Common Law Contracts Vs. UCC Contracts

By Andrine Redsteer - Updated June 21, 2017
Two business teams signing contracts

Common law contracts and Uniform Commercial Code (UCC) contracts share much of the same requirements regarding formation. Under the common law and the UCC, valid formation for a contract requires an offeror, acceptance by an offeree and a benefit received by a promisor or a detriment incurred by a promisee, also known as consideration. However, the UCC treats other contract issues differently.

Application

Common law rules apply to contracts involving real estate, services or intangibles. Services include construction work, professional work and personal services. Real estate includes contracts for the purchase or sale of land. Intangibles include patents, software, copyrights and trademarks. The UCC applies to contracts for the sale of movable goods, whether new or used. Goods include timber, minerals or crops. The UCC typically applies to contracts for the shipment and receipt of goods between merchants.

Mirror Image Rule

Although the common law and the UCC have many of the same requirements for formation of a contract, the common law is more rigid regarding the terms of acceptance. The common law applies the mirror image rule, meaning that if the person receiving the offer, referred to as the offeree, changes the terms of an offer in an acceptance, the acceptance is considered a counter offer. The UCC, however, rejects the mirror image rule. The UCC allows acceptance along with consistent additional terms.

Mailbox Rule

The common law mailbox rule applies where parties to a contract communicate from afar. The rule allows acceptance upon dispatch as long as the offeree conveys his acceptance by the same or faster means used by the person making the offer, referred to as the offerror. The UCC acknowledges the mailbox rule, but relaxes the common law's treatment by requiring that acceptance need only be made in a reasonable manner by a reasonable medium. Therefore, under the UCC, acceptance may be slower than an offer.

UCC Gap Filling

The UCC provides gap filling provisions in which parties leave a gap in the contract. Where a common law contract would fail for indefiniteness, the UCC will find a contract enforceable even if it omits price, place of delivery and time for shipment. For example, if the place of delivery is omitted, the UCC provides the place of delivery as the seller's usual place of business. If a contract omits the time and place of payment, the UCC states that payment is due at the time and place where a buyer is to receive the goods.

About the Author

Andrine Redsteer's writing on tribal gaming has been published in "The Guardian" and she continues to write about reservation economic development. Redsteer holds a Bachelor of Arts in history from the University of Washington, a Master of Arts in Native American studies from Montana State University and a Juris Doctor from Seattle University School of Law.

Cite this Article A tool to create a citation to reference this article Cite this Article