# MATVWV NESKV–WIKV VHAKA

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URL: https://www.frixlaw.com/law-library/documents/tribal%3Amuscogee_creek_nation%3A48133ce140a82218

## Record

- **Collection:** Tribal code
- **Document type:** Tribal code

## Text

TITLE 33.

UNIFORM COMMERCIAL
CODE
MATVWV NESKV–WIKV VHAKA

Chapter
Section
1.
GENERAL PROVISIONS.TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 1–101
2.
SALES. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 2–101
2A. LEASES. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT2A–101
3.
NEGOTIABLE INSTRUMENTS.TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 3–101
4.
BANK DEPOSITS AND COLLECTIONS. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 4–101
4A. FUNDS TRANSFERS. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT4A–101
5.
LETTERS OF CREDIT. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 5–101
6.
BULK SALES [RESERVED]
7.
WAREHOUSE RECEIPTS, BILLS OF LADING, AND OTHER
DOCUMENTS OF TITLE. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 7–101
8.
INVESTMENT SECURITIES. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 8–101
9.
SECURED TRANSACTIONS.TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 9–101
10 to 14. RESERVED
15.
UNIFORM ELECTRONIC TRANSACTIONS ACT. TTTTTTTTTTTTTTTTTTTTTTT 15–101
Historical and Statutory Notes
NCA 07–107, § 2, provides:
‘‘Findings: There is a compelling need for
establishment of a Uniform Commercial Code
(UCC) within the Muscogee (Creek) Nation to
promote sustainable and diversified economic
development. This UCC helps create an environment that encourages lenders and non-tribal
businesses to do business, not only with the
Nation, but also with tribal citizens and nontribally owned Indian businesses, while protecting the interests of all parties engaged in business and financial transactions. This UCC is
key to establishment of a governing legal infrastructure that not only supports and strengthens

the effective exercise of tribal sovereignty, but
also satisfies the fears that are often expressed
by prospective lenders, business people and investors. Lacking a UCC, lenders are less likely
to lend, businesses are less inclined to do business, and investors are less likely to invest.
This comprehensive UCC, carefully drafted to
incorporate important elements which protect
tribal sovereign immunity while encouraging
business, will provide the certainty and predictability the business and lending community require to invest in the future of the Muscogee
(Creek) Nation.’’

Cross References
Office of Secretary of Nation, duties and responsibilities, see Title 16, § 8–103.

CHAPTER 1.

GENERAL PROVISIONS

Subchapter
1. Titles, Construction, Application, and Subject Matter of Act
2. General Definitions and Principles of Interpretation
3. Territorial Applicability and General Rules

SUBCHAPTER 1. TITLES, CONSTRUCTION, APPLICATION,
AND SUBJECT MATTER OF ACT
Section
1–101. Short titles.

191

Title 33, § 1–101

UNIFORM COMMERCIAL CODE

Section
1–102. Scope of chapter.
1–103. Construction of Uniform Commercial Code to promote its purposes and policies; applicability of supplemental principles of law.
1–104. Construction against implicit repeal.
1–105. Severability.
1–106. Use of singular and plural; gender.
1–107. Section captions.
1–108. Electronic signatures in Global and National Commerce Act superseded, modified, and limited.

§ 1–101. Short titles
(a) The sovereign immunity of neither this Nation or any of its agencies or
instrumentalities is waived with respect to any provision of any transaction
subject to this Title, absent a recorded, properly ratified, express waiver of
sovereign immunity.
(b) This Title does not apply to any property interest that is subject to federal
restrictions regarding its sale, transfer or encumbrance.
(c) Sections 1–101 through 11–107 of this Title shall be known and may be
cited as the ‘‘Uniform Commercial Code’’. With the exception of Title 33,
Section 1–301, and Chapter 9 (Secured Transactions), this Title is coextensive
with Title 12A, Sections 1–101 through 11–107 of the Oklahoma Statutes
Annotated and interpretation of this Title shall generally comport with Oklahoma cases interpreting those statutes, except those that conflict with Muscogee (Creek) Nation law, but not unwritten Mvskoke traditional law and customs.
(d) Chapters, subchapters, section numbers and subject matter of this Title
shall generally correspond to articles, parts and section numbers appearing in
the Oklahoma Statutes Annotated in order to facilitate ease of use and crossreference of notes, official comments and pertinent case law, except as indicated in paragraph (c) of this section.
(e) This chapter shall be known and may be cited as ‘‘Uniform Commercial
Code—General Provisions’’.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O116.
Westlaw Topic No. 361.
C.J.S. Statutes §§ 217 to 220, 238, 240, 242.

§ 1–102. Scope of chapter
This chapter applies to a transaction to the extent that it is governed by
another chapter of the Uniform Commercial Code.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O179.
Westlaw Topic No. 361.
C.J.S. Statutes §§ 306, 308 to 309.

192

Title 33, § 1–105

GENERAL PROVISIONS

§ 1–103. Construction of Uniform Commercial Code to promote its purposes and policies; applicability of supplemental principles of
law
(a) The Uniform Commercial Code shall be liberally construed and applied to
promote its underlying purposes and policies, which are:
(1) to simplify, clarify and modernize the law governing commercial transactions;
(2) to permit the continued expansion of commercial practices through
custom, usage and agreement of the parties; and
(3) to make uniform the law among the various jurisdictions.
(b) Unless displaced by the particular provisions of the Uniform Commercial
Code, the principles of law and equity, including the law merchant and the law
relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O179, 226.
Westlaw Topic No. 361.
C.J.S. Statutes §§ 306, 308 to 309, 358 to 361.

§ 1–104. Construction against implicit repeal
The Uniform Commercial Code being a general act intended as a unified
coverage of its subject matter, no part of it shall be deemed to be impliedly
repealed by subsequent legislation if such construction can reasonably be
avoided.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O159.
Westlaw Topic No. 361.
C.J.S. Statutes § 287.

§ 1–105. Severability
If any provision or clause of this Commercial Code, or its application to any
person or circumstance is held invalid, the invalidity does not affect other
provisions or applications of the Commercial Code which can be given effect
without the invalid provision or application, and to this end the provisions of
the Commercial Code are severable.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O64(2).
Westlaw Topic No. 361.

C.J.S. Statutes §§ 83, 87, 89 to 90, 94 to 97,
99, 102 to 104, 107.

193

Title 33, § 1–106

UNIFORM COMMERCIAL CODE

§ 1–106. Use of singular and plural; gender
In the Uniform Commercial Code, unless the statutory context otherwise
requires:
(1) words in the singular number include the plural, and in the plural include
the singular; and
(2) words of any gender include any other gender.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O188.
Westlaw Topic No. 361.

C.J.S. Statutes §§ 306, 321, 324 to 326, 330,
334.

§ 1–107. Section captions
Section captions are part of the Commercial Code.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Uniform Electronic Transactions Act, applicability of this section, see Title 33, § 15–103.

Library References
Statutes O211.
Westlaw Topic No. 361.
C.J.S. Statutes § 306.

§ 1–108. Electronic signatures in Global and National Commerce Act superseded, modified, and limited
Chapter 1 of the Uniform Commercial Code modifies, limits, and supersedes
the federal Electronic Signatures in Global and National Commerce Act, 15
U.S.C., Section 7001 et seq., except that nothing in this article modifies, limits
or supersedes Section 7001(c) of that Act or authorizes electronic delivery of
any of the notices described in Section 7003(b) of that Act.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O35.
Signatures O1.
Westlaw Topic Nos. 95, 355.

C.J.S. Contracts § 75.
C.J.S. Signatures §§ 1 to 16.

SUBCHAPTER 2. GENERAL DEFINITIONS AND
PRINCIPLES OF INTERPRETATION
Section
1–201. General definitions and principles of interpretation.
1–202. Notice; knowledge.
1–203. Lease distinguished from security interest.
1–204. Value.
1–205. Reasonable time; seasonableness.
1–206. Presumptions.

194

GENERAL PROVISIONS

Title 33, § 1–201

§ 1–201. General definitions and principles of interpretation
(a) Unless the context otherwise requires, words or phrases defined in this
section, or in the additional definitions contained in other articles of the
Uniform Commercial Code that apply to particular articles or parts thereof,
have the meanings stated.
(b) Subject to definitions contained in other articles of the Uniform Commercial Code that apply to particular articles or parts thereof:
(1) ‘‘Action’’ in the sense of a judicial proceeding includes a recoupment,
counterclaim, setoff, suit in equity, and any other proceedings in which rights
are determined.
(2) ‘‘Aggrieved party’’ means a party entitled to pursue a remedy.
(3) ‘‘Agreement’’, as distinguished from ‘‘contract’’, means the bargain of the
parties in fact as found in their language or inferred from other circumstances
including course of performance, course of dealing, or usage of trade as
provided in Section 1–303 of this Title.
(4) ‘‘Bank’’ means a person engaged in the business of banking and includes
a savings bank, savings and loan association, credit union, and trust company.
(5) ‘‘Bearer’’ means a person in control of a negotiable electronic document
of title or a person in possession of an instrument, negotiable tangible document of title, or certificated security payable to bearer or endorsed in blank.
(6) ‘‘Bill of lading’’ means a document of title evidencing the receipt of goods
for shipment issued by a person engaged in the business of directly or indirectly
transporting or forwarding goods. The term does not include a warehouse
receipt.
(7) ‘‘Branch’’ includes a separately incorporated foreign branch of a bank.
(8) ‘‘Burden of establishing’’ means the burden of persuading the trier of fact
that the existence of the fact is more probable than its nonexistence.
(9) ‘‘Buyer in ordinary course of business’’ means a person that buys goods
in good faith, without knowledge that the sale violates the rights of another
person in the goods, and in the ordinary course from a person, other than a
pawnbroker, in the business of selling goods of that kind. A person buys goods
in the ordinary course if the sale to the person comports with the usual or
customary practices in the kind of business in which the seller is engaged or
with the seller’s own usual or customary practices. A person that sells oil, gas,
or other minerals at the wellhead or minehead is a person in the business of
selling goods of that kind. A buyer in ordinary course of business may buy for
cash, by exchange of other property, or on secured or unsecured credit, and
may acquire goods or documents of title under a preexisting contract for sale.
Only a buyer that takes possession of the goods or has a right to recover the
goods from the seller under Chapter 2 may be a buyer in ordinary course of
business. ‘‘Buyer in ordinary course of business’’ does not include a person
that acquires goods in a transfer in bulk or as security for or total or partial
satisfaction of a money debt.
195

Title 33, § 1–201

UNIFORM COMMERCIAL CODE

(10) ‘‘Conspicuous’’, with reference to a term means so written, displayed, or
presented that a reasonable person against whom it is to operate ought to have
noticed it. Whether a term is ‘‘conspicuous’’ or not is a decision for the court.
Conspicuous terms include the following:
(A) a heading in capitals equal to or greater in size than the surrounding text,
or in contrasting type, font, or color to the surrounding text of same or lesser
size; and
(B) language in the body of a record or display in larger type than the
surrounding text of the same size, or set off from surrounding text of the same
size by symbols or other marks that call attention to the language.
(11) ‘‘Consumer’’ means an individual who enters into a transaction primarily for personal, family, or household purposes.
(12) ‘‘Contract’’, as distinguished from ‘‘agreement’’, means the total legal
obligation that results from the parties’ agreement as determined by the
provisions of the Uniform Commercial Code as supplemented by any other
applicable laws.
(13) ‘‘Creditor’’ includes a general creditor, a secured creditor, a lien creditor, and any representative of creditors, including an assignee for the benefit of
creditors, a trustee in bankruptcy, a receiver in equity, and an executor or
administrator of an insolvent debtor’s or assignor’s estate.
(14) ‘‘Defendant’’ includes a person in the position of defendant in a counterclaim, cross-claim, or third-party claim.
(15) ‘‘Delivery’’ with respect to an electronic document of title means voluntary transfer of control and with respect to an instrument, a tangible document
of title, or chattel paper means voluntary transfer of possession.
(16) ‘‘Document of title’’ means a record that in the regular course of
business or financing is treated as adequately evidencing that the person in
possession or control of the record is entitled to receive, control, hold, and
dispose of the record and the goods the record covers and that purports to be
issued by or addressed to a bailee and to cover goods in the bailee’s possession
which are either identified or are fungible portions of an identified mass. The
term includes a bill of lading, transport document, dock warrant, dock receipt,
warehouse receipt, and order for delivery of goods. An electronic document of
title means a document of title evidenced by a record consisting of information
stored in an electronic medium. A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed
on a tangible medium.
(17) ‘‘Fault’’ means a default, breach, or wrongful act or omission.
(18) ‘‘Fungible goods’’ means:
(A) goods of which any unit, by nature or usage of trade, is the equivalent of
any other like unit; or
(B) goods that by agreement are treated as equivalent.
(19) ‘‘Genuine’’ means free of forgery or counterfeiting.
196

