MOVA LOGOSources of Contract Law:

Common Law – namely, judicial decisions that have been handed down over the last century by courts faced with similar situations. The findings of the courts in the past helps to determine the outcome of later disputes. It does not mean that the courts must follow earlier precedent, but at least, it will be taken into consideration when deciding a similar case, as general principles can be inferred from earlier decisions. Therefore, it can help to anticipate how a court might decide a particular case.

Restatement II on Contracts – A treatise compiled by the American Law Institute. It contains the general principles of contract common law. It is undoubtedly one of the most frequently cited legal treatises. Even though it is non-binding authority, it is widely respected and commonly relied on by the courts.

Uniform Commercial Code (“UCC”) – promulgated by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. The Code deals with a variety of commercial subjects, such as Bank Deposits and Collections, Negotiable Instruments and Letters of Credit, and Security Interests. Article 2 governs transactions in the Sale of Goods. Article 2 has been enacted in every state of the United States with the exception of Louisiana (heavily influenced by the civil-law model). Moreover, courts frequently apply the underlying principles of article 2 to other areas, such as real estate (for example duty of «good faith» and prohibition of «unconscionability»).

It should be noted, however, that the UCC does address the entire subject of contract law.  Therefore, when no provision of the Code applies to a particular case, it will be necessary to resort to the general body of contract law principles.

The United Nations Convention on Contracts for the International Sale of Goods (“Vienna Convention”) – A uniform text governing international sales transactions. Therefore, it applies to contracts for the sale of goods between parties whose places of business are in different countries, at least if both such nations have ratified the Convention.