Grocery, Inc. Grocery, Inc. is a retail grocery store chain based in Any State; U.S.A. Grocery has stores throughout the United States. Grocery has written contracts with many different vendors to purchase the products they sell in their stores. Vendors range from individuals to international corporations. Tom works as the produce manager for the store in My Town, U.S.A. Jeff, 17 years old, is spending his summer vacation working for Tom in the produce department.
A.) Does Article 2 of the Uniform Commercial Code (UCC) apply to the contracts between Grocery and its vendors? Do common law contracts apply? Explain, in detail, why or why not. Your answer should compare and contrast common law contracts and UCC Article 2 contracts.
Yes Article 2 of the UCC does apply to the contracts between Grocery and their vendors. Article 2 applies to all contracts for the sale of goods (2-102). The code contains a somewhat complicated definition of goods (2-105); the most important thing to understand is that the term goods means tangible personal property.
Article 2 does not apply to contracts for the sale of real estate or stocks and bonds and other intangibles. The drafters of the code also tried to promote fair dealing and higher standards of behavior in the marketplace. They attempted to do this in several ways in Article 2. The Code imposes a duty on everyone making agreements under the Code to act in good faith (1-203). The Code also imposes certain standards of quality on sellers of goods as a matter of law.
Common law contracts would also apply to the Grocery and their vendors, due to the mixture of goods and services. Common law would apply to the service element that is predominant in the contract with regards to the delivery of the goods.