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The Uniform Commercial Code (UCC)

When Does the UCC Apply?

If the contract concerns a sale of goods (i.e., items that are movable) in a commercial setting, the New Mexico Uniform Commercial Code (UCC) must be applied. The New Mexico UCC can be found at NMSA §§55-1-101 through -725. Generally, the UCC applies to sales of goods that involve a merchant. The following examples illustrate when the UCC applies to a contract for the sale of goods.

Situation Does the UCC apply?
A fruit store buys apples from an apple dealer. Yes
Jesse buys a radio from an electronics store. Yes
A rug dealer buys some rugs from a weaver who is not a business person. Yes
Bob contracts to buy 50 CDs from Layla’s garage sale. No
Jim contracts to buy Marsha’s mountain cabin. No

In some instances the UCC approach to contracts for the sale of goods differs from the treatment of contracts that are not for the sale of goods. For example, the requirements for modifying a contract are different under the UCC than otherwise (see below), and the statute of limitations for contracts for the sale of goods is shorter than the statute for other contracts (see discussion above concerning the elements of a contract).

How Can a Contract Be Modified?

Parties to a contract may wish to modify or change the terms of their contract at some point. The requirements for modifying a contract differ depending on whether the contract involves the sale of goods to or by a merchant.

The UCC applies to contracts for the sale of goods to or by a merchant. Under the UCC, additional consideration is not necessary to modify a written contract, as long as the modification is entered into in good faith.

If the contract is not for the sale of goods to or by a merchant, then additional consideration is necessary to modify the terms of the contract. For example, Marge has contracted to sell her car to Paul. They both want to change some of the terms of the contract. Because the UCC does not apply to the sale of a car between private parties, some new consideration must be exchanged before the contract can be modified.