Overview of Commercial Law

Overview of Commercial Law
Designed for quick reference and easy study

1. Definition & Scope

2. Core Principles

1. Freedom of Contract – Parties may freely negotiate terms, subject to legal limits (e.g., public policy, fraud).
2. Good Faith & Fair Dealing – Parties must act honestly and not undermine the contract’s purpose.
3. Reliance & Expectation – Protects parties who rely on contractual promises.
4. Uniformity – Use of model statutes (UCC, CISG) to harmonize rules across jurisdictions.
5. Risk Allocation – Determines who bears loss when unforeseen events occur (e.g., force‑majeure, risk of loss clauses).

3. Major Legal Frameworks (U.S. Focus)

4. Key Topics Explained

4.1 Contracts

• Elements: Offer, acceptance, consideration, capacity, legality.
• Types:
  • Bilateral – Mutual promises.
  • Unilateral – Promise for performance.
  • Executed vs. executory – Completed vs. pending obligations.
• Remedies:
  • Damages (compensatory, consequential, liquidated).
  • Specific performance.
  • Rescission & restitution.

4.2 Sale of Goods (UCC §2)

• Scope: Goods that are movable at the time of identification to the contract.
• Warranties:
  • Express – Explicit promises.
  • Implied – Merchantability, fitness for a particular purpose.
• Risk of Loss: Determined by delivery terms (FOB, CIF, etc.) and contract language.

4.3 Secured Transactions (UCC §9)

• Purpose: Provide lenders a security interest in the debtor’s collateral.
• Steps:
  1. Attachment – Agreement, value, and rights in collateral.
  2. Perfection – Usually filing a