Sales and Leases - A Problem-based Approach, 2016a

asserted in the Code itself (see [§ 1-103(a)(3)]) – argues for nudging majority views, even
if imperfect (but not downright bad), toward unanimity, we start with a presumption that
Illinois, whose position we are trying to predict, would adopt the majority view.…
Problem 1-1. You are litigating a case in the state of Washington involving a particular section
of UCC Article 2 which has not been addressed by the Washington Supreme Court, but has been
addressed by courts in other jurisdictions. What weight should the Washington Supreme Court
give to the decisions of other jurisdictions? Mandatory, persuasive, or something in-between?
1.3. Variation of UCC Provisions by Agreement. Although some provisions of the UCC are
mandatory and cannot be varied (discussed below), most provisions are intended to be “default”
provisions that govern in the absence of a differing agreement by the parties. See Scott J.
Burnham, Is UCC Article 2 Facilitatory or Regulatory? 68 Ohio St. L. J. 57 (2007).
1.3.1. The principle of freedom of contract (which you should always be prepared to
argue to a court) is alive and well under the UCC. Section 1-302(a) provides:
Except as otherwise provided in subsection (b) or elsewhere in the UCC, the
effect of provisions of the UCC may be varied by agreement. (emphasis added)
After they finished, the Code drafters realized that sometimes they stated that a provision
governed “unless otherwise agreed” and sometimes they didn’t. They then included § 1-
302(c) to make clear that when they failed to say it, they did not mean that the parties
cannot otherwise agree.
Query: Do parties have the freedom of contract to opt out of the UCC when it would
otherwise apply? To opt into the UCC when it would not otherwise apply? See § 1-302,
Official Comment 2.
Problem 1-2. Although the UCC allows a buyer to recover reasonably foreseeable consequential
damages arising from a breach, the UCC does not provide for a seller to recover consequential
damages. See §§ 2-708, 2-713. In a transaction involving goods, the parties agree to the
following provision: “In the event of a breach, both Seller and Buyer may recover from the
breaching party all damages arising from the breach, including reasonably foreseeable
consequential damages.” If all the elements of are established, will the seller be entitled to
recover consequential damages? See also § 1-305.
What difference does it make that Amended Article 2 provides in § 2-708 that “the measure of
[seller’s] damages for nonacceptance by the buyer is the difference between the contract price
and the market price at the time and place for tender together with any incidental or
consequential damages provided in Section 2-710”?
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