When does the Uniform Commercial Code Governs Your Contract

When Does the Uniform Commercial Code Apply to a Contract?

If you conduct business in Wisconsin, you know a thing or two about contracts. Depending on what your contract is for can determine what law is applicable. This is important for your business as there are different rules that apply to traditional common-law contracts and contracts where the Uniform Commercial Code (UCC) applies. But how do you determine which body of law governs your agreement?

Understanding whether the UCC applies to your contract is significant because it contains many specific provisions and requirements, particularly when the Seller falls under the UCC’s definition of Merchant. If you are in the business of buying or selling goods, knowing these provisions and how they work is crucial for understanding your rights and obligations under Wisconsin commercial contract law.

A law firm experienced with business litigation and the UCC can help you interpret those considerations if a problem arises with the performance of the Contract. The UCC will not apply to your contract unless the agreement meets one of the following criteria:

• Goods: Article 2 of the UCC, which governs contracts, limits its application to contracts involving the sale and purchase of goods valued at $500 or more. Wis. Stat. 402.201(1). A good is defined as means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities, things in action, the unborn young of animals and growing crops and other identified things attached to realty as described in s. Wis. Stat. 402.107 on goods to be severed from realty. Wis. Stat. 402.105(1).
• Merchants: Generally, the UCC applies to agreements where at least one of the parties is a “merchant.” The term Merchant is defined as individuals who, as part of their occupation, deal with goods of the kind covered by the agreement and possess knowledge or skill specific to the goods or practices. Wis. Stat. 402.104(3). For example, a sale of a used car between two individuals, even if the car is valued at more than $500, likely does not invoke UCC application because neither party is a merchant. However, the same car purchased from an automobile dealership would involve a merchant, and the UCC would apply.

If you are having an issue with a party not living up to their end of a bargain, speaking with an attorney that understands the UCC is vital to the likelihood that you will be successful in enforcing the Agreement. The lawyers at Halling & Cayo, S.C. have decades of experience helping people just like you. Call or email us today for a free consultation.