At some point in everyone’s life, he or she is going to be either a buyer or a seller. While most sales contracts or sales purchases are done without legal representation, the rights of both seller and buyer are protected under the Uniform Commercial Code. While the UCC does not alter business law its 10 articles help unify the laws to protect consumer rights (Scarborough, 2012). Article 2 of the Code pertains to the sales of goods and includes legislation on sales contracts, warranties, product liabilities, and breaches. Good faith tends to be one of the major determining factors when considering proper protection and the basis of breaches, especially in the United States (Scarborough, 2012; Martin, 2006).
The basic principles of the sales contract are agreement, consideration, capacity, and legality and the UCC, Article 2 considers the sale of every good but they must be personal property, tangible, and moveable. To be considered under Article 2 they goods cannot be real estate or services (Scarborough, 2012). A sales contract occurs when the title of a product is passed from a seller to a buyer for a price. That contract does not have to be written, but can be verbal or implied as long as an exchange occurs. Even in the case of bartering between the seller and buyer, as long as an additional offer is responded too, the UCC will consider this to be in good faith. This is true even if a written contract has omitted items such as price or delivery date. While the sales contract has to do with the actual exchange of price for the product, warranties and liabilities have to do with the product or goods themselves.
Both warranties and liabilities fall under Tort Law that represents injury or damage done by one party to another or his or her property. A sales warranty is a promise that a good or product will perform to a certain standard, while product liability has to do with the responsibility to compensate a person for damages or injury that their product or good did to the person or their property (Scarborough, 2012; Cornell University, 2013). Under Article 2 of the UCC, warranties are implied unless the seller states that they are selling the product as is, otherwise, the implied warranty of title expects the product to be of “at least” average quality. In addition to implied warranty, sales people have to be especially careful because the UCC states that words and actions about the conditions or qualities of a product can be consider an express warranty (Scarborough, 2012). Those actions and words can become a problem for a company when the product fails to do what was expressed or damages occur. Negligence is one of the biggest claims under product liability and depending on the situation can fall back onto the maker of the product or the seller depending on where it is determined that the fault lies (Scarborough, 2012). This can ultimately bankrupt a company if not careful. This would be considered a form of breach called...