GENERAL PROVISIONS

Title 33, § 1–201

(20) ‘‘Good faith’’, except as otherwise provided in Chapter 5 of this Title,
means honesty in fact and the observance of reasonable commercial standards
of fair dealing.
(21) ‘‘Holder’’ means:
(A) the person in possession of a negotiable instrument that is payable either
to bearer or to an identified person that is the person in possession;
(B) the person in possession of a document of title if the goods are deliverable either to bearer or to the order of the person in possession; or
(C) the person in control of a negotiable electronic document of title.
(22) ‘‘Insolvency proceeding’’ includes any assignment for the benefit of
creditors or other proceeding intended to liquidate or rehabilitate the estate of
the person involved.
(23) ‘‘Insolvent’’ means:
(A) having generally ceased to pay debts in the ordinary course of business
other than as a result of bona fide dispute;
(B) being unable to pay debts as they become due; or
(C) being insolvent within the meaning of the federal bankruptcy law.
(24) ‘‘Money’’ means a medium of exchange authorized or adopted by a
domestic or foreign government. The term includes a monetary unit of account
established by an intergovernmental organization or by agreement between two
or more countries.
(25) ‘‘Nation’’ means the Muscogee (Creek) Nation
(26) ‘‘Organization’’ means a person other than an individual.
(27) ‘‘Party’’, as distinguished from ‘‘third party’’, means a person who has
engaged in a transaction or made an agreement subject to the Uniform
Commercial Code.
(28) ‘‘Person’’ means an individual, corporation, business trust, estate, trust,
partnership, limited liability company, association, joint venture, government,
governmental subdivision, agency, or instrumentality, public corporation, or
any other legal or commercial entity.
(29) ‘‘Present value’’ means the amount as of a date certain of one or more
sums payable in the future, discounted to the date certain by use of either an
interest rate specified by the parties if that rate is not manifestly unreasonable
at the time the transaction is entered into or, if an interest rate is not so
specified, a commercially reasonable rate that takes into account the facts and
circumstances at the time the transaction is entered into.
(30) ‘‘Purchase’’ means taking by sale, discount, negotiation, mortgage,
pledge, lien, security interest, issue or reissue, gift, or any other voluntary
transaction creating an interest in property.
(31) ‘‘Purchaser’’ means a person who takes by purchase.
(32) ‘‘Record’’ means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in perceivable
form.
197

Title 33, § 1–201

UNIFORM COMMERCIAL CODE

(33) ‘‘Remedy’’ means any remedial right to which an aggrieved party is
entitled with or without resort to a tribunal.
(34) ‘‘Representative’’ means a person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor,
or administrator of an estate.
(35) ‘‘Right’’ includes remedy.
(36) ‘‘Security interest’’ means an interest in personal property or fixtures
which secures payment or performance of an obligation. ‘‘Security interest’’
includes any interest of a consignor and a buyer of accounts, chattel paper, a
payment intangible, or a promissory note in a transaction that is subject to
Chapter 9 of this Title. ‘‘Security interest’’ does not include the special property
interest of a buyer of goods on identification of those goods to a contract for
sale under Section 2–401 of this Title, but a buyer may also acquire a ‘‘security
interest’’ by complying with the provisions of Chapter 9 of this Title. Except as
otherwise provided in Section 2–505 of this Title, the right of a seller or lessor
of goods under Chapter 2 or 2A of this Title to retain or acquire possession of
the goods is not a ‘‘security interest’’, but a seller or lessor may also acquire a
‘‘security interest’’ by complying with Chapter 9 of this Title. The retention or
reservation of title by a seller of goods notwithstanding shipment or delivery to
the buyer under Section 2–401 of this Title is limited in effect to a reservation of
a ‘‘security interest’’. Whether a transaction in the form of a lease creates
security interest is determined pursuant to Section 1–203 of this Title.
(37) ‘‘Send’’ in connection with any writing, record, or notice means:
(A) to deposit in the mail or deliver for transmission by any other usual
means of communication with postage or cost of transmission provided for and
properly addressed and, in the case of an instrument, to an address specified
thereon or otherwise agreed, or if there be none, to any address reasonable
under the circumstances; or
(B) in any other way to cause to be received any record or notice within the
time at which it would have arrived if properly sent.
(38) ‘‘Signed’’ includes any symbol executed or adopted with present intention to adopt or accept a writing.
(39) ‘‘State’’ means a state of the United States, the District of Columbia,
Puerto Rico, the United States Virgin Islands, or any territory or insular
possession subject to the jurisdiction of the United States.
(40) ‘‘Surety’’ includes guarantor or other secondary obligor.
(41) ‘‘Term’’ means a portion of an agreement which relates to a particular
matter.
(42) ‘‘Unauthorized signature’’ means a signature made without actual, implied or apparent authority. The term includes a forgery.
(43) ‘‘Warehouse receipt’’ means a document of title issued by a person
engaged in the business of storing goods for hire.
198

Title 33, § 1–202

GENERAL PROVISIONS

(44) ‘‘Writing’’ includes printing, typewriting, or any other intentional reduction to tangible form. ‘‘Written’’ has a corresponding meaning.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

Prove defined, see Title 33, § 4A–105.
Uniform Electronic Transactions Act, transferable records, see Title 33, § 15–116.

Library References
Statutes O179.
Westlaw Topic No. 361.
C.J.S. Statutes §§ 306, 308 to 309.

§ 1–202. Notice; knowledge
A.

Subject to subsection F, a person has ‘‘notice’’ of a fact if the person:

(1) has actual knowledge of it;
(2) has received a notice or notification of it; or
(3) from all the facts and circumstances known to the person at the time in
question, has reason to know it exists.
B. ‘‘Knowledge’’ means actual knowledge. ‘‘Knows’’ has a corresponding
meaning.
C. ‘‘Discover’’, learn or words of similar import refer to knowledge rather
than to reason to know.
D. A person ‘‘notifies’’ or ‘‘gives’’ a notice or notification to another person
by taking such steps as may be reasonably required to inform the other person
in ordinary course, whether or not the other person actually comes to know of
it.
E. Subject to subsection F, a person ‘‘receives’’ a notice or notification
when:
(1) it comes to that persons attention; or
(2) it is duly delivered in a form reasonable under the circumstances at the
place of business through which the contract was made or at another location
held out by that person as the place for receipt of such communications.
F. Notice, knowledge or a notice or notification received by an organization
is effective for a particular transaction from the time it is brought to the
attention of the individual conducting that transaction and, in any event, from
the time it would have been brought to the individuals attention if the organization had exercised due diligence. An organization exercises due diligence if it
maintains reasonable routines for communicating significant information to the
person conducting the transaction and there is reasonable compliance with the
routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the
individuals regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.
[Added by NCA 07–251, § 1, eff. Oct. 10, 2007.]

199

Title 33, § 1–202

UNIFORM COMMERCIAL CODE
Cross References

Time payment order is received, see Title 33, § 4A–106.

Library References
Notice O1 to 12.
Westlaw Topic No. 277.
C.J.S. Notice §§ 2 to 10, 12 to 34.

§ 1–203. Lease distinguished from security interest
(a) Whether a transaction in the form of a lease creates a lease or security
interest is determined by the facts of each case.
(b) A transaction creates a security interest if the consideration that the
lessee is to pay the lessor for the right to possession and use of the goods is an
obligation for the term of the lease not subject to termination by the lessee, and:
(1) the original term of the lease is equal to or greater than the remaining
economic life of the goods;
(2) the lessee is bound to renew the lease for the remaining economic life of
the goods or is bound to become the owner of the goods;
(3) the lessee has an option to renew the lease for the remaining economic
life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement; or
(4) the lessee has an option to become the owner of the goods for no
additional consideration or for nominal additional consideration upon compliance with the lease agreement.
(c) A transaction in the form of a lease does not create a security interest
merely because:
(1) the present value of the consideration the lessee is obligated to pay the
lessor for the right to possession and use of the goods is substantially equal to
or is greater than the fair market value of the goods at the time the lease is
entered into;
(2) the lessee assumes risk of loss of the goods;
(3) the lessee agrees to pay, with respect to the goods, taxes, insurance, filing,
recording, or registration fees, or service or maintenance costs;
(4) the lessee has an option to renew the lease or to become the owner of the
goods;
(5) the lessee has an option to renew the lease for a fixed rent that is equal to
or greater than the reasonably predictable fair market rent for the use of the
goods for the term of the renewal at the time the option is to be performed; or
(6) the lessee has an option to become the owner of the goods for a fixed
price that is equal to or greater than the reasonably predictable fair market
value of the goods at the time the option is to be performed.
(d) Additional consideration is nominal if it is less than the lessee’s reasonably predictable cost of performing under the lease agreement if the option is
not exercised. Additional consideration is not nominal if:
200

Title 33, § 1–205

GENERAL PROVISIONS

(1) when the option to renew the lease is granted to the lessee, the rent is
stated to be the fair market rent for the use of the goods for the term of the
renewal determined at the time the option is to be performed, or
(2) when the option to become the owner of the goods is granted to the
lessee, the price is stated to be the fair market value of the goods determined at
the time the option is to be performed.
(e) The ‘‘remaining economic life of the goods’’ and ‘‘reasonably predictable’’
fair market rent, fair market value, or cost of performing under the lease
agreement must be determined with reference to the facts and circumstances at
the time the transaction is entered into.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Secured Transactions O10.
Westlaw Topic No. 349A.
C.J.S. Secured Transactions §§ 2, 6, 20 to 27.

§ 1–204. Value
Except as otherwise provided in Chapters 3, 4 and 5 of the Uniform
Commercial Code, a person gives value for rights if the person acquires them:
(1) in return for a binding commitment to extend credit or for the extension
of immediately available credit, whether or not drawn upon and whether or not
a charge-back is provided for in the event of difficulties in collection;
(2) as security for, or in total or partial satisfaction of, a preexisting claim;
(3) by accepting delivery under a preexisting contract for purchase; or
(4) in return for any consideration sufficient to support a simple contract.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O49.
Sales O19.
Secured Transactions O22.
Westlaw Topic Nos. 95, 343, 349A.

C.J.S. Contracts §§ 87 to 88, 90.
C.J.S. Sales §§ 31 to 34.
C.J.S. Secured Transactions § 29.

§ 1–205. Reasonable time; seasonableness
(a) Whether a time for taking an action required by the Uniform Commercial
Code is reasonable depends on the nature, purpose, and circumstances of the
action.
(b) An action is taken seasonably if it is taken at or within the time agreed or,
if no time is agreed, at or within a reasonable time.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O212.
Westlaw Topic No. 95.
C.J.S. Contracts §§ 581 to 582.

201

Title 33, § 1–206

UNIFORM COMMERCIAL CODE

§ 1–206. Presumptions
Whenever the Uniform Commercial Code creates a ‘‘presumption’’ with
respect to a fact, or provides that a fact is ‘‘presumed’’, the trier of fact must
find the existence of the fact unless and until evidence is introduced that
supports a finding of its nonexistence.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Uniform Electronic Transactions Act, applicability of this section, see Title 33, § 15–103.

Library References
Evidence O87.
Westlaw Topic No. 157.

C.J.S. Evidence §§ 201, 206 to 210, 212 to
214, 234 to 237, 239, 263.

SUBCHAPTER 3. TERRITORIAL APPLICABILITY
AND GENERAL RULES
Section
1–301. Territorial applicability; parties power to choose applicable law.
1–302. Variation by agreement.
1–303. Course of performance, course of dealing, and usage of trade.
1–304. Obligation of good faith.
1–305. Remedies to be liberally administered.
1–306. Waiver or renunciation of claim or right after breach.
1–307. Prima facie evidence by third party documents.
1–308. Performance or acceptance under reservation of rights.
1–309. Option to accelerate at will.
1–310. Subordination of obligations.

