeting (Edwards, 2004).The main issue to be dealt with was the fact
that there was resistance to change implementation. Proposed sections of the draft recognized
obligations from sellers to remote purchasers and acknowledged the fact that this would benefit
customers (Stone, 1975).However, these proposed amendments did not address standard form
contracts or attorney fees as well as consumer costs. A major decision was made to incorporate a
provision that any digital transactions were not permissible in the past, but the new revision
looked to make digital transactions to be part of the Act. It also deals specifically with ensuring
that it was important to ensure legitimacy in all trade dealings and fairness therefore ensuring
deals were done in a legal way.
Furthermore, article 2 also insisted that bargains were to be carried out transparently by
ensuring a fair agreement had been reached between buyer and seller before any transaction was
carried out. One concern was the fact that both groups had threatened to impede the progress of
the committee (Edwards, 2004).The second concern was the fact that there were questions as to
whether consumer measures would be necessary to protect interests of the consumer class. There
was a belief that consumer concerns would need better documentation to establish the central
issues of matter as well as a way forward. There was evidently a significant challenge facing
consumers, and this included a demand for documentation to be supplied. In the light of all this,
there is growing uncertainty as to whether consumers will manage to support form the congress
thus ensuring equity in sales practices and proper management of trade transactions.

Important Issues Considered in Amendment

It is therefore crucial for states to implement a revision process that will prevent unfair
domination by dominant sellers. It is also essential for states to recognize the contractual
protections that consumers deserve and use these to enhance autonomy. State and federal
consumer protection laws are expected to provide useful remedies for unfair trade practices. The
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substantive legislation is expected to incorporate principles that will ensure independence as well
as leverage of bargaining processes in transactions. Article 2 has failed to meet these
expectations, and there are doubts as to whether it will. The 1999 draft of the revised article w
reorganized the provisions that had been placed and streamlined these regulations in a way that
could be better understood. The 1999 draft, however, retained the rule that the contract was to be
formed for a definite as well as acceptable purpose. With the failed attempts toensure equity in
trade practices there have been calls to improve the overall outcomes related to how these
transactions are carried out properly.The Article 2 clearly needs changes, but these changes
would have to focus more on issues related t electronic commerce.
The subsequent revision created lack of understanding between board members and there
are issues linked with the realization of this contract. General formation provisions were
retained, and these addressed unique problems that are associated with electronic contracting.
The revision was able to stress the point that contract information would only occur if a person
took actions and a statement was made that caused the completion of the transaction or indicated
that a deal had been reached (White,1977).There are ongoing discussions as to whether article2
has an appropriate place within the legal universe. Another major issue of concern is the legal
quality of the article. The Code was not enacted merely to change the law and providing lawyers
and legislators with more work. One major issue is concerned that the code has barely made
improvements to the Sales Act and there are feelings that it will not have very favorable
outcomes. There are concerns over the significance of article 2 especially within the constraints
of the transactional law. Article 2 has mentioned procedures to resolve issues related to delivery
and tender problems, and this has ensured active transactions.
One major issue that comes into consideration concerns the necessary remedy provisions
from the buyer as well as the seller that are offered by article 2.There are parallels between
policy and procedure, which are noticeable. The article manages to provide a unified approach to
the remedies of the buyer as well as the seller. It contains significant index sections that reveal
solutions to various organizational problems and transactional misunderstandings. It is essential
to understand that all the remedies that have been offered are cumulative and have specific,
peculiar facts. The primary object of the solution should be to produce the equivalent of the
contract sale in money. The objective of the buyers remedy is to ensure proper acquisition of
conforming goods (Hillebrand, 1997). Then important requirements that are stated in the code
are those that have an essential role to play in business relationships. Failure of the seller to
conform to provisions as shown in the article will result in the diminution of eventual recovery
(Small, 1968).Failure of the buyer to comply will eliminate remedies that are available. If the
expected returns from the transaction are to be achieved, then the seller should immediately seek
expectancy in action for the price. These particular sections are consistent with the prior law, but
they are still subject to improvement. The article also manages to disclose the fact that there are
individual bases upon which the seller may be excused from performance (Bailey, 2003).It is
essential to establish a working relationship that will ensure the establishment of the provisions
that have been mentioned in article 2.
The Legal Process and Constraints Encountered
The courts have sought to preserve commercial expectations in the formulation as well as
remedial aspects of the article. The application of Article 2 from the UCC can help minimize
transactional costs and at the same time ensure proper allocation of risks between different
parties. There are questions as to whether concepts from Article 2 can be applied in other areas
other than in the sale of goods. The UCC feels that there is a need to ensure that the law deals
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efficiently with issues that are related to sales of good contact. Professional and academic expect
have criticized the code and those who have engaged in drafting and shaping the article continue
to criticize its lack of progress (Murray,1971).The issues within article 2 as well as the
integration of this evidence with contract rules is a major issue discussed. Another major
problem is the acceptance of the code concerning usage in trade. The use of particular sections in
the code has led to an aura of authority, and this has justified the opinions gathered in many legal
aspects. Ever since the decision was made to modernize article 2 drafting committees have
embarked on the process of revising the entire project. Initial drafts have sought to update almost
every aspect of Article 2.Preoposed revisions have targeted the facilitation of electronic
commercial transactions and have made minor corrections and adjustments, but the changes have
been substantive. However, various hurdles hindered these amendments from becoming law.,
The NCCUSL is expected to review and approve of these changes. The approval is
highly likely but it is not precisely sure. Another important consideration is the fact that the
decision not to revise Article 2 holistically raises questions concerning whether various targets
have been accomplished (Maggs, 2002).Events from recent years have made changes in lawless
important. There are questions concerning the need for urgency in revising these laws. One
important factor to consider is that there have been significant developments since 1990 that will
have to be found. One of these is the fact that there has been an emergence of electronic
commerce and this bears much weight on the development of Article 1.There has been a
widespread introduction of new ways in creating contracts in the sale of goods, and this will lead
to the increased calls for the revision of the article. The appearance of electronic commerce in
recent years has raised legal issues as states, and federal governments continue to enact new
legislation to deal with these occurrences. Another critical development relates to the decision as
to whether the revision process will make article 2 to govern all aspects of contracts for the sale
of computer software.
The Uniform Computer Information Transaction Act has obtained minimum legislative
approval and is still controversial (Speidel, 2000).Therefore, the decision to treat the subject of
computer sales outside article 2 will lessen the importance of revising article 2.Another major
issue is the fact is that there have been many new cases that are significant since it has become
essential to amend article 2 in large parts. Article 2 is one, which takes a significant scope, and it
is important to recognize its significance in this aspect. The article governs transactions
concerning goods, and this includes all things that are considered movable as well as other
categories of things as well. Each year, Article 2 oversees many sales and these ranges from
small transactions to significant transactions. Various scholars continue to highlight the fact that
Article 2 requires significant changes. Drafters have proposed that Article 2 should be turned
into a global hub that will contain provisions that are relevant to the sale of goods as well as the
licensing of software. In 19996, the committee produced a revised draft, which abandoned that
particular approach. In 1999, ALI also approved a proposed final draft, and the proposal was
supported by the entire board.NCCUSL did not vote on this particular draft because it feared that
this draft would not win the support of all state legislatures (Maggs,2002).A new drafting
committee was then appointed, and this board worked on the project with diligence.

