Article 2 of the UCC and non-merchants

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Latest post 03-15-2010 1:46 PM by Taxagent. 6 replies.
  • 03-14-2010 10:28 PM

    • Brenda-D
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    Article 2 of the UCC and non-merchants

    Hi, I'm new to this board. Not sure if I am posting in the right spot, but I have to start somewhere, right? Ok

    I am school for a paralegal certificate and I am currently studying Article 2 of the UCC. My question is this: Does Article 2 of the UCC apply to a contract for sale of goods between two non-merchants?

    I have been researching this online for about an hour now. All information I find states a merchant is held to a higher standard that a non-merchant, but does that mean the UCC applies when both parties are non-merchants? Nobody outright answers the question.

    Thanks,

    Brenda

  • 03-15-2010 12:25 AM In reply to

    Re: Article 2 of the UCC and non-merchants

    Brenda-D:
    Hi, I'm new to this board.

    Welcome.

    Brenda-D:
    Not sure if I am posting in the right spot, but I have to start somewhere, right?
     

    This is as good a place as any. And we all read all the boards anyway.

    Brenda-D:
    does that mean the UCC applies when both parties are non-merchants?

    I'm posting the link to the UCC so I can refer to it later.

    https://www.revisor.mn...

    Your going to have to define what you mean by "both parties are non-merchants" and give examples of transactions that you have in mind.

    All or part of the UCC might apply to certain transactions depending on the circumstances. You can't make a general statement as to whether it does or doesn't apply when both parties are non-merchants, because not only might it apply or might not apply but there could be other statutes or even common law that applies to certain transactions depending on who's involved and what the circumstances are. And those statutes could overlap or leave holes.

     

     

     

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 03-15-2010 12:44 AM In reply to

    Re: Article 2 of the UCC and non-merchants

    Brenda-D:
    Does Article 2 of the UCC apply to a contract for sale of goods between two non-merchants?

    Much of it applies to transactions that do not involve merchants, though some of the rules in the UCC are specific to merchant transactions.

  • 03-15-2010 12:17 PM In reply to

    • Brenda-D
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    Re: Article 2 of the UCC and non-merchants

    Perhaps my lack of specificity has been the reason I have not found an answer to this question Ok

    I am looking at a scenario in which an individual has posted an ad in a newspaper for a [car] with 20,000 miles. Another individual agrees to purchase the [car]. Shortly thereafter, the buyer discovers the odometer has been rolled back 10,000 miles. The tampering did not occur with the seller, but from the previous owner.

    The question I am expected to answer is whether or not the UCC warranties and rememdies applies to this scenario. If I had to guess, I would say yes, the UCC does apply; however, these two individuals are not held to the same set of standards, since they are not merchants.

    Thoughts?

  • 03-15-2010 12:37 PM In reply to

    Re: Article 2 of the UCC and non-merchants

    That's an ideal example as to why your question is so complicated.

    Used car sales between private parties are presumed to be AS IS unless there are specific statutes addressing the sale of used cars between private parties.

    I do not believe that there is anything specific in the UCC about used car sales between private parties.

    So then you have to look elsewhere.

    And the elsewhere in your example would be the federal (and possibly state) odometer statutes which make tampering with the odometer a crime.

    Unfortunately, in your example, the seller didn't do it so the buyer has no recourse against the seller. The best that the buyer can do is is report the tampering to the authorities and hope that the "who did it" can be proven so that the culprit can be charged with a crime. But that still doesn't help the buyer. He's still stuck with the car. He very likely doesn't have any civil recourse against the culprit because he didn't buy the car from the culprit (privity of contract).

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 03-15-2010 1:06 PM In reply to

    • Drew
      Consumer
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    • Joined on 03-30-2000
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    • Posts 49,086

    Re: Article 2 of the UCC and non-merchants

    I don't see it as a UCC issue--but there are separate Federal laws as to odometer tampering .  And there may be state laws as well:

    And buyer may have a triple damages claim against seller.

    Of course the buyer is somewaht stuck with a car with altered miles!

     

    BUT I'm not so sure that there is not recourse against the seller IF you can prove seller knew about altered mileage----to pass a knowingly incorrect docuement and or to sign a knowingly incorrect docuement as to mileage may trigger  a host of potential issues  --read the law and see the forms themselves.

    For  Sam to roll back miles on late model cars and wash titles thru say Guido in next state and Guido resells them --does NOT mean Guido is off the hook IF knowledge or link can be established---and there may be two different levels of problems.

    1. Sam and Guido are in some active conspiracy.......

    2. Guido is not part of any conspiracy but upon getting actual prior title his is on notice as to correct miles and knows of miles issue and he unloads car and inserts miles on title form he knows to be wrong.



  • 03-15-2010 1:46 PM In reply to

    Re: Article 2 of the UCC and non-merchants

    Brenda-D:
    I am looking at a scenario in which an individual has posted an ad in a newspaper for a [car] with 20,000 miles. Another individual agrees to purchase the [car].  Shortly thereafter, the buyer discovers the odometer has been rolled back 10,000 miles. The tampering did not occur with the seller, but from the previous owner. The question I am expected to answer is whether or not the UCC warranties and rememdies applies to this scenario. If I had to guess, I would say yes, the UCC does apply; however, these two individuals are not held to the same set of standards, since they are not merchants.

    The warranty provisions of the UCC are found in sections 2-312 through 2-318. Read them and you will see most of them apply to all parties in a contract for the sales of goods (which I will simply refer to as contracts for the rest of my post).You can tell that because it the provision is limited to only merchants, the provision expressly says so.

    Section 2-312 is the warranty of title. All but subsection (3) applies to all contracts. Subsection (3) deals with transactions in which the seller is a merchant. This warranty doesn't help the buyer in your situation as there is no issue about good title to the car.

    Section 2-313 describes how express warranties are created. It applies to all contracts. But since your situation does not involve any express warranties, this provision does not help the buyer.

    Section 2-314 is the implied warranty of merchantability. It applies only if the seller is a merchant of the kind of goods being sold, i.e. a used car dealer in your case. Thus, it will not help your buyer here. Even if the seller was a merchant, it's not clear that this problem would fall under the warranty of merchantability.

    Section 2-315 is the implied warranty of fitness for a particular purpose. It applies to all contracts. However, this warranty does not help your buyer as the issue here is not that the seller implied the car would be good for some particular use that the buyer had in mind.

    Section 2-316 describes how warranties may be disclaimed. It applies to all contracts. But nothing in your post indicates that the seller made any disclaimers, so this won't apply here.

    Section 2-317 is a provision that in generally stacks two or more warranties where they exist. It applies to all contracts. But it isn't a substantive provision; it is simply a provision that states how to interpret the contact where two or more warranties exist. As a result, it does not provide the buyer relief here.

    Section 2-318 extends warranties to certain third parties who are not parties to the contract. It applies to all contracts. There are three possible versions of this provision, and some states have elected not to adopt it at all. Even if the relevant state here has adopted this provision, it does not apply here since there is no third party making a claim against the seller in this transaction.

    Thus, most of the UCC warranty provisions would apply to this contract. However, none of them that do apply would seem to address the particular problem that the buyer faces here of the altered odometer. State fraud laws would apply if the seller knew that the odometer was altered but nevertheless presented the car's mileage as accurate. If the seller had no knowledge of the altered odometer (e.g. he himself got taken by a seller who altered the odometer) then the buyer might not have any remedy against his seller and may have to proceed against the person that actually altered the odometer,

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