If you are a contractor, subcontractor or supplier in the construction industry, you may have encountered the term UCC or Uniform Commercial Code. But, what is the UCC and how does it relate to construction law in Florida?
Uniform Commercial Code
In Florida, the UCC is codified in Chapter 672 to 680 of the Florida Statutes. The UCC is a set of laws that govern commercial transactions involving the sale of goods. The UCC consists of 9 articles that cover various aspects of commercial transactions.
How does the UCC apply to construction contracts?
Therefore, the question arises whether the UCC applies to construction contracts. The answer depends on the predominant factor test, which determines whether the goods or the services element of the contract is the main purpose of the agreement. Generally, most construction contracts are considered service contracts that are governed by the common law rather than by the UCC. This is because the services component usually outweighs the goods component.
However, there may be some situations where the UCC applies to construction contracts. For instance, if a contractor purchases materials from a supplier without any installation or other services involved, then the contract would be considered a sale of goods subject to the UCC.
What are some implications of the UCC for construction disputes?
The application of the UCC or the common law to construction contracts can have important consequences for construction disputes. The UCC imposes implied warranties of merchantability and fitness for a particular purpose on sellers of goods that may not exist under the common law. These warranties guarantee that the goods sold are of acceptable quality and suitable for their intended use. If these warranties are breached, buyers may have remedies such as rejection, revocation, damages or specific performance.
The UCC allows parties to modify or waive certain terms or provisions by agreement or by course of dealing or usage of trade. This means that parties may alter their rights and obligations based on their past practices or industry standards without explicitly stating them in their contract.
The UCC provides different rules for measuring damages for breach of contract depending on whether the breach involves non-delivery, late delivery, defective delivery or non-conforming goods.
The UCC adopts a more flexible standard for determining whether a contract has been breached than the common law. Under the UCC, a seller must deliver goods that conform exactly to the contract specifications (the perfect tender rule), unless otherwise agreed by the parties. Under common law, a contractor must perform substantially in accordance with the contract terms (the substantial performance rule), unless there is a material breach.