Revision of Article 2 and Issues of Concern

However, insisted on completely revising Article 2, the committee sought only to amend
a few positions. It also decided to add various provisions on electronic commerce as well as
rewriting a few regulations that had caused controversy. Most of the article was however kept
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intact due to the relevance of the draft and the widespread acceptance by a majority of
individuals. It is, however, important to acknowledge the difficulties in revision as well as how
these affected procedures (Maggs.2002).One major issue is the fact that no significant group of
commercial buyers or sellers demanded a revision of article 2.Most businesses, in fact, did not
want the status quo and believed that a review was not necessary. The drafters, therefore,
realized that they faced an uphill battle from the beginning. Another significant occurrence is the
fact that when the drafters attempted to turn Article 2 into the hub many of its provisions were
rewritten. Another major issue is the fact that the 1999 draft continued to reflect many of these
changes and this gave Article 2 a different aura and troubled those that opposed the revision of
the article.
Another major issue to consider is the fact that the drafting process faced difficulty due to
the matters related to consumer protection. It was felt that the committee would never provide
sufficient measures that would satisfy the desires of consumer groups (Maggs, 2002).At the same
time, commercial interests found it strange that even limited consumer protection provisions
were placed under consideration. Another major issue that affected the process is the fact that the
entire process took an entirely political twist and this affected outcomes. The commercial
interests at this time persuaded NCCUSL that adopting these revisions would be a big mistake
(Benfield & Alces, 1994). These warnings were taken seriously and were not adopted. The main
fear was that of proposing legislation would go against the common interest. The revision
process was compared to recent drafting efforts, which in fact produced different outcomes on
other articles. The major issue of concern was about the consequences that would be associated
with passing these revision and how it would impact consequences of the draft.

Conclusion
One primary consideration was the fact that the effort to revise article 2 had failed to
achieve success. The final draft that was approved in August 2012 did not include any significant
changes. The central question was whether there was a need to revise article 2.Another major
issue that came to question was whether the revision would achieve any significant goals
(Gordon, 1968).Many individuals are constantly using various methods to transact, and
electronic commerce is a significant occurrence. It is essential to understand the reality that the
provisions in the article that are concerned with the formation of contracts have little to do with
electronic commerce. One primary question that has emerged is if various parts of article 2 are
necessary. One major issue is the question as to whether parties are bound to terms that they do
not present. Individuals will, therefore, have to pay careful attention to all issues mentioned and
it is essential to ensure that all parties can back out of the transaction without liability of breach
despite any potential harm to the other side. The drafters of this article have addressed this
problem by forming the mirror image rule.
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