§ 1–301. Territorial applicability; parties power to choose applicable law
(a) In this section:
(1) ‘‘Domestic transaction’’ means a transaction other than an international
transaction.
(2) ‘‘International transaction’’ means a transaction that bears a reasonable
relation to a country other than the United States.
(b) This section applies to a transaction to the extent that it is governed by
another chapter of the Commercial Code.
(c) Except as provided hereafter in this section, when a transaction bears a
reasonable relation to this Nation and also to another state, Indian Tribe or
country, the parties may agree that the law either of this Nation or of such
other state, Indian Tribe or country shall govern their rights and duties. In the
absence of such agreement and except as provided in subsections (e), (f) and
(g), the rights and obligations of the parties are determined by the law that
would be selected by this Nations conflict of laws principles.
(d) An agreement by parties to a domestic or international transaction that
any or all of their rights and obligations are to be determined by the laws of the
Nation, another Indian Tribe, state or country is effective, whether or not the
202

Title 33, § 1–301

GENERAL PROVISIONS

transaction bears a relation to the Nation, Indian Tribe, state or country
designated.
(e) If one of the parties to a transaction is a consumer, the following rules
apply:
(1) An agreement referred to in subsection (d) is not effective unless the
transaction bears a reasonable relation to the Nation, another Indian Tribe,
state or country designated.
(2) Application of the law of the Nation, another Indian Tribe, state or
country under subsections (d) and (g) may not deprive the consumer of the
protection of any rule of law governing a matter within the scope of this
section, which is both protective of consumers and may not be varied by
agreement:
(i) of the Nation, another Indian Tribe, state or country in which the
consumer principally resides, unless paragraph (c) applies; or
(ii) if the transaction is a sale of goods, and the Nation, another Indian Tribe,
state or country in which the consumer both makes the contract and takes
delivery of those goods, is not the Nation, another Indian Tribe, state or country
in which the consumer principally resides.
(f) An agreement otherwise effective under subsection (d) is not effective to
the extent that application of the law of the Nation, another Indian Tribe, state
or country designated would be contrary to a fundamental policy of the Nation,
another Indian Tribe, state or country whose law would govern in the absence
of such an agreement .
(g) To the extent that the Uniform Commercial Code governs a transaction, if
one of the following provisions of the Uniform Commercial Code specifies the
applicable law, that provision governs and a contrary agreement is effective
only to the extent permitted by the law so specified:
(1) Section 2–402 of this Title;
(2) Sections 2A–105 and 2A–106 of this Title;
(3) Section 4–102 of this Title;
(4) Section 4A–507 of this Title;
(5) Section 5–116 of this Title;
(6) Section 8–110 of this Title; and
(7) Sections 9–301 through 9–307 of this Title.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Action O17.
Contracts O2, 101(1), 129(1), 144, 206.
Westlaw Topic Nos. 13, 95.
C.J.S. Actions §§ 41 to 53.
C.J.S. Conflict of Laws §§ 2 to 3, 12, 15, 20,
23, 27 to 32, 34 to 40, 42 to 48, 50 to 65, 86

203

to 87, 91 to 93, 96 to 97, 100, 102, 105 to
107.
C.J.S. Contracts §§ 13 to 23, 25, 229 to 230,
238 to 240, 359.
C.J.S. Federal Civil Procedure § 306.
C.J.S. Joint Ventures § 10.

Title 33, § 1–302

UNIFORM COMMERCIAL CODE

§ 1–302. Variation by agreement
(a) Except as otherwise provided in subsection (b) of this section or elsewhere in the Uniform Commercial Code, the effect of the Uniform Commercial
Code may be varied by agreement.
(b) The obligations of good faith, diligence, reasonableness, and care prescribed by the Uniform Commercial Code may not be disclaimed by agreement.
The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly
unreasonable. Whenever the Uniform Commercial Code requires an action to
be taken within a reasonable time, a time that is not manifestly unreasonable
may be fixed by agreement.
(c) The presence in certain provisions of the Uniform Commercial Code of
the phrase ‘‘unless otherwise agreed’’ or words of similar import does not imply
that the effect of other provisions may not be varied by agreement under this
section.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O1, 7, 103, 210.
Westlaw Topic No. 95.

C.J.S. Contracts §§ 2 to 3, 9, 12, 34, 195 to
200, 213 to 214, 374, 376.

§ 1–303. Course of performance, course of dealing, and usage of trade
(a) A ‘‘course of performance’’ is a sequence of conduct between the parties
to a particular transaction that exists if:
(1) the agreement of the parties with respect to the transaction involves
repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the performance and
opportunity for objection to it, accepts the performance or acquiesces in it
without objection.
(b) A ‘‘course of dealing’’ is a sequence of conduct concerning previous
transactions between the parties to a particular transaction that is fairly to be
regarded as establishing a common basis of understanding for interpreting
their expressions and other conduct.
(c) A ‘‘usage of trade’’ is any practice or method of dealing having such
regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The
existence and scope of such a usage must be proved as facts. If it is established
that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
(d) A course of performance or course of dealing between the parties or
usage of trade in the vocation or trade in which they are engaged or of which
they are or should be aware is relevant in ascertaining the meaning of the
agreement of the parties, may give particular meaning to specific terms of the
agreement, and may supplement or qualify the terms of the agreement. A
usage of trade applicable in the place in which part of the performance under
the agreement is to occur may be so utilized as to that part of the performance.
204

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GENERAL PROVISIONS

(e) Except as otherwise provided in subsection (f) of this section, the express
terms of an agreement and any applicable course of performance, course of
dealing, or usage of trade must be construed whenever reasonable as consistent
with each other. If such a construction is unreasonable:
(1) express terms prevail over course of performance, course of dealing, and
usage of trade;
(2) course of performance prevails over course of dealing and usage of trade;
and
(3) course of dealing prevails over usage of trade.
(f) Subject to Section 2–209 of Title 33 of the Muscogee (Creek) Nation Code,
a course of performance is relevant to show a waiver or modification of any
term inconsistent with the course of performance.
(g) Evidence of a relevant usage of trade offered by one party is not
admissible unless that party has given the other party notice that the court finds
sufficient to prevent unfair surprise to the other party.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Agreement defined, see Title 33, § 1 –201.

Library References
Contracts O170.
Customs and Usages O1, 9.
Westlaw Topic Nos. 95, 113.

C.J.S. Contracts §§ 338 to 340.
C.J.S. Customs and Usages §§ 1, 7 to 11, 15
to 41.

§ 1–304. Obligation of good faith
Every contract of duty within the Uniform Commercial Code imposes an
obligation of good faith in its performance and enforcement.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O168.
Westlaw Topic No. 95.
C.J.S. Contracts §§ 346 to 347.

§ 1–305. Remedies to be liberally administered
(a) The remedies provided by the Uniform Commercial Code must be liberally administered to the end that the aggrieved party may be put in as good a
position as if the other party had fully performed but neither consequential or
special nor penal damages may be had except as specifically provided in the
Uniform Commercial Code or by other rule of law.
(b) Any right or obligation declared by the Uniform Commercial Code is
enforceable by action unless the provision declaring it specifies a different and
limited effect.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

205

Title 33, § 1–305

UNIFORM COMMERCIAL CODE
Library References

Action O3, 34.
Westlaw Topic No. 13.

C.J.S. Actions §§ 30, 56 to 57, 62 to 64, 67.
C.J.S. Railroads § 1080.

§ 1–306. Waiver or renunciation of claim or right after breach
A claim or right arising out of an alleged breach may be discharged in whole
or in part without consideration by agreement of the aggrieved party in an
authenticated record.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O316.
Westlaw Topic No. 95.
C.J.S. Contracts §§ 557 to 560, 596 to 597.

§ 1–307. Prima facie evidence by third party documents
A document in due form purporting to be a bill of lading, policy or certificate
of insurance, official weigher’s or inspector’s certificate, consular invoice, or
any other document authorized or required by the contract to be issued by a
third party is prima facie evidence of its own authenticity and genuineness and
of the facts stated in the document by the third party.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Evidence O370, 383.
Westlaw Topic No. 157.
C.J.S. Evidence §§ 1083 to 1084, 1086 to
1089, 1092 to 1093, 1095, 1181 to 1193,

1198, 1202, 1205 to 1207, 1213 to 1214,
1219, 1286 to 1305.
C.J.S. Patents § 179.

§ 1–308. Performance or acceptance under reservation of rights
(a) A party that with explicit reservation of rights performs or promises
performance or assents to performance in a manner demanded or offered by
the other party does not thereby prejudice the rights reserved. Such words as
‘‘without prejudice’’, ‘‘under protest’’ or the like are sufficient.
(b) Subsection (a) of this section does not apply to an accord and satisfaction.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Accord and Satisfaction O11(1).
Contracts O305, 316.
Estoppel O90.
Westlaw Topic Nos. 8, 95, 156.
C.J.S. Accord and Satisfaction §§ 32, 51 to
55, 58, 60.

C.J.S. Contracts §§ 557 to 560, 587 to 588,
596 to 597.
C.J.S. Estoppel and Waiver §§ 88 to 89, 175
to 180.

§ 1–309. Option to accelerate at will
A term providing that one party or that party’s successor in interest may
accelerate payment or performance or require collateral or additional collateral
‘‘at will’’ or when the party ‘‘deems itself insecure’’, or in words of similar
import, means that the party shall have power to do so only if that party in
206

Title 33, § 1–310

GENERAL PROVISIONS

good faith believes that the prospect of payment or performance is impaired.
The burden of establishing lack of good faith is on the party against whom the
power has been exercised.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Bills and Notes O129.
Contracts O213, 214.
Secured Transactions O221.
Westlaw Topic Nos. 56, 95, 349A.

C.J.S. Bills and Notes; Letters of Credit §§ 97,
117 to 138.
C.J.S. Contracts §§ 578 to 579, 581, 584.
C.J.S. Secured Transactions §§ 179, 181 to
183, 190.

§ 1–310. Subordination of obligations
An obligation may be issued as subordinated to performance of another
obligation of the person obligated, or a creditor may subordinate its right to
performance of an obligation by agreement with either the person obligated or
another creditor of the person obligated. Such a subordination does not create
a security interest as against either the common debtor or a subordinated
creditor.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Secured Transactions O147.
Westlaw Topic No. 349A.
C.J.S. Secured Transactions § 116.

207

CHAPTER 2.

SALES

Subchapter
1. Short Title, General Construction, and Subject Matter
2. Form, Formation, and Readjustment of Contract
3. General Obligation and Construction of Contract
4. Creditors, Title, and Good Faith Purchasers
5. Performance
6. Breach, Repudiation, and Excuse
7. Remedies

SUBCHAPTER 1. SHORT TITLE,
GENERAL CONSTRUCTION,
AND SUBJECT MATTER
Section
2–101. Short title.
2–102. Scope; certain security and other transactions excluded from this article.
2–103. Definitions and index of definitions.
2–104. Definitions: ‘‘Merchant’’; ‘‘financing agency’’; ‘‘between merchants’’.
2–105. Definitions: Transferability; ‘‘goods’’; ‘‘future goods’’; ‘‘lot’’; ‘‘commercial
unit’’.
2–106. Definitions: ‘‘Contract’’; ‘‘agreement’’; ‘‘contract for sale’’; ‘‘sale’’; ‘‘present
sale’’; ‘‘conforming to contract’’; ‘‘termination’’; ‘‘cancellation’’.
2–107. Goods to be severed from realty; recording.

§ 2–101. Short title
This chapter shall be known and may be cited as Uniform Commercial
Code—Sales.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Statutes O116.
Westlaw Topic No. 361.
C.J.S. Statutes §§ 217 to 220, 238, 240, 242.

§ 2–102. Scope; certain security and other transactions excluded from this
article
Unless the context otherwise requires, this chapter applies to transactions in
goods; it does not apply to any transaction which although in the form of an
unconditional contract to sell or present sale is intended to operate only as a
security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O3.
Westlaw Topic No. 343.
C.J.S. Agency § 15.

C.J.S. Bailments §§ 9 to 12.
C.J.S. Sales §§ 6 to 9, 12 to 14.

