The Uniform Commercial Code Survey: Introduction
The survey that follows highlights the most important developments of 2016 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title, investment securities, and secured transactions. Along with the usual descriptions of interesting judicial decisions highlighted in the survey, there has also been legislative progress in several areas. The 2012 amendments to U.C.C. Article 4A, which address issues related to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, have been adopted by forty-six states and the District of Columbia, and introduced in Connecticut and Oklahoma.1 In 2011, the Uniform Law Commission completed a new Uniform Certificate of Title for Vessels Act that is designed to harmonize state certificate of title laws with federal laws regarding vessels, and with Article 9 to impede theft and facilitate boat financing.2 This has been adopted by the states of Virginia and Connecticut, as well as the District of Columbia, but is not currently under consideration anywhere else as of the date of this survey.3 Adoption of the 2003 revisions of Article 7 has now been accomplished by all fifty states and the District of Columbia, with Missouri’s adoption earlier this year.4
There were also significant and instructive judicial developments in 2016. There were interesting developments under Article 2, including formation decisions applying section 2-207(3) in a case where both the buyer’s purchase order and the seller’s sales order confirmation objected to the terms and conditions of the other party. When a dispute arose concerning indemnity for a failed adhesive, the court granted summary judgment to the seller, finding that because both parties objected to the terms of the other, the contract was formed under section 2-207(3) and did not include the indemnity. In another case where the writings did not agree, the court granted partial summary judgment to a buyer of wooden pallets that became moldy, finding a contract formed by conduct under section 2-207(3) and turning to the Code’s supplementary terms on course of dealing to supply the terms.5
The survey of cases under the United Nations Convention on International Sales of Goods (“C.I.S.G.”) covered one notable case that considered the application of the C.I.S.G. where neither party had raised its application until more than three years after the suit was filed. The United States Court of Appeals for the Second Circuit clarified the issue of waiver, holding that the C.I.S.G. is “incorporated federal law, which applies ‘so long as the parties have not elected to exclude its application.’”6
The leasing survey also includes a number of interesting cases, particularly in interpreting “true lease” status. One case from the Northern District of New York Bankruptcy Court involved a lease with end-of-term options that required the lessee either to purchase the equipment for a fixed price, or return it to the lessor. In analyzing the lease under the “bright-line” test, the court ultimately concluded that the customer was economically compelled to purchase the equipment by comparing the cost to purchase the …
