Contract law has its roots in two sources. One is statutory law, and the second one is common law. Statutory law would normally include the Federal and State made rules and regulations. On the other hand, common law has evolved from the rulings of the Court of Law. The UCC was established to govern the law in respect of transactions of goods. The code established in the year 1952 came to be adopted by all the states except for Louisiana. The reason for establishing the code was to make the law more comprehensible for business transactions and create a set of uniform laws across the state so that there is consistency among the laws. The UCC encompasses various principles of common law; however, it also frames various laws in relevance to the current contracting standards between businesses and individuals. UCC covers transactions related to goods both movable and tangible in nature, financial transactions, leases, and license agreements for properties.
Common Law and Uniform Commercial Code Contracts
Common law contracts mandate strict compliance to all the terms of contract laws. The rule of mirror image has to be applied in such a common law contract. The mirror image rule in terms of acceptance of a contract refers to the fact that acceptance of the other party to the contract to an offer to the exact mirror image of the offer itself. Of otherwise, the acceptance is deemed to be invalid. In terms of UCC contracts, such rules are more relaxed, and it does not mandate such terms in reference to a contract. Under the UCC, a contract can be in writing or in words or an arrangement between parties that signify all the terms of an agreement. That as per common law principles, the parties must ensure that all the necessary terms of such contract should be specific and explicit. However, as per the UCC only key elements of the contract requirements to be definite. Others can be understood by terms of trade and other factors. Common law is concerned mainly with contracts concerning properties and services, whereas UCC is mainly concerned with tangible goods sold by merchants. Example: Seller Z makes an offer to sell his car for 40,000 dollars. Person M, who is interested in purchasing the car, accepts the offer at the same price offered by seller Z. This will signify as a contract under the UCC principle, as the offer has been accepted as it was given to the buyer, i.e., it is the exact lookalike and spitting image of the earlier offer. If person M, who is interested in purchasing the car, is offered a contract of sale for 40,000 dollars, strikes out the amount, and replaces it with 37,000 dollars as the consideration amount, then it would not remain a contract as per the common law principles. However, it may signify as a contract under UCC guidelines if seller Z accepts the price.
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