208

SALES

Title 33, § 2–103

§ 2–103. Definitions and index of definitions
(1) In this chapter unless the context otherwise requires:
(a) ‘‘Buyer’’ means a person who buys or contracts to buy goods.
(b) ‘‘Receipt’’ of goods means taking physical possession of them.
(c) ‘‘Seller’’ means a person who sells or contracts to sell goods.
(2) Other definitions applying to this article or to specified parts thereof, and
the sections in which they appear are:
‘‘Acceptance’’. Section 2–606 of this Title.
‘‘Banker’s credit’’. Section 2–325 of this Title.
‘‘Between merchants’’. Section 2–104 of this Title.
‘‘Cancellation’’. Section 2–106 of this Title.
‘‘Commercial unit’’. Section 2–105 of this Title.
‘‘Confirmed credit’’. Section 2–325 of this Title.
‘‘Conforming to contract’’. Section 2–106 of this Title.
‘‘Contract for sale’’. Section 2–106 of this Title.
‘‘Cover’’. Section 2–712 of this Title.
‘‘Entrusting’’. Section 2–403 of this Title.
‘‘Financing agency’’. Section 2–104 of this Title.
‘‘Future goods’’. Section 2–105 of this Title.
‘‘Goods’’. Section 2–105 of this Title.
‘‘Identification’’. Section 2–501 of this Title.
‘‘Installment contract’’. Section 2–612 of this Title.
‘‘Letter of credit’’. Section 2–325 of this Title.
‘‘Lot’’. Section 2–105 of this Title.
‘‘Merchant’’. Section 2–104 of this Title.
‘‘Overseas’’. Section 2–323 of this Title.
‘‘Person in position of seller’’. Section 2–707 of this Title.
‘‘Present sale’’. Section 2–106 of this Title.
‘‘Sale’’. Section 2–106 of this Title.
‘‘Sale on approval’’. Section 2–326 of this Title.
‘‘Sale or return’’. Section 2–326 of this Title.
‘‘Termination’’. Section 2–106 of this Title.
(3) ‘‘Control’’ as provided in Section 7–106 of this Title and the following
definitions in other articles apply to this article:
‘‘Check’’. Section 3–104 of this Title.
‘‘Consignee’’. Section 7–102 of this Title.
‘‘Consignor’’. Section 7–102 of this Title.
209

Title 33, § 2–103

UNIFORM COMMERCIAL CODE

‘‘Consumer goods’’. Section 9–106 of this Title.
‘‘Dishonor’’. Section 3–502 of this Title.
‘‘Draft’’. Section 3–104 of this Title.
(4) In addition, Chapter 1 of this Title contains general definitions and
principles of construction and interpretation applicable throughout this chapter.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O1, 54.
Statutes O179.
Westlaw Topic Nos. 343, 361.

C.J.S. Sales §§ 1 to 2, 26 to 27, 35, 38 to 39,
76, 115 to 117, 130 to 145, 149 to 152, 259.
C.J.S. Statutes §§ 306, 308 to 309.

§ 2–104. Definitions: ‘‘Merchant’’; ‘‘financing agency’’; ‘‘between merchants’’
(1) ‘‘Merchant’’ means a person who deals in goods of the kind or otherwise
by his occupation holds himself out as having knowledge or skill peculiar to the
practices or goods involved in the transaction or to whom such knowledge or
skill may be attributed by his employment of an agent or broker or other
intermediary who by his occupation holds himself out as having such knowledge or skill.
(2) ‘‘Financing agency’’ means a bank, finance company or other person who
in the ordinary course of business makes advances against goods or documents
of title or who by arrangement with either the seller or the buyer intervenes in
ordinary course to make or collect payment due or claimed under the contract
for sale, as by purchasing or paying the seller’s draft or making advances
against it or by merely taking it for collection whether or not documents of title
accompany or are associated with the draft. ‘‘Financing agency’’ includes also
a bank or other person who similarly intervenes between persons who are in
the position of seller and buyer in respect to the goods (Section 2–707).
(3) ‘‘Between merchants’’ means in any transaction with respect to which
both parties are chargeable with the knowledge or skill of merchants.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O1, 15.1.
Statutes O179.
Westlaw Topic Nos. 343, 361.

C.J.S. Sales §§ 1 to 2, 5, 26 to 28, 35, 38 to
39, 76, 115 to 117, 259.
C.J.S. Statutes §§ 306, 308 to 309.

§ 2–105. Definitions: Transferability; ‘‘goods’’; ‘‘future goods’’; ‘‘lot’’;
‘‘commercial unit’’
(1) ‘‘Goods’’ means all things (including specially manufactured goods)
which are movable at the time of identification to the contract for sale other
than the money in which the price is to be paid, investment securities (Chapter
8) and things in action. ‘‘Goods’’ also includes the unborn young of animals
and growing crops and other identified things attached to realty as described in
the section on goods to be severed from realty (Section 2–107) but does not
include information.
210

Title 33, § 2–106

SALES

(2) Goods must be both existing and identified before any interest in them
can pass. Goods which are not both existing and identified are ‘‘future’’ goods.
A purported present sale of future goods or of any interest therein operates as a
contract to sell.
(3) There may be a sale of a part interest in existing identified goods.
(4) An undivided share in an identified bulk of fungible goods is sufficiently
identified to be sold although the quantity of the bulk is not determined. Any
agreed proportion of such a bulk or any quantity thereof agreed upon by
number, weight or other measure may to the extent of the seller’s interest in the
bulk be sold to the buyer who then becomes an owner in common.
(5) ‘‘Lot’’ means a parcel or a single article which is the subject matter of a
separate sale or delivery, whether or not it is sufficient to perform the contract.
(6) ‘‘Commercial unit’’ means such a unit of goods as by commercial usage is
a single whole for purposes of sale and division of which materially impairs its
character or value on the market or in use. A commercial unit may be a single
article (as a machine) or a set of articles (as a suite of furniture or an
assortment of sizes) or a quantity (as a bale, gross, or carload) or any other unit
treated in use or in the relevant market as a single whole.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O9.
Statutes O179.
Westlaw Topic Nos. 343, 361.

C.J.S. Sales §§ 3 to 4, 11 to 12, 15 to 17, 29 to
30.
C.J.S. Statutes §§ 306, 308 to 309.

§ 2–106. Definitions: ‘‘Contract’’; ‘‘agreement’’; ‘‘contract for sale’’;
‘‘sale’’; ‘‘present sale’’; ‘‘conforming to contract’’; ‘‘termination’’; ‘‘cancellation’’
(1) In this article unless the context otherwise requires ‘‘contract’’ and
‘‘agreement’’ are limited to those relating to the present or future sale of goods.
‘‘Contract for sale’’ includes both a present sale of goods and a contract to sell
goods at a future time but does not include a license of information. A ‘‘sale’’
consists in the passing of title from the seller to the buyer for a price (Section
2–401). A ‘‘present sale’’ means a sale which is accomplished by the making of
the contract.
(2) Goods or conduct including any part of a performance are ‘‘conforming’’
or conform to the contract when they are in accordance with the obligations
under the contract.
(3) ‘‘Termination’’ occurs when either party pursuant to a power created by
agreement or law puts an end to the contract otherwise than for its breach. On
‘‘termination’’ all obligations which are still executory on both sides are
discharged but any right based on prior breach or performance survives.
(4) ‘‘Cancellation’’ occurs when either party puts an end to the contract for
breach by the other and its effect is the same as that of ‘‘termination’’ except
that the canceling party also retains any remedy for breach of the whole
contract or any unperformed balance.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

211

Title 33, § 2–106

UNIFORM COMMERCIAL CODE
Library References

Sales O3, 84.
Westlaw Topic No. 343.
C.J.S. Agency § 15.

C.J.S. Bailments §§ 9 to 12.
C.J.S. Sales §§ 6 to 9, 12 to 14, 145, 182 to
184.

§ 2–107. Goods to be severed from realty; recording
(1) A contract for the sale of minerals or the like, including oil and gas, or a
structure or its materials to be removed from realty is a contract for the sale of
goods within this chapter if they are to be severed by the seller, but until
severance, a purported present sale thereof which is not effective as a transfer
of an interest in land is effective only as a contract to sell.
(2) A contract for the sale, apart from the land of growing crops or other
things attached to realty and capable of severance without material harm
thereto, but not described in subsection (1) of this section or of timber to be cut
is a contract for the sale of goods within this chapter whether the subject
matter is to be severed by the buyer or by the seller even though it forms part of
the realty at the time of contracting, and the parties can by identification effect
a present sale before severance.
(3) The provisions of this section are subject to any third party rights
provided by the law relating to realty records, and the contract for sale may be
executed and recorded as a document transferring an interest in land and shall
then constitute notice to third parties of the buyer’s rights under the contract
for sale.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O10, 11.
Westlaw Topic No. 343.
C.J.S. Sales §§ 3 to 4, 11 to 12, 15 to 17, 29.

SUBCHAPTER 2. FORM, FORMATION, AND
READJUSTMENT OF CONTRACT
Section
2–201. Formal requirements; statute of frauds.
2–202. Final written expression; parol or extrinsic evidence.
2–203. Seals inoperative.
2–204. Formation in general.
2–205. Firm offers.
2–206. Offer and acceptance in formation of contract.
2–207. Additional terms in acceptance or confirmation.
2–208. Course of performance or practical construction.
2–209. Modification, rescission and waiver.
2–210. Delegation of performance; assignment of rights.

§ 2–201. Formal requirements; statute of frauds
(1) Except as otherwise provided in this section a contract for the sale of
goods for the price of five hundred dollars ($500.00) or more is not enforceable
by way of action or defense unless there is some writing sufficient to indicate
212

Title 33, § 2–202

SALES

that a contract for sale has been made between the parties and signed by the
party against whom enforcement is sought or by his authorized agent or broker.
A writing is not insufficient because it omits or incorrectly states a term agreed
upon but the contract is not enforceable under this paragraph beyond the
quantity of goods shown in such writing.
(2) Between merchants if within a reasonable time a writing in confirmation
of the contract and sufficient against the sender is received and the party
receiving it has reason to know its contents, it satisfies the requirements of
subsection (1) against such party unless written notice of objection to its
contents is given within ten (10) days after it is received.
(3) A contract which does not satisfy the requirements of subsection (1) but
which is valid in other respects is enforceable
(a) if the goods are to be specially manufactured for the buyer and are not
suitable for sale to others in the ordinary course of the seller’s business and the
seller, before notice of repudiation is received and under circumstances which
reasonably indicate that the goods are for the buyer, has made either a
substantial beginning of their manufacture or commitments for their procurement; or
(b) if the party against whom enforcement is sought admits in his pleading,
testimony or otherwise in court that a contract for sale was made, but the
contract is not enforceable under this provision beyond the quantity of goods
admitted; or
(c) with respect to goods for which payment has been made and accepted or
which have been received and accepted (Section 2–606).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Sale on approval and sale or return, see Title 33, § 2–326.

Library References
Frauds, Statute Of O81 to 96.
Westlaw Topic No. 185.
C.J.S. Sales §§ 106 to 108, 111.

§ 2–202. Final written expression; parol or extrinsic evidence
Terms with respect to which the confirmatory memoranda of the parties
agree or which are otherwise set forth in a writing intended by the parties as a
final expression of their agreement with respect to such terms as are included
therein may not be contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or supplemented:
(a) by course of performance, course of dealing or usage of trade and
(b) by evidence of consistent additional terms unless the court finds the
writing to have been intended also as a complete and exclusive statement of the
terms of the agreement.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

213

Title 33, § 2–202

UNIFORM COMMERCIAL CODE
Cross References

Exclusion or modification of warranties, negation or limitation, see Title 33, § 2–316.
Sale on approval and sale or return, see Title 33, § 2–326.

Library References
Evidence O384 to 469.
Westlaw Topic No. 157.
C.J.S. Evidence §§ 1401 to 1614.

§ 2–203. Seals inoperative
The affixing of a seal to a writing evidencing a contract for sale or an offer to
buy or sell goods does not constitute the writing a sealed instrument and the
law with respect to sealed instruments does not apply to such a contract or
offer.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O28.
Seals O1.
Westlaw Topic Nos. 343, 347.

C.J.S. Sales §§ 106 to 108, 112 to 114.
C.J.S. Seals §§ 1 to 2.

§ 2–204. Formation in general
(1) A contract for sale of goods may be made in any manner sufficient to
show agreement, including conduct by both parties which recognizes the
existence of such a contract.
(2) An agreement sufficient to constitute a contract for sale may be found
even though the moment of its making is undetermined.
(3) Even though 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.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Options and cooperation respecting performance, see Title 33, § 2–311.

Library References
Sales O1, 22, 23.
Westlaw Topic No. 343.

C.J.S. Sales §§ 1 to 2, 26 to 27, 35, 38 to 39,
42 to 65, 69, 76, 115 to 117, 259.

§ 2–205. Firm offers
An offer by a merchant to buy or sell goods in a signed writing which by its
terms gives assurance that it will be held open is not revocable, for lack of
consideration, during the time stated or if no time is stated for a reasonable
time, but in no event may such period of irrevocability exceed three (3) months;
but any such term of assurance on a form supplied by the offeree must be
separately signed by the offeror.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

214

Title 33, § 2–207

SALES
Library References
Sales O22(2), 22(5), 23(2), 23(5).
Westlaw Topic No. 343.
C.J.S. Sales §§ 46 to 49, 53, 61, 63, 69.

