1.1 Laws & Regulations - Commercial

Question 1

Commercial Contract Law

Uniform Commercial Code (UCC)

Answer 1

• primary source of commercial contract law; to provide a framework for commercial firms to conduct business across state or other jurisdictional boundaries with reasonable assurance that the same or similar rules apply.
• must be adopted as law by each state separately.
• differences in UCC from state to state; been enacted in 49 of 50 states.
• Louisiana enacted most of UCC, but Louisiana civil law & Napoleonic Code, making complete adoption difficult.

Question 2

Commercial Contract Law

Article 2 of Uniform Commercial Code

Answer 2

-current law governing contracts for the sale of any kind of “goods” between two U.S. corporations.

Covers: contract formation, contractual obligations of the seller and the buyer, rules for performance on a contract, and remedies for breach of contract.

-states a contract for the sale of goods with a price of $500 or more must be in writing to be enforceable.

Question 3

Commercial Contract Law

3 Requirements of Article 2 of UCC

Answer 3

1. It must provide evidence that there was a contract for the sale of goods,
2. It must be signed by the party to be charged, and
3. It must specify a quantity.

Question 4

Commercial Contract Law

Answer 4

• US states (not federal) are the primary source of law on commercial transactions.
• includes US state statutory and common (judge-made) law and private law.

Statutory Law: may require some contracts to be put in writing and executed using specific procedures.

Private Law: principally includes the terms of the agreement between the parties who have exchanged promises for consideration.

The primary source of commercial contract laws is the Uniform Commercial Code (UCC).

Question 5

Commercial Contract Law

Sarbanes-Oxley Act (SOX) - (Public Law 107-204)

Answer 5

• signed in law on July 30, 2002
• creates requirements to prevent companies from accounting for profits not realized in an effort to portray value where none exists.
• had significant impact on accounting practices in U.S.
• impacts both commercial and government contractors; reducing firms laissez faire attitude in how they created, recorded, and managed contracts.

Question 6

Commercial Contract Law

Factors of a Contract

Answer 6

-Express Terms of the contract.

Course of Performance: any acts in performance of the contract by either party that are not objected to; these acts can be interpreted as consistent with the express terms.

Course of Dealing: a series of previous conduct between the parties to a particular transaction that can be regarded as establishing a common basis of understanding for terminology and conduct.

Usage of Trade: practices or methods of dealing that are regularly observed and justify an expectation that they will apply to the transaction in question.