UCC v.
Common Law
Sunday, December 12, 2010
8:29 AM
Differences!
Topic Common Law
Mailbox rule Ordinarily, acceptance is effective on
dispatch. Only if acceptance is
attempted by an "unauthorized" mode
of communication is acceptance
delayed until its receipt by the offeror.
Counter-offer Mirror-image rule
Option Contract / Firm Offer Offer that is not supported by
consideration or detrimental reliance
can be revoked at the will of the offeror,
even if he has promised to hold the
offer open.
Modification Need consideration. Pre-existing duty
rule.
The traditional common law rule is that
a threat to breach a contract does
not constitute duress
NOM clause NOM clause was avoidable by mutual
agreement.
At common law, if a contract provides
that it cannot be modified or
rescinded except in writing, an oral
modification is nonetheless binding.
Contracts Page 1
UCC
Further liberalized in favor of the offeree
who obtains the benefit of the "mailbox
rule" (acceptance effective upon dispatch) if
any mode of communication commercially
reasonable under the circumstances is used.
Acceptance containing additional terms is
sufficient to form a contract unless the
acceptance is expressly made conditional on
assent to the additional terms.
Merchant's Firm Offer = irrevocable offer
without consideration. The requisites are:
(1) a signed writing; (2) language assuring
that the offer will be held open; (3) the
offeror must be a merchant; (4) the
period of irrevocability may not exceed
three months; and (5) if the language
of irrevocability appears on the offeree’s
form it must be separately signed by
the offeror.
Don't need consideration.
UCC § 2-209
Under the UCC the extortion of a
modification without a legitimate
commercial reason is ineffective as a
violation of the good faith provisions of the
Code. Conversely, a modification based
upon a legitimate commercial reason
does not constitute duress unless undue
coercion is applied. Nor can a mere
technical consideration support a
modification extracted in bad faith.
UCC strictly enforces the NOM clause.
Between merchants: NOM clause effective
without signature.
Non-Merchants: NOM clause must be
signed by non-merchant to be enforceable.
Under 2-209(2) such a provision will be
honored. A modification (or rescission) will
be enforced only if the modifying
agreement is in a signed writing. If the form
containing the provision is prepared by a

Indefiniteness The offer must be so definite as to its
material terms or require such
definite terms in the acceptance that
the promises and the performances
to be rendered by each party are
reasonably certain. To be reasonably
certain, a term need not be set forth
with optimal specificity. It is enough
that the agreement is sufficiently
explicit so that the court can perceive
the parties’ respective obligations. What
is reasonably certain depends on
subject matter, the purposes and
relationship of the parties, and the
circumstances under which the
agreement was made.
If a bilateral agreement permits a party The UCC, with its insistence on good faith,
to supply a material term, the
promise at common law sometimes was the right of a party to supply a term.
deemed to be illusory and,
therefore, the bilateral agreement void
under the mutuality doctrine.
Contracts Page 2
containing the provision is prepared by a
merchant, a non-merchant will be bound by
it only if this provision is separately signed.
If a signed writing is required under the
provisions of subsections (2) and (3), and
the modifying agreement is not in a signed
writing, it may nevertheless be enforced if
there has been performance under the
modifying agreement. Subsection (5)
provides that, despite performance,
a party as to the unperformed part may
reinstate the original agreement unless to
do so would be unjust in view of a material
change of position as a result of reliance
upon the modification.
Even if one or more terms are left open, a
contract for sale does not fail
for indefiniteness if the parties have
intended to make a contract and
there is a reasonably certain basis for giving
an appropriate remedy. (UCC § 2–204(3)).
The test is not certainty as to what the
parties were to do nor as to the exact
amount of damages due to the plaintiff.
Rather, commercial standards on the issue
of indefiniteness are to be applied.
changes the common law rule relating to