§ 2–206. Offer and acceptance in formation of contract
(1) Unless otherwise unambiguously indicated by the language or circumstances
(a) an offer to make a contract shall be construed as inviting acceptance in
any manner and by any medium reasonable in the circumstances;
(b) an order or other offer to buy goods for prompt or current shipment shall
be construed as inviting acceptance either by a prompt promise to ship or by
the prompt or current shipment of conforming or nonconforming goods, but
such a shipment of non-conforming goods does not constitute an acceptance if
the seller seasonably notifies the buyer that the shipment is offered only as an
accommodation to the buyer.
(2) Where the beginning of a requested performance is a reasonable mode of
acceptance an offeror who is not notified of acceptance within a reasonable
time may treat the offer as having lapsed before acceptance.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O22, 23.
Westlaw Topic No. 343.
C.J.S. Sales §§ 42 to 65, 69.

§ 2–207. Additional terms in acceptance or confirmation
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even
though it states terms additional to or different from those offered or agreed
upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the
contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within
a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is
sufficient to establish a contract for sale although the writings of the parties do
not otherwise establish a contract. In such case the terms of the particular
contract consist of those terms on which the writings of the parties agree,
together with any supplementary terms incorporated under any other provisions of this act.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

215

Title 33, § 2–207

UNIFORM COMMERCIAL CODE
Library References

Sales O22(4), 23(4).
Westlaw Topic No. 343.
C.J.S. Sales §§ 59 to 65, 69.

§ 2–208. Course of performance or practical construction
(1) Where the contract for sale involves repeated occasions for performance
by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or
acquiesced in without objection shall be relevant to determine the meaning of
the agreement.
(2) The express terms of the agreement and any such course of performance,
as well as any course of dealing and usage of trade, shall be construed
whenever reasonable as consistent with each other; but when such construction is unreasonable, express terms shall control course of performance and
course of performance shall control both course of dealing and usage of trade.
(3) Subject to the provisions of the next section on modification and waiver,
such course of performance shall be relevant to show a waiver or modification
of any term inconsistent with such course of performance.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O54.
Westlaw Topic No. 343.
C.J.S. Sales §§ 130 to 145, 149 to 152.

§ 2–209. Modification, rescission and waiver
(1) An agreement modifying a contract within this chapter needs no consideration to be binding.
(2) A signed agreement which excludes modification or rescission except by a
signed writing cannot be otherwise modified or rescinded, but except as
between merchants such a requirement on a form supplied by the merchant
must be separately signed by the other party.
(3) The requirements of the statute of frauds section of this Chapter (Section
2–201) must be satisfied if the contract as modified is within its provisions.
(4) Although an attempt at modification or rescission does not satisfy the
requirements of subsection (2) or (3) it can operate as a waiver.
(5) A party who has made a waiver affecting an executory portion of the
contract may retract the waiver by reasonable notification received by the other
party that strict performance will be required of any term waived, unless the
retraction would be unjust in view of a material change of position in reliance
on the waiver.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Course of performance, relevance to show waiver or modification of inconsistent terms, see Title
33, § 1–303.

216

Title 33, § 2–210

SALES
Library References
Frauds, Statute Of O131(1).
Sales O89.
Westlaw Topic Nos. 185, 343.

C.J.S. Frauds, Statute Of §§ 181 to 183.
C.J.S. Sales §§ 162 to 174, 179.

§ 2–210. Delegation of performance; assignment of rights
(1) A party may perform his duty through a delegate unless otherwise agreed
or unless the other party has a substantial interest in having his original
promisor perform or control the acts required by the contract. No delegation of
performance relieves the party delegating of any duty to perform or any liability
for breach.
(2) Except as otherwise provided in Chapter 9 of this Title, unless otherwise
agreed all rights of either seller or buyer can be assigned except where the
assignment would materially change the duty of the other party, or increase
materially the burden or risk imposed on him by his contract, or impair
materially his chance of obtaining return performance. A right to damages for
breach of the whole contract or a right arising out of the assignor’s due
performance of his entire obligation can be assigned despite agreement otherwise.
(3) The creation, attachment, perfection, or enforcement of a security interest
in the seller’s interest under a contract is not a transfer that materially changes
the duty of or increases materially the burden or risk imposed on the buyer or
impairs materially the buyer’s chance of obtaining return performance within
the purview of paragraph (2) of this section unless, and then only to the extent
that enforcement actually results in a delegation of material performance of the
seller. Even in that event, the creation, attachment, perfection, and enforcement of the security interest remain effective, but
(i) the seller is liable to the buyer for damages caused by the delegation to the
extent that the damages could not reasonably be prevented by the buyer, and
(ii) a court having jurisdiction may grant other appropriate relief, including
cancellation of the contract for sale or an injunction against enforcement of the
security interest or consummation of the enforcement.
(4) Unless the circumstances indicate the contrary a prohibition of assignment of ‘‘the contract’’ is to be construed as barring only the delegation to the
assignee of the assignor’s performance.
(5) An assignment of ‘‘the contract’’ or of ‘‘all my rights under the contract’’
or an assignment in similar general terms is an assignment of rights and unless
the language or the circumstances (as in an assignment for security) indicate
the contrary, it is a delegation of performance of the duties of the assignor and
its acceptance by the assignee constitutes a promise by him to perform those
duties. This promise is enforceable by either the assignor or the other party to
the original contract.
(6) The other party may treat any assignment which delegates performance
as creating reasonable grounds for insecurity and may without prejudice to his
rights against the assignor demand assurances from the assignee (Section
2–609).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

217

Title 33, § 2–210

UNIFORM COMMERCIAL CODE
Library References

Sales O86, 220.
Westlaw Topic No. 343.
C.J.S. Sales §§ 139 to 140, 409.

SUBCHAPTER 3. GENERAL OBLIGATION
AND CONSTRUCTION OF CONTRACT
Section
2–301. General obligations of parties.
2–302. Reserved.
2–303. Allocation or division of risks.
2–304. Price payable in money, goods, realty, or otherwise.
2–305. Reserved.
2–306. Output, requirements and exclusive dealings.
2–307. Delivery in single lot or several lots.
2–308. Absence of specified place for delivery.
2–309. Absence of specific time provisions; notice of termination.
2–310. Open time for payment or running of credit; authority to ship under reservation.
2–311. Options and cooperation respecting performance.
2–312. Warranty of title and against infringement; buyer’s obligation against infringement.
2–313. Express warranties by affirmation, promise, description, sample.
2–314. Implied warranty: merchantability; usage of trade.
2–315. Implied warranty: fitness for particular purpose.
2–316. Exclusion or modification of warranties.
2–317. Cumulation and conflict of warranties express or implied.
2–318. Third party beneficiaries of warranties express or implied.
2–319. F.O.B. and F.A.S. terms.
2–320. C.I.F. and C. and F. terms.
2–321. C.I.F. or C. and F.
2–322. Delivery.
2–323. Form of bill of lading required in overseas shipment.
2–324. Provisions for ‘‘no arrival, no sale’’.
2–325. Letter of credit.
2–326. Sale on approval and sale or return; consignment sales and rights of creditors.
2–327. Special incidents of sale on approval and sale or return.
2–328. Sale by auction.

§ 2–301. General obligations of parties
The obligation of the seller is to transfer and deliver and that of the buyer is
to accept and pay in accordance with the contract.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O150, 177, 183.
Westlaw Topic No. 343.

C.J.S. Sales §§ 236 to 237, 259 to 260, 279 to
282, 324 to 325, 327 to 328, 344 to 347, 349
to 351, 368, 371.

218

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§ 2–302. Reserved
§ 2–303. Allocation or division of risks
Where this chapter allocates a risk or a burden as between the parties
‘‘unless otherwise agreed’’, the agreement may not only shift the allocation but
may also divide the risk or burden.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O217.
Westlaw Topic No. 343.

§ 2–304. Price payable in money, goods, realty, or otherwise
(1) The price can be made payable in money or otherwise. If it is payable in
whole or in part in goods each party is a seller of the goods which he is to
transfer.
(2) Even though all or part of the price is payable in an interest in realty the
transfer of the goods and the seller’s obligations with reference to them are
subject to this chapter, but not the transfer of the interest in realty or the
transferor’s obligations in connection therewith.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O189.
Westlaw Topic No. 343.
C.J.S. Sales §§ 370 to 371.

§ 2–305. Reserved
§ 2–306. Output, requirements and exclusive dealings
(1) A term which measures the quantity by the output of the seller or the
requirements of the buyer means such actual output or requirements as may
occur in good faith, except that no quantity unreasonably disproportionate to
any stated estimate or in the absence of a stated estimate to any normal or
otherwise comparable prior output or requirements may be tendered or demanded.
(2) A lawful agreement by either the seller or the buyer for exclusive dealing
in the kind of goods concerned imposes unless otherwise agreed an obligation
by the seller to use best efforts to supply the goods and by the buyer to use best
efforts to promote their sale.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O71(4).
Westlaw Topic No. 343.
C.J.S. Sales §§ 303 to 307.

219

Title 33, § 2–307

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§ 2–307. Delivery in single lot or several lots
Unless otherwise agreed all goods called for by a contract for sale must be
tendered in a single delivery and payment is due only on such tender but where
the circumstances give either party the right to make or demand delivery in lots
the price if it can be apportioned may be demanded for each lot.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O163.
Westlaw Topic No. 343.
C.J.S. Sales § 298.

§ 2–308. Absence of specified place for delivery
Unless otherwise agreed
(a) the place for delivery of goods is the seller’s place of business or if he has
none his residence; but
(b) in a contract for sale of identified goods which to the knowledge of the
parties at the time of contracting are in some other place, that place is the place
for their delivery; and
(c) documents of title may be delivered through customary banking channels.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O79.
Westlaw Topic No. 343.
C.J.S. Sales §§ 279 to 280.

§ 2–309. Absence of specific time provisions; notice of termination
(1) The time for shipment or delivery or any other action under a contract if
not provided in this chapter or agreed upon shall be a reasonable time.
(2) Where the contract provides for successive performances but is indefinite
in duration it is valid for a reasonable time but unless otherwise agreed may be
terminated at any time by either party.
(3) Termination of a contract by one party except on the happening of an
agreed event requires that reasonable notification be received by the other
party and an agreement dispensing with notification is invalid if its operation
would be unconscionable.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O81(2), 84, 107, 127.
Westlaw Topic No. 343.

C.J.S. Sales §§ 145, 182 to 184, 223 to 225,
284 to 285, 359 to 360.

§ 2–310. Open time for payment or running of credit; authority to ship
under reservation
Unless otherwise agreed:
(a) payment is due at the time and place at which the buyer is to receive the
goods even though the place of shipment is the place of delivery; and
220

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(b) if the seller is authorized to send the goods he may ship them under
reservation, and may tender the documents of title, but the buyer may inspect
the goods after their arrival before payment is due unless such inspection is
inconsistent with the terms of the contract (Section 2–513); and
(c) if delivery is authorized and made by way of documents of title otherwise
than by subsection (b) then payment is due regardless of where the goods are to
be received
(i) at the time and place at which the buyer is to receive delivery of the
tangible documents or
(ii) at the time the buyer is to receive delivery of the electronic documents
and at the seller’s place of business or if none, the seller’s residence; and
(d) where the seller is required or authorized to ship the goods on credit the
credit period runs from the time of shipment but post-dating the invoice or
delaying its dispatch will correspondingly delay the starting of the credit
period.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O82.
Westlaw Topic No. 343.
C.J.S. Sales § 369.

§ 2–311. Options and cooperation respecting performance
(1) An agreement for sale which is otherwise sufficiently definite (subsection
(3) of Section 2–204) to be a contract is not made invalid by the fact that it
leaves particulars of performance to be specified by one of the parties. Any
such specification must be made in good faith and within limits set by
commercial reasonableness.
(2) Unless otherwise agreed specifications relating to assortment of the goods
are at the buyer’s option and except as otherwise provided in subsections (1)(c)
and (3) of Section 2–319 specifications or arrangements relating to shipment
are at the seller’s option.
(3) Where such specification would materially affect the other party’s performance but is not seasonably made or where one party’s co-operation is
necessary to the agreed performance of the other but is not seasonably forthcoming, the other party in addition to all other remedies
(a) is excused for any resulting delay in his own performance; and
(b) may also either proceed to perform in any reasonable manner or after the
time for a material part of his own performance treat the failure to specify or to
cooperate as a breach by failure to deliver or accept the goods.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O1(4), 64, 83, 154.
Westlaw Topic No. 343.
C.J.S. Sales §§ 115 to 117, 130, 259.

