Symposium: The Uniform Commercial Code Proposed Article 2B

Article 2B: An Introduction


Raymond T. Nimmer


VOL. XVI • Winter 1998 • NO. 2 (table of contents)

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16 John Marshall J. of Comp. & Info. Law 211


The United States was once the major producer of goods in the world. Today, the United States is the major consumer of goods. In addition, the United States is now the major developer and distributor of information such as software, content, news and entertainment. As a result of this new emphasis in information and services in the United States, Article 2B of the U.C.C. deals with transactions and subject matter that have never been covered by a U.C.C.

There are many issues reflecting modern commerce. It is important for everyone to understand why an economy and commerce based on information differs fundamentally from one whose features were etched in the economics of the 1950's and 1960's when the production and distribution of goods was at the core of the economy. There is a relationship between the economic shift and the nature and importance of contract and contract law. Article 2B provides a framework document for this new commerce.

Therefore, a conflict exists between two views of contract law. The conflict involves a debate between a philosophy of regulation and a philosophy of contract autonomy. It is necessary for a commercial code to emphasize contract choice or autonomy.

Similar to the blacksmith in the industrial era, many occupations of the industrial era will disappear in the information era. Contract law cannot alter that fact. An information economy rewards entirely different activities, creates different risks and involves an entirely different set of critical actors than a goods economy. It requires different contract law concepts.

Article 2B follows the fundamental philosophy of the U.C.C. and emphasizes the right of parties to set their own contractual course. Article 2B supports the idea of contract freedom and adopts this idea as a basic principle. The concept of contractual freedom simply assumes that parties can better define and adopt or reject contract terms for their context than a statute.

There are different types of contracts covered by Article 2B, particularly the new "mass market" contract and license contracts. Under Article 2B, the paradigm contract is a license. Licensing is a dominant means of commerce in digital information and in commercial information transactions. Although licensing contract law has long been used in information transactions, Article 2B seeks to provide a coherent framework for contract issues.

Article 2B follows the traditions of Article 2 and adapts those traditions to the different subject matter, transactional themes and commercial demands of an information economy. There are four different contexts that help see some of those themes: electronic commerce issues; general license issues; informational content as a subject matter; and the "mass market paradigm."

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