Sales law refers to the body of laws and regulations governing the sale of goods and services. Every state has adopted at least part of Article Two of the Uniform Commercial Code (UCC) as the primary body of law regulating transactions of goods. Goods are defined under the UCC as all things movable and identified to the contract of the sale. See § 2-105 of the UCC. This definition excludes secured transactions, leases, money exchanged as the price, or real property (land and property permanently attached to a piece of land). See also: Secured Transactions.
To be identified to the contract, a good must exist and be one of the objects that is or will be exchanged. See §§ 2-106(1) & 2-501(1) of the UCC. Transactions between merchants and consumers, as well as those solely between merchants, are regulated by Part Two of the UCC. All transactions involving goods valued at more than $500 must be in writing. See § 2-201(1) of the UCC.
Article 2 of the UCC regulates every phase of a transaction for the sale of goods and provides remedies for problems that may arise. Possible remedies include claims for implied warranty of merchantability and implied warranty of fitness. See §§ 2-314 - 2-315 of the UCC. There is also a duty of good faith in the UCC that is applicable to all the sections. See § 1-203 of the UCC. If a contract contains unconscionable provisions, a court may discard the contract or the specific provisions deemed unconscionable. See § 2-302 of the UCC.
Leases were traditionally governed by Article 2 or Article 9 (secured transactions) of the UCC, leading to confusion and inconsistent application of the law. To address this, Article 2A was added to the UCC in 1987 to specifically regulate leases of goods.
While federal law generally has limited impact on transactions for the sale of goods, there are notable exceptions. The Bankruptcy Code (Title 11) regulates claims arising from sales transactions in bankruptcy cases. The Magnuson-Moss Warranty Act (15 U.S.C. § 2301) governs express and implied warranties for consumer products. Furthermore, the Consumer Credit Protection Act provides protection to consumers entering into leases (See 15 U.S.C. § 1667).
In 1988, the United States joined the United Nations Convention on Contracts for the International Sale of Goods (CISG). The CISG provides a uniform framework for international sales contracts, aiming to facilitate cross-border trade by establishing consistent legal standards.
- Uniform Commercial Code - Article 2
- Magnuson - Moss Warranty Act, 15 U.S.C. § 2301 et seq.
- Consumer Credit Protection Act, 15 U.S.C. § 1667 et seq.
[Last updated in June of 2024 by the Wex Definitions Team]