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

An Overview of Proposed UCITA, 38 Duq. L. Rev. 319 (2000); Henry Deeb Gabriel, The
2003 Amendments of Article Two of the Uniform Commercial Code: Eight Years or a
Lifetime After Completion, 52 S. Tex. L. Rev. 487 (2011).
6. In May 2009, the American Law Institute approved its Principles on the Law of the
Law of Software Contracts. This publication contains valuable notes that summarize the
case law applying UCC provisions to software. For a discussion of the Principles, see
Maureen A. O'Rourke, An Essay on the Challenges of Drafting a Uniform Law of
Software Contracting, 10 Lewis & Clark L. Rev. 925 (2006); Juliet M. Moringiello,
What's Software Got To Do with It? The ALI Principles of the Law of Software
Contracts, 84 Tul. L. Rev. 1541 (2010).
7. We will later compare the terms, especially the warranty terms, of a contract for the
sale or licensing of software and a contract for the sale of goods. Based on your personal
experience, how different is a warranty on a good that you have recently purchased
compared to warranty terms contained in a licensing agreement for software that you have
recently downloaded? What do these differences tell us about the expectations of the
software companies?
2.4. The Article 2 “Merchant” Rules. As we have seen, Article 2 applies to transactions in
goods. If a sale of goods is within Article 2, in general it doesn’t matter whether the transaction is
between sophisticated or unsophisticated parties. Article 2 covers Bic’s sale of 2 million pens to
Wal-Mart, Wal-Mart’s sale of a package of six Bic pens to me, and my sale of one pen to you.
See Scott J. Burnham, Why Do Law Students Insist that Article 2 Applies Only to Merchants and
What Can We Do About It?, 63 Brook. L. Rev. 1271 (1997).
However, there are a few occasions (thirteen to be exact), where Article 2 contains a rule that
applies only to merchants or only “between merchants.” If the rule applies to a merchant, then
only that party has to be a merchant, but if the rule applies “between merchants,” then both
parties have to be merchants for the rule to kick in. See § 2-104(3).
2.4.1. What does it mean to be a merchant? As you can imagine, when a rule applies to a
merchant, it is generally because the merchant is more sophisticated in business matters
and may be held to a higher standard of diligence. How does the merchant obtain that
sophistication? Let’s turn to the definition of merchant at § 2-104(1). The UCC
distinguishes between merchants as to goods and merchants as to practices.
2.4.2. Under § 2-104(1), a merchant falls into the class of a merchant as to goods in one
of three ways:
A person who deals in goods of the kind;
A person who, by his occupation (and not by hobby) holds himself out as
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