221

Title 33, § 2–312

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§ 2–312. Warranty of title and against infringement; buyer’s obligation
against infringement
(1) Subject to subsection (2) there is in a contract for sale a warranty by the
seller that
(a) the title conveyed shall be good, and its transfer rightful; and
(b) the goods shall be delivered free from any security interest or other lien
or encumbrance of which the buyer at the time of contracting has no knowledge.
(2) A warranty under subsection (1) will be excluded or modified only by
specific language or by circumstances which give the buyer reason to know that
the person selling does not claim title in himself or that he is purporting to sell
only such right or title as he or a third person may have.
(3) Unless otherwise agreed a seller who is a merchant regularly dealing in
goods of the kind warrants that the goods shall be delivered free of the rightful
claim of any third person by way of infringement or the like but a buyer who
furnishes specifications to the seller must hold the seller harmless against any
such claim which arises out of compliance with the specifications.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Effect of acceptance of tender, notice of claim or litigation to person answerable over, see Title 33,
§ 2–607.

Library References
Sales O263.
Westlaw Topic No. 343.
C.J.S. Sales §§ 457, 472.

§ 2–313. Express warranties by affirmation, promise, description, sample
(1) Express warranties by the seller are created as follows:
(a) Any affirmation of fact or promise made by the seller to the buyer which
relates to the goods and becomes part of the basis of the bargain creates an
express warranty that the goods shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the basis of the
bargain creates an express warranty that the goods shall conform to the
description.
(c) Any sample or model which is made part of the basis of the bargain
creates an express warranty that the whole of the goods shall conform to the
sample or model.
(2) It is not necessary to the creation of an express warranty that the seller
use formal words such as ‘‘warrant’’ or ‘‘guarantee’’ or that he have a specific
intention to make a warranty, but an affirmation merely of the value of the
goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

222

Title 33, § 2–316

SALES
Library References
Sales O259.
Westlaw Topic No. 343.
C.J.S. Sales §§ 430 to 437, 464.

§ 2–314. Implied warranty: merchantability; usage of trade
(1) Unless excluded or modified (Section 2–316), a warranty that the goods
shall be merchantable is implied in a contract for their sale if the seller is a
merchant with respect to goods of that kind. Under this section the serving for
value of food or drink to be consumed either on the premises or elsewhere is a
sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the
description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind,
quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may
require; and
(f) conform to the promises or affirmations of fact made on the container or
label if any.
(3) Unless excluded or modified (Section 2–316) other implied warranties
may arise from course of dealing or usage of trade.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O272.
Westlaw Topic No. 343.
C.J.S. Sales §§ 444 to 450.

§ 2–315. Implied warranty: fitness for particular purpose
Where the seller at the time of contracting has reason to know any particular
purpose for which the goods are required and that the buyer is relying on the
seller’s skill or judgment to select or furnish suitable goods, there is unless
excluded or modified under the next section an implied warranty that the goods
shall be fit for such purpose.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O273.
Westlaw Topic No. 343.
C.J.S. Sales §§ 453 to 456.

§ 2–316. Exclusion or modification of warranties
(1) Words or conduct relevant to the creation of an express warranty and
words or conduct tending to negate or limit warranty shall be construed
223

Title 33, § 2–316

UNIFORM COMMERCIAL CODE

wherever reasonable as consistent with each other; but, subject to the provisions of this chapter on parol or extrinsic evidence (Section 2–202) negation or
limitation is inoperative to the extent that such construction is unreasonable.
(2) Subject to subsection (3), to exclude or modify the implied warranty of
merchantability or any part of it the language must mention merchantability
and in case of a writing must be conspicuous, and to exclude or modify any
implied warranty of fitness the exclusion must be by a writing and conspicuous.
Language to exclude all implied warranties of fitness is sufficient if it states, for
example, that ‘‘There are no warranties which extend beyond the description on
the face hereof.’’
(3) Notwithstanding subsection (2)
(a) unless the circumstances indicate otherwise, all implied warranties are
excluded by expressions like ‘‘as is’’, ‘‘with all faults’’ or other language which
in common understanding calls the buyer’s attention to the exclusion of
warranties and makes plain that there is no implied warranty; and
(b) when the buyer before entering into the contract has examined the goods
or the sample or model as fully as he desired or has refused to examine the
goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and
(c) an implied warranty can also be excluded or modified by course of
dealing or course of performance or usage of trade; and
(d) the implied warranties of merchantability and fitness do not apply to the
sale or barter of livestock or its unborn young, provided that seller offers
sufficient evidence that all state and federal regulations pertaining to the health
of such animals were complied with; provided, however, that the implied
warranties of merchantability and fitness shall apply to the sale or barter of
horses.
(4) Remedies for breach of warranty can be limited in accordance with the
provisions of this chapter on liquidation or limitation of damages and on
contractual modification of remedy (Sections 2–718 and 2–719).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O260, 267.
Westlaw Topic No. 343.

C.J.S. Sales §§ 424, 430, 435 to 437, 459 to
469.

§ 2–317. Cumulation and conflict of warranties express or implied
Warranties whether express or implied shall be construed as consistent with
each other and as cumulative, but if such construction is unreasonable the
intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply:
(a) Exact or technical specifications displace an inconsistent sample or
model or general language of description.
(b) A sample from an existing bulk displaces inconsistent general language of
description.
224

Title 33, § 2–319

SALES

(c) Express warranties displace inconsistent implied warranties other than
an implied warranty of fitness for a particular purpose.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O277.
Westlaw Topic No. 343.
C.J.S. Sales §§ 424, 427 to 429, 438 to 439.

§ 2–318. Third party beneficiaries of warranties express or implied
(1) A seller’s warranty whether express or implied extends to any natural
person who is in the family or household of his buyer or who is a guest in his
home if it is reasonable to expect that such person may use, consume or be
affected by the goods and who is injured in person by breach of the warranty.
(2) This section does not displace principles of law and equity that extend a
warranty to or for the benefit of a buyer to other persons.
(3) The operation of this section may not be excluded, modified, or limited by
a seller, but an exclusion, modification, or limitation of the warranty, including
any with respect to rights and remedies, effective against the buyer is also
effective against any beneficiary designated under this section.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Contracts O187.
Sales O255, 278.
Westlaw Topic Nos. 95, 343.

C.J.S. Contracts §§ 602, 610 to 629.
C.J.S. Sales §§ 426 to 429, 439.

§ 2–319. F.O.B. and F.A.S. terms
(1) Unless otherwise agreed the term F.O.B. (which means ‘‘free on board’’)
at a named place, even though used only in connection with the stated price, is
a delivery term under which
(a) when the term is F.O.B. the place of shipment, the seller must at that
place ship the goods in the manner provided in this chapter (Section 2–504)
and bear the expense and risk of putting them into the possession of the carrier;
or
(b) when the term is F.O.B. the place of destination, the seller must at his
own expense and risk transport the goods to that place and there tender
delivery of them in the manner provided in this chapter (Section 2–503);
(c) when under either (a) or (b) the term is also F.O.B. vessel, car or other
vehicle, the seller must in addition at his own expense and risk load the goods
on board. If the term if F.O.B. vessel the buyer must name the vessel and in an
appropriate case the seller must comply with the provisions of this chapter on
the form of bill of lading (Section 2–323).
(2) Unless otherwise agreed the term F.A.S. vessel (which means ‘‘free
alongside’’) at a named port, even though used only in connection with the
stated price, is a delivery term under which the seller must
225

Title 33, § 2–319

UNIFORM COMMERCIAL CODE

(a) at his own expense and risk deliver the goods alongside the vessel in the
manner usual in that port or on a dock designated and provided by the buyer;
and
(b) obtain and tender a receipt for the goods in exchange for which the
carrier is under a duty to issue a bill of lading.
(3) Unless otherwise agreed in any case falling within subsection (1)(a) or (c)
or subsection (2) the buyer must seasonably give any needed instructions for
making delivery, including when the term is F.A.S. or F.O.B. the loading berth
of the vessel and in an appropriate case its name and sailing date. The seller
may treat the failure of needed instructions as a failure of cooperation under
this chapter (Section 2–311). He may also at his option move the goods in any
reasonable manner preparatory to delivery or shipment.
(4) Under the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer
must make payment against tender of the required documents and the seller
may not tender nor the buyer demand delivery of the goods in substitution for
the documents.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O77, 79, 83, 161, 201(4).
Westlaw Topic No. 343.

C.J.S. Sales §§ 155 to 156, 259, 275, 279 to
280, 288, 290 to 291, 404.

§ 2–320. C.I.F. and C. and F. terms
(1) The term C.I.F. means that the price includes in a lump sum the cost of
the goods and the insurance and freight to the named destination. The term C.
and F. or C.F. means that the price so includes cost and freight to the named
destination.
(2) Unless otherwise agreed and even though used only in connection with
the stated price and destination, the term C.I.F. destination or its equivalent
requires the seller at his own expense and risk to
(a) put the goods into the possession of a carrier at the port for shipment and
obtain a negotiable bill or bills of lading covering the entire transportation to
the named destination; and
(b) load the goods and obtain a receipt from the carrier (which may be
contained in the bill of lading) showing that the freight has been paid or
provided for; and
(c) obtain a policy or certificate of insurance, including any war risk insurance, of a kind and on terms then current at the port of shipment in the usual
amount, in the currency of the contract, shown to cover the same goods
covered by the bill of lading and providing for payment of loss to the order of
the buyer or for the account of whom it may concern; but the seller may add to
the price the amount of the premium for any such war risk insurance; and
(d) prepare an invoice of the goods and procure any other documents
required to effect shipment or to comply with the contract; and
(e) forward and tender with commercial promptness all the documents in
due form and with any endorsement necessary to perfect the buyer’s rights.
226

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(3) Unless otherwise agreed the term C. and F. or its equivalent has the same
effect and imposes upon the seller the same obligations and risks as a C.I.F.
term except the obligation as to insurance.
(4) Under the term C.I.F. or C. and F. unless otherwise agreed the buyer
must make payment against tender of the required documents and the seller
may not tender nor the buyer demand delivery of the goods in substitution for
the documents.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O77(2).
Westlaw Topic No. 343.
C.J.S. Sales §§ 155 to 156.

§ 2–321. C.I.F. or C. and F.
Under a contract containing a term C.I.F. or C. and F.
(1) Where the price is based on or is to be adjusted according to ‘‘net landed
weights’’, ‘‘delivered weights’’, ‘‘out turn’’ quantity or quality or the like, unless
otherwise agreed the seller must reasonably estimate the price. The payment
due on tender of the documents called for by the contract is the amount so
estimated, but after final adjustment of the price a settlement must be made
with commercial promptness.
(2) An agreement described in subsection (1) or any warranty of quality or
condition of the goods on arrival places upon the seller the risk of ordinary
deterioration, shrinkage and the like in transportation but has no effect on the
place or time of identification to the contract for sale or delivery or on the
passing of the risk of loss.
(3) Unless otherwise agreed where the contract provides for payment on or
after arrival of the goods the seller must before payment allow such preliminary
inspection as is feasible; but if the goods are lost delivery of the documents and
payment are due when the goods should have arrived.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Buyer’s right to inspection of goods, see Title 33, § 2–513.

Library References
Sales O168, 183, 201(4).
Westlaw Topic No. 343.

C.J.S. Sales §§ 236 to 237, 316 to 317, 319 to
322, 344 to 347, 349 to 351, 368, 371, 404.

§ 2–322. Delivery
(1) Unless otherwise agreed a term for delivery of goods ‘‘ex-ship’’ (which
means from the carrying vessel) or in equivalent language is not restricted to a
particular ship and requires delivery from a ship which has reached a place at
the named port of destination where goods of the kind are usually discharged.
(2) Under such a term unless otherwise agreed
(a) the seller must discharge all liens arising out of the carriage and furnish
the buyer with a direction which puts the carrier under a duty to deliver the
goods; and
227

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(b) the risk of loss does not pass to the buyer until the goods leave the ship’s
tackle or are otherwise properly unloaded.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O77(2), 83, 161, 201(4).
Westlaw Topic No. 343.

C.J.S. Sales §§ 155 to 156, 259, 275, 288, 290
to 291, 404.

