Uniform Commercial Code is a comprehensive set of laws governing commercial transactions within the US. Enables organizations to conduct business across state or other jurisdictional boundaries with the assurance that the same rules apply.
-must be adopted by each state separately
Article 2 of UCC governs...
contracts for the sale of any kind of "goods" between 2 US corporations.
Article 2 contains three requirements of the written contract:
- 1. it must provide evidence that there was a contract for the sale of goods
- 2. it must be signed by the party to be charged
- 3. it must specify a quantity
The Sarbanes-Oxley Act (SOX)
prevents companies from accounting for profits not realized in an effort to portray value where none exists.
Government Contract Law
- Government has the implied power to use/enter contracts to fulfill its responsibilities. it involves all 3 branches.
- Congress (legislative) - enacts laws that impact contracting process & provides funding;
- The agencies (executive) - draft regulations implementing the laws, solicit offers, award & administer contracts;
- Federal courts (judicial) - interpret legislation & resolve disputes;
FAR is the principal guide for federal government contracting and it stands for
Federal Acquistion Regulation
CFR stands for
Code of Federal Regulations
Contract is a
promise or a set of promises (for the breach of which law provides a remedy) or a performance that law recognizes as a duty.
In order for a contract to be valid, it must contain these essential elements:
- a) demonstration of mutual agreement through an offer & acceptance
- b) consideration (something of value, money or acts to be done or not done that changes hands between the parties)
- c) legal purpose (a contract for an illegal ac is not valid)
- d) capacity of the parties (parties must have legal capacity to enter into a contract)
is one in which the terms of the contract are stated in words, either written or spoken.
Contract principles are divided into 2 sections:
- 1. general concepts
- 2. specific contract clauses
General concepts include:
- 1. principal and agency
- 2. types of authority
- 3. essential elements of a contract
- 4. market research & competition
- 5. fair & reasonable prices
- 6. ethics
Specific contract clauses:
- 1. inspection & acceptance
- 2. force majeure
- 3. risk of loss
- 4. repudiation
- 5. warranties
- 6. termination
Principal & agency definition
- Principal - the authority granting party
- Agent - party who receives authority from the principal to act on their behalf
Types of authority are:
- a) actual (P intentionally confers authority to agent to affect legal relations)
- b) express (plainly granted either verbally or in writing)
- c) implied (not actually expressed or otherwise communicated)
- d) apparent (the appearance of being P's agent, i.e. corporation is liable for an employee's acts)
Market research is used to...
...collect & analyze data to maximize competitive forces of the marketplace to meet an organizations's need for supplies and services.
Inspection & acceptance definition
- Inspection - examining supplies and services to determine if they meet contract's requirements.
- acceptance - buyer signifies that goods are satisfactory or fails to reject the delivery.
an unexpected, uncontrollable event, an act of God
Risk of loss
Contracting parties should establish in advance who bears the risk of loss under certain circumstances.
Repudiation occurs when...
...party A gives other contracting party (B) reason to believe that they (party A) will not perform the contract through and action or statement.
- Under UCC, every sale of goods gives rise to certain implied warranties including:
- a) implied warranty of merchantability (merchant warrants that goods are reasonably fit for the purpose for which they are sold)
- b) implied warranty of fitness for a particular purpose
Standards of conduct refer to...
...the ethical conduct of personnel involved in the purchase or sale of goods & services.
A typical code of conduct would include the following elements:
- a) written document that presents standards of conduct
- b) an ethic compliance officer to monitor and enforce the written document above
- c) formal training for employees
- d) complaint system to receive, investigate and respond to issues of non-ethical behavior