Uniform Commercial Code “UCC” Contracts vs. Common Law Contracts

Overview of UCC Contracts and Common Law Contracts

Contracts law principles in general are uniformly understood and applied across the United States. Contract law is governed by the common law and the Uniform Commercial Code "UCC."

Common law governs contractual transactions with real estate, services, insurance, intangible assets and employment. UCC governs contractual transactions with goods and tangible objects (such as a purchase of a car).

The Common Law and UCC have their distinct differences and it is vital to know and understand them if you are in a position where you contractually transact often.

The following are some important aspects of the common law and UCC. This is by far not an exhaustive list of information about each code of law – but a great educational start! It is highly advised that you see a licensed Attorney if you have any specific questions regarding contracts that you are unsure of or cannot make sense of.

Acceptance of an Offer With Different Terms

The common law dictates that any change to an offer is a rejection and counter offer (this creates a new offer and changes the person who was initially the offeree to the offeror). A change to an offer with UCC may still form a binding contract depending on the circumstances surrounding the transaction and the substance of the differing term (whether it was a major deviation or a minor one).

Contract Modification

Modification of contracts with the common law requires consideration, unlike the UCC, where consideration is not a prerequisite.

Promise to Keep an Offer Open

A promise to keep a deal open is an option contract with the common law and requires consideration. UCC calls this a firm offer and requires writing. The UCC also requires that the offer be made by a merchant as opposed to just having consideration to support the offer.

Time to Sue (Statute of Limitations)

The time to sue on a contract varies by state and is usually different for oral vs. written contracts.


The common law requires a description on the quantity, price, performance time, nature of work and identity of an offer to be part of a valid contract. UCC only specifies that quantity is a must have term in its contracts.

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