§ 2–323. Form of bill of lading required in overseas shipment
(1) Where the contract contemplates overseas shipment and contains a term
C.I.F. or C. and F. or F.O.B. vessel, the seller unless otherwise agreed must
obtain a negotiable bill of lading stating that the goods have been loaded on
board or, in the case of a term C.I.F. or C. and F., received for shipment.
(2) Where in a case within subsection (1) a tangible bill of lading has been
issued in a set of parts, unless otherwise agreed if the documents are not to be
sent from abroad the buyer may demand tender of the full set; otherwise only
one part of the bill of lading need be tendered. Even if the agreement expressly
requires a full set.
(a) due tender of a single part is acceptable within the provisions of this
article on cure of improper delivery (subsection (1) of Section 2–508); and
(b) even though the full set is demanded, if the documents are sent from
abroad the person tendering an incomplete set may nevertheless require payment upon furnishing an indemnity which the buyer in good faith deems
adequate.
(3) A shipment by water or by air or a contract contemplating such shipment
is ‘‘overseas’’ insofar as by usage of trade or agreement it is subject to the
commercial, financing or shipping practices characteristic of international deep
water commerce.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Tender of documents by seller in correct form, exception, see Title 33, § 2–503.

Library References
Sales O161, 162, 201(4).
Shipping O106.
Westlaw Topic Nos. 343, 354.

C.J.S. Sales §§ 275, 288 to 291, 404.
C.J.S. Shipping §§ 256 to 265.

§ 2–324. Provisions for ‘‘no arrival, no sale’’
Under a term ‘‘no arrival, no sale’’ or terms of like meaning, unless otherwise
agreed.
(a) the seller must properly ship conforming goods and if they arrive by any
means he must tender them on arrival but he assumes no obligation that the
goods will arrive unless he has caused the nonarrival; and
(b) where without fault of the seller the goods are in part lost or have so
deteriorated as no longer to conform to the contract or arrive after the contract
228

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SALES

time, the buyer may proceed as if there had been casualty to identified goods
(Section 2–613 ).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Casualty to identified goods, see Title 33, § 2–613.

Library References
Sales O83, 150, 197, 217, 224.
Westlaw Topic No. 343.

C.J.S. Sales §§ 236 to 237, 259 to 260, 279 to
282, 382 to 383, 385 to 387, 393, 396, 403
to 404.

§ 2–325. Letter of credit
(1) Failure of the buyer seasonably to furnish an agreed letter of credit is a
breach of the contract for sale.
(2) The delivery to seller of a proper letter of credit suspends the buyer’s
obligation to pay. If the letter of credit is dishonored, the seller may on
seasonable notification to the buyer require payment directly from him.
(3) Unless otherwise agreed the term ‘‘letter of credit’’ or ‘‘banker’s credit’’
in a contract for sale means an irrevocable credit issued by a financing agency
of good repute and, where the shipment is overseas, of good international
repute. The term ‘‘confirmed credit’’ means that the credit must also carry the
direct obligation of such an agency which does business in the seller’s financial
market.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Banks and Banking O191.
Sales O191.
Westlaw Topic Nos. 52, 343.

C.J.S. Bills and Notes; Letters of Credit
§§ 377 to 415.
C.J.S. Sales § 370.

§ 2–326. Sale on approval and sale or return; consignment sales and rights
of creditors
(1) Unless otherwise agreed, if delivered goods may be returned by the buyer
even though they conform to the contract, the transaction is
(a) a ‘‘sale on approval’’ if the goods are delivered primarily for use, and
(b) a ‘‘sale or return’’ if the goods are delivered primarily for resale.
(2) Goods held on approval are not subject to the claims of the buyer’s
creditors until acceptance; goods held on sale or return are subject to such
claims while in the buyer’s possession.
(3) Any ‘‘or return’’ term of a contract for sale is to be treated as a separate
contract for sale within the statute of frauds section of this chapter (Section
2–201 of this Title) and as contradicting the sale aspect of the contract within
the provisions of this chapter on parole or extrinsic evidence (Section 2–202 of
this Title).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

229

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Library References

Factors O1, 64, 65.
Sales O8, 168.5, 204 to 206, 222.
Westlaw Topic Nos. 167, 343.
C.J.S. Agriculture §§ 198, 202 to 203.

C.J.S. Bailments § 11.
C.J.S. Factors §§ 1 to 5, 85 to 87, 91, 96.
C.J.S. Sales §§ 9, 276 to 278, 390 to 392, 395,
406.

§ 2–327. Special incidents of sale on approval and sale or return
(1) Under a sale on approval unless otherwise agreed
(a) although the goods are identified to the contract the risk of loss and the
title do not pass to the buyer until acceptance; and
(b) use of the goods consistent with the purpose of trial is not acceptance but
failure seasonably to notify the seller of election to return the goods is acceptance, and if the goods conform to the contract acceptance of any part is
acceptance of the whole; and
(c) after due notification of election to return, the return is at the seller’s risk
and expense but a merchant buyer must follow any reasonable instructions.
(2) Under a sale or return unless otherwise agreed
(a) the option to return extends to the whole or any commercial unit of the
goods while in substantially their original condition, but must be exercised
seasonably, and
(b) the return is at the buyer’s risk and expense.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Risk of loss in the absence of breach, see Title 33, § 2–509.

Library References
Sales O168.5, 204, 205.
Westlaw Topic No. 343.
C.J.S. Sales §§ 276 to 278, 390 to 391, 406.

§ 2–328. Sale by auction
(1) In a sale by auction if goods are put up in lots each lot is the subject of a
separate sale.
(2) A sale by auction is complete when the auctioneer so announces by the
fall of the hammer or in other customary manner. Where a bid is made while
the hammer is falling in acceptance of a prior bid the auctioneer may in his
discretion reopen the bidding or declare the goods sold under the bid on which
the hammer was falling.
(3) Such a sale is with reserve unless the goods are in explicit terms put up
without reserve. In an auction with reserve the auctioneer may withdraw the
goods at any time until he announces completion of the sale. In an auction
without reserve, after the auctioneer calls for bids on an article or lot, that
article or lot cannot be withdrawn unless no bid is made within a reasonable
time. In either case a bidder may retract his bid until the auctioneer’s
announcement of completion of the sale, but a bidder’s retraction does not
revive any previous bid.
230

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(4) If the auctioneer knowingly receives a bid on the seller’s behalf or the
seller makes or procures such a bid, and notice has not been given that liberty
for such bidding is reserved, the buyer may at his option avoid the sale or take
the goods at the price of the last good faith bid prior to the completion of the
sale. This subsection shall not apply to any bid at a forced sale.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Auctions and Auctioneers O7, 8.
Westlaw Topic No. 47.

C.J.S. Auctions and Auctioneers §§ 1, 12, 16
to 55.

SUBCHAPTER 4. CREDITORS, TITLE,
AND GOOD FAITH PURCHASERS
Section
2–401. Passing of title; reservation for security; limited application of this section.
2–402. Rights of seller’s creditors against sold goods.
2–403. Power to transfer; good faith purchase of goods.

§ 2–401. Passing of title; reservation for security; limited application of
this section
Each provision of this chapter with regard to the rights, obligations and
remedies of the seller, the buyer, purchasers or other third parties applies
irrespective of title to the goods except where the provision refers to such title.
Insofar as situations are not covered by the other provisions of this chapter and
matters concerning title become material the following rules apply:
(1) Title to goods cannot pass under a contract for sale prior to their
identification to the contract (Section 2–501), and unless otherwise explicitly
agreed the buyer acquires by their identification a special property as limited by
this act. Any retention or reservation by the seller of the title (property) in
goods shipped or delivered to the buyer is limited in effect to a reservation of a
security interest. Subject to these provisions and to the provisions of the
chapter on Secured Transactions (Chapter 9), title to goods passes from the
seller to the buyer in any manner and on any conditions explicitly agreed on by
the parties.
(2) Unless otherwise explicitly agreed title passes to the buyer at the time and
place at which the seller completes his performance with reference to the
physical delivery of the goods, despite any reservation of a security interest and
even though a document of title is to be delivered at a different time or place;
and in particular and despite any reservation of a security interest by the bill of
lading:
(a) if the contract requires or authorizes the seller to send the goods to the
buyer but does not require him to deliver them at destination, title passes to the
buyer at the time and place of shipment; but
(b) if the contract requires delivery at destination, title passes on tender
there.
231

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(3) Unless otherwise explicitly agreed where delivery is to be made without
moving the goods,
(a) if the seller is to deliver a tangible document of title, title passes at the
time when and the place where he delivers such documents and if the seller is
to deliver an electronic document of title, title passes when the seller delivers
the document; or
(b) if the goods are at the time of contracting already identified and no
documents are to be delivered, title passes at the time and place of contracting.
(4) A rejection or other refusal by the buyer to receive or retain the goods,
whether or not justified, or a justified revocation of acceptance revests title to
the goods in the seller. Such revesting occurs by operation of law and is not a
‘‘sale’’.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Sale defined, see Title 33, § 2–106.
Secured party defined, see Title 33, § 9–106.
Secured transactions,
Application to security interest arising under this chapter, see Title 33, § 9–121.
Scope of chapter, see Title 33, § 9–110.
Security interest perfected upon attachment, see Title 33, § 9–309.
Security interest defined, see Title 33, § 1–201.

Library References
Sales O197 to 218.5.
Westlaw Topic No. 343.

C.J.S. Sales §§ 382 to 394, 397 to 400, 403 to
408.

§ 2–402. Rights of seller’s creditors against sold goods
(1) Except as provided in subsections (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract
for sale are subject to the buyer’s rights to recover the goods under this chapter
(Sections 2–502 and 2–716).
(2) A creditor of the seller may treat a sale or an identification of goods to a
contract for sale as void if as against him a retention of possession by the seller
is fraudulent under any rule of law of the state where the goods are situated,
except that retention of possession in good faith and current course of trade by
a merchant-seller for a commercially reasonable time after a sale or identification is not fraudulent.
(3) Nothing this chapter shall be deemed to impair the rights of creditors of
the seller.
(a) under the provisions of the chapter on Secured Transactions (Chapter 9);
or
(b) where identification to the contract or delivery is made not in current
course of trade but in satisfaction of or as security for a pre-existing claim for
money, security or the like and is made under circumstances which under any
rule of law of the state where the goods are situated would apart from this
chapter constitute the transaction a fraudulent transfer or voidable preference.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

232

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Cross References

Uniform Commercial Code, applicable law provisions, see Title 33, § 1–301.

Library References
Fraudulent Conveyances O139.
Sales O230.

Westlaw Topic Nos. 186, 343.
C.J.S. Sales § 402.

§ 2–403. Power to transfer; good faith purchase of goods
(1) A purchaser of goods acquires all title which his transferor had or had
power to transfer except that a purchaser of a limited interest acquires rights
only to the extent of the interest purchased. A person with voidable title has
power to transfer a good title to a good faith purchaser for value. When goods
have been delivered under a transaction of purchase the purchaser has such
power even though
(a) the transferor was deceived as to the identity of the purchaser, or
(b) the delivery was in exchange for a check which is later dishonored, or
(c) it was agreed that the transaction was to be a ‘‘cash sale’’, or
(d) the delivery was procured through fraud punishable as larcenous under
the criminal law.
(2) Any entrusting of possession of goods to a merchant who deals in goods
of that kind gives him power to transfer all rights of the entruster to a buyer in
ordinary course of business.
(3) ‘‘Entrusting’’ includes any delivery and any acquiescence in retention of
possession regardless of any condition expressed between the parties to the
delivery or acquiescence and regardless of whether the procurement of the
entrusting or the possessor’s disposition of the goods have been such as to be
larcenous under the criminal law.
(4) The rights of other purchasers of goods and of lien creditors are governed
by the articles on Secured Transactions (Chapter 9) and Documents of Title
(Chapter 7).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Document of title to goods defeated in certain cases, see Title 33, § 7–503.
Rights acquired in absence of due negotiation, effect of diversion, see Title 33, § 7–504.
Secured transactions, secured party’s rights on disposition of collateral and in proceeds, see Title
33, § 9–315.
Seller’s right to reclaim on discovery of buyer’s insolvency, see Title 33, § 2–702.

Library References
Estoppel O75.
Sales O234.
Westlaw Topic Nos. 156, 343.

C.J.S. Estoppel and Waiver §§ 141, 143 to
145, 202.
C.J.S. Sales §§ 411 to 417, 419.

233

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SUBCHAPTER 5.

PERFORMANCE

Section
2–501. Insurable interest in goods; manner of identification of goods.
2–502. Buyer’s right to goods on seller’s insolvency.
2–503. Manner of seller’s tender of delivery.
2–504. Shipment by seller.
2–505. Seller’s shipment under reservation.
2–506. Rights of financing agency.
2–507. Effect of seller’s tender; delivery on condition.
2–508. Cure by seller of improper tender or delivery; replacement.
2–509. Risk of loss in the absence of breach.
2–510. Effect of breach on risk of loss.
2–511. Tender of payment by buyer; payment by check.
2–512. Payment by buyer before inspection.
2–513. Buyer’s right to inspection of goods.
2–514. When documents deliverable on acceptance; when on payment.
2–515. Preserving evidence of goods in dispute.

§ 2–501. Insurable interest in goods; manner of identification of goods
(1) The buyer obtains a special property and an insurable interest in goods by
identification of existing goods as goods to which the contract refers even
though the goods so identified are nonconforming and he has an option to
return or reject them. Such identification can be made at any time and in any
manner explicitly agreed to by the parties. In the absence of explicit agreement identification occurs
(a) when the contract is made if it is for the sale of goods already existing
and identified;
(b) if the contract is for the sale of future goods other than those described in
paragraph (c), when goods are shipped, marked or otherwise designated by the
seller as goods to which the contract refers;
(c) when the crops are planted or otherwise become growing crops or the
young are conceived if the contract is for the sale of unborn young to be born
within twelve (12) months after contracting or for the sale of crops to be
harvested within twelve (12) months or the next normal harvest season after
contracting whichever is longer.
(2) The seller retains an insurable interest in goods so long as title to or any
security interest in the goods remains in him and where the identification is by
the seller alone he may until default or insolvency or notification to the buyer
that the identification is final substitute other goods for those identified.
(3) Nothing in this section impairs any insurable interest recognized under
any other statute or rule of law.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Passing of title to goods, see Title 33, § 2–401.

Library References
Insurance O1779, 1790.

Sales O208.

234

Title 33, § 2–503

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Westlaw Topic Nos. 217, 343.
C.J.S. Insurance §§ 317 to 321, 324 to 346,
379 to 386.

C.J.S. Sales §§ 397 to 400.

§ 2–502. Buyer’s right to goods on seller’s insolvency
(1) Subject to paragraphs (2) and (3) of this section and even though the
goods have not been shipped a buyer who has paid a part or all of the price of
goods in which the buyer has a special property under the provisions of Section
2–501 of this Title may on making and keeping good a tender of any unpaid
portion of their price recover them from the seller if:
(a) in the case of goods bought for personal, family, or household purposes,
the seller repudiates or fails to deliver as required by the contract; or
(b) in all cases, the seller becomes insolvent within ten (10) days after receipt
of the first installment on their price.
(2) The buyer’s right to recover the goods under subparagraph (a) of paragraph (1) vests upon acquisition of a special property, even if the seller had not
then repudiated or failed to deliver.
(3) If the identification creating his special property has been made by the
buyer he acquires the right to recover the goods only if they conform to the
contract for sale.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Buyer’s remedies, security interest in rejected goods, see Title 33, § 2–711.
Rights of seller’s creditors against sold goods, see Title 33, § 2–402.

Library References
Sales O399.
Westlaw Topic No. 343.
C.J.S. Sales §§ 586, 594.

§ 2–503. Manner of seller’s tender of delivery
(1) Tender of delivery requires that the seller put and hold conforming goods
at the buyer’s disposition and give the buyer any notification reasonably
necessary to enable him to take delivery. The manner, time and place for
tender are determined by the agreement and this chapter, and in particular:
(a) tender must be at a reasonable hour, and if it is of goods they must be
kept available for the period reasonably necessary to enable the buyer to take
possession; but
(b) unless otherwise agreed the buyer must furnish facilities reasonably
suited to the receipt of the goods.
(2) Where the case is within the next section respecting shipment tender
requires that the seller comply with its provisions.
(3) Where the seller is required to deliver at a particular destination tender
requires that he comply with subsection (1) and also in any appropriate case
tender documents as described in subsections (4) and (5) of this section.
235

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(4) Where goods are in the possession of a bailee and are to be delivered
without being moved.
(a) tender requires that the seller either tender a negotiable document of title
covering such goods or procure acknowledgment by the bailee of the buyer’s
right to possession of the goods; but
(b) tender to the buyer of a nonnegotiable document of title or of a written
direction to the bailee to deliver is sufficient tender unless the buyer seasonably
objects, and receipt by the bailee of notification of the buyer’s rights fixes those
rights as against the bailee and all third persons; but risk of loss of the goods
and of any failure by the bailee to honor the nonnegotiable document of title or
to obey the direction remains on the seller until the buyer has had a reasonable
time to present the document or direction, and a refusal by the bailee to honor
the document or to obey the direction defeats the tender.
(5) Where the contract requires the seller to deliver documents
(a) he must tender all such documents in correct form, except as provided in
this chapter with respect to bills of lading in a set (subsection (2) of Section
2–323); and
(b) tender through customary banking channels is sufficient and dishonor of
a draft accompanying or associated with the documents constitutes nonacceptance or rejection.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
F.O.B. and F.A.S. terms, see Title 33, § 2–319.

Library References
Sales O153.
Westlaw Topic No. 343.
C.J.S. Sales §§ 263 to 275, 308 to 311.

§ 2–504. Shipment by seller
Where the seller is required or authorized to send the goods to the buyer and
the contract does not require him to deliver them at a particular destination,
then unless otherwise agreed he must,
(a) put the goods in the possession of such a carrier and make such a
contract for their transportation as may be reasonable having regard to the
nature of the goods and other circumstances of the case; and
(b) obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the goods or otherwise required
by the agreement or by usage of trade; and
(c) promptly notify the buyer of the shipment. Failure to notify the buyer
under paragraph (d) or to make a proper contract under paragraph (a) is a
ground for rejection only if material delay or loss ensues.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]

236

Title 33, § 2–506

SALES
Cross References
F.O.B. and F.A.S. terms, see Title 33, § 2–319.

Library References
Sales O83, 161.
Westlaw Topic No. 343.
C.J.S. Sales §§ 259, 275, 288, 290 to 291.

§ 2–505. Seller’s shipment under reservation
(1) Where the seller has identified goods to the contract by or before
shipment:
(a) his procurement of a negotiable bill of lading to his own order or
otherwise reserves in him a security interest in the goods. His procurement of
the bill to the order of a financing agency or of the buyer indicates in addition
only the seller’s expectation of transferring that interest to the person named.
(b) a nonnegotiable bill of lading to himself or his nominee reserves possession of the goods as security but except in a case of conditional delivery
(subsection (2) of Section 2–507) a nonnegotiable bill of lading naming the
buyer as consignee reserves no security interest even though the seller retains
possession or control of the bill of lading.
(2) When shipment by the seller with reservation of a security interest is in
violation of the contract for sale it constitutes an improper contract for
transportation within the preceding section but impairs neither the rights given
to the buyer by shipment and identification of the goods to the contract nor the
seller’s powers as a holder of a negotiable document of title
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Secured party defined, see Title 33, § 9–106.
Secured transactions,
Application to security interests arising under this chapter, see Title 33, § 9–121.
Scope of chapter, see Title 33, § 9–110.
Security interest defined, see Title 33, § 1–201.
Security interest perfected upon attachment, see Title 33, § 9–309.

Library References
Carriers O54.1 to 59.
Sales O300, 316.
Shipping O106(3).
Westlaw Topic Nos. 70, 343, 354.

C.J.S. Carriers §§ 375 to 378, 384 to 390.
C.J.S. Sales §§ 536 to 538, 540, 549 to 554.
C.J.S. Shipping §§ 256 to 257, 260 to 265.

§ 2–506. Rights of financing agency
(1) A financing agency by paying or purchasing for value a draft which
relates to a shipment of goods acquires to the extent of the payment or
purchase and in addition to its own rights under the draft and any document of
title securing it any rights of the shipper in the goods including the right to stop
delivery and the shipper’s right to have the draft honored by the buyer.
(2) The right to reimbursement of a financing agency which has in good faith
honored or purchased the draft under commitment to or authority from the
237

Title 33, § 2–506

UNIFORM COMMERCIAL CODE

buyer is not impaired by subsequent discovery of defects with reference to any
relevant document which was apparently regular.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O292, 309.
Westlaw Topic No. 343.
C.J.S. Sales §§ 540, 544.

§ 2–507. Effect of seller’s tender; delivery on condition
(1) Tender of delivery is a condition to the buyer’s duty to accept the goods
and, unless otherwise agreed, to his duty to pay for them. Tender entitles the
seller to acceptance of the goods and to payment according to the contract.
(2) Where payment is due and demanded on the delivery to the buyer of
goods or documents of title, his right as against the seller to retain or dispose of
them is conditional upon his making the payment due.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O153.
Westlaw Topic No. 343.
C.J.S. Sales §§ 263 to 275, 308 to 311.

§ 2–508. Cure by seller of improper tender or delivery; replacement
(1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may
seasonably notify the buyer of his intention to cure and may then within the
contract time make a conforming delivery.
(2) Where the buyer rejects a nonconforming tender which the seller had
reasonable grounds to believe would be acceptable with or without money
allowance the seller may if he seasonably notifies the buyer have a further
reasonable time to substitute a conforming tender.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Cross References
Form of bill of lading required in overseas shipment, due tender, see Title 33, § 2–323.

Library References
Sales O153, 165.
Westlaw Topic No. 343.

C.J.S. Sales §§ 263 to 275, 293 to 296, 308 to
311.

§ 2–509. Risk of loss in the absence of breach
(1) Where the contract requires or authorizes the seller to ship the goods by
carrier:
(a) if it does not require him to deliver them at a particular destination, the
risk of loss passes to the buyer when the goods are duly delivered to the carrier
even though the shipment is under reservation (Section 2–505); but
(b) if it does require him to deliver them at a particular destination and the
goods are there duly tendered while in the possession of the carrier, the risk of
238

Title 33, § 2–511

SALES

loss passes to the buyer when the goods are there duly so tendered as to enable
the buyer to take delivery.
(2) Where the goods are held by a bailee to be delivered without being
moved, the risk of loss passes to the buyer:
(a) on his receipt of a negotiable document of title covering the goods; or
(b) on acknowledgment by the bailee of the buyer’s right to possession of the
goods; or
(c) after his receipt of possession or control of a nonnegotiable document of
title or other direction to deliver in a record, as provided in subsection (4)(b) of
Section 2–503.
(3) In any case not within subsection (1) or (2), the risk of loss passes to the
buyer on his receipt of the goods if the seller is a merchant; otherwise the risk
passes to the buyer on tender of delivery.
(4) The provisions of this section are subject to contrary agreement of the
parties and to the provisions of this chapter on sale on approval (Section 2–327)
and on effect of breach on risk of loss (Section 2–510).
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O197, 201(4), 217, 224, 232.
Westlaw Topic No. 343.

C.J.S. Sales §§ 382 to 383, 385 to 387, 393,
396, 403 to 404.

§ 2–510. Effect of breach on risk of loss
(1) Where a tender or delivery of goods so fails to conform to the contract as
to give a right of rejection the risk of their loss remains on the seller until cure
or acceptance.
(2) Where the buyer rightfully revokes acceptance he may to the extent of any
deficiency in his effective insurance coverage treat the risk of loss as having
rested on the seller from the beginning.
(3) Where the buyer as to conforming goods already identified to the contract
for sale repudiates or is otherwise in breach before risk of their loss has passed
to him, the seller may to the extent of any deficiency in his effective insurance
coverage treat the risk of loss as resting on the buyer for a commercially
reasonable time.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O197, 217, 224, 232.
Westlaw Topic No. 343.

C.J.S. Sales §§ 382 to 383, 385 to 387, 393,
396, 403 to 404.

§ 2–511. Tender of payment by buyer; payment by check
(1) Unless otherwise agreed tender of payment is a condition to the seller’s
duty to tender and complete any delivery.
(2) Tender of payment is sufficient when made by any means or in any
manner current in the ordinary course of business unless the seller demands
payment in legal tender and gives any extension of time reasonably necessary to
procure it.
239

Title 33, § 2–511

UNIFORM COMMERCIAL CODE

(3) Subject to the provisions of this act on the effect of an instrument on an
obligation (Section 3–310), payment by check is conditional and is defeated as
between the parties by dishonor of the check on due presentment.
[Added by NCA 07–107, § 3, eff. May 3, 2007.]
Library References
Sales O185, 191.
Westlaw Topic No. 343.
C.J.S. Sales § 370.

§ 2–512. Payment by buyer before inspection
(1) Where the contract requires payment before ins

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/tribal%3Amuscogee_creek_nation%3A48133ce140a82218. Public record. Not legal advice.