Understanding Legal Terminology Used In the Uniform Commercial Code

Last Updated on Thursday, 8 March 2018 12:32 Written by Chris Griswold Thursday, 8 March 2018 12:32

The commercial transactional world is driven by certain, basic, legal terminology that appears in many contracts.  Understanding some of these better helps everyone.  In the world of commercial transactions (between commercial parties), there are actions and behaviors that have previously occurred either between the same or different sets of commercial parties (which are commercial buyers and sellers of goods – and all governed by the Uniform Commercial Code) that, over time, come to govern the future actions and conduct of such commercial parties, in the event of a dispute that later occurs between such parties.  Good stuff.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Understanding Legal Terminology Used In the Uniform Commercial Code

Question #1:  What does “course of performance” mean? 

Answer:   In the event of a later dispute between two commercial parties, the court can look towards the past behavior of such, same two parties which has occurred over the course of time on the same deal.  For instance, if a buyer has been taking delivery of certain goods from the seller on a certain calendar date of the month for a long period of time, then, the failure of the seller to deliver on such date or the buyer to accept delivery on such date (whether or not the calendar date is set forth in the written contract, if any) shall be very persuasive in such later dispute.  In other words, the failure of either party to perform on such calendar date, after having performed on such date over a long period of time, disturbs the status quo of the relationship – a bad thing; the Court having jurisdiction over the dispute will view things through this lens.

Question #2:  What does “course of dealing” mean? 

Answer:  Same fact pattern as above, however, the Court can instead look at the past behavior of the same two parties which has occurred over the course of time on other deals (not the same deal).  In other words, the failure of either party to perform on such calendar date will be compared against how the parties have gotten along, for example, the twenty years before on other deals that they’ve done together.  Why the change?  Well, it might be because the matter at issue has never occurred on the same deal in question, but it has happened on other deals they’ve done together….

Question #3:  What does “usage of trade” and “industry standards” mean? Why would they be used? 

Answer:  Same fact pattern as above, however, in the absence of any deal history between the same two parties at issue which might serve as a guiding light in the matter at issue, the court will look at how other, similar parties behave under the same circumstances.  The way such other, similar parties behave can be discovered by: 1) looking at “usage of trade” (which is how certain business terms and dates are generally defined or handled by other, similar parties who conduct the same sort of trade together), and/or 2) by looking at the prevailing “industry standards” which are common and prevalent in the same industry at issue – that they can persuasively settle or resolve the matter at issue.  In such a situation, the Court uses these external customs, terms, practices or methods to resolve the matter at issue between such two commercial parties.

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Ice, Ice Baby (Vanilla Ice, To The Extreme, 1989)

Last Updated on Thursday, 11 January 2018 05:54 Written by Chris Griswold Thursday, 11 January 2018 05:54

Icy, snowy, slippery sidewalks (say it 3 times fast).  We’ve all seen our share this winter.  In response to a large number of inquiries I’ve received from concerned hotel, restaurant, office and retail owners and tenants, as well as the several requests I’ve received from our local insurance underwriting community that I write on the topic, I wanted to write a short piece in the hopes it saves some of you needless worry and, possibly, money.  Accordingly, I’ll answer the two most commonly asked questions from the groups mentioned above.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Ice, Ice Baby (Vanilla Ice, To The Extreme, 1989)

Question #1:  “If I put out snow melt on my sidewalks, does it somehow serve as an admission of guilt if someone should subsequently slip and fall on the premises?

Answer:  No.  The very act of putting out snow melt, etc… in an effort to prevent people from slipping, falling and hurting themselves cannot later be used against you.  In other words, you can’t use someone’s efforts to avert an accident against them later on if and when the accident occurs.  If you could, it would be tantamount to saying “…I’m suing you for trying to help me.”  Now, there are other relevant factors including, but not limited to, whether or not another person slipped and fell in the same area just before the plaintiff slipped and fell, whether you put out enough – and many others.  However, the fact that you put out snow melt, in and of itself, is not an admission of guilt; nor can it later be used against you in showing negligence.  Accordingly, don’t be afraid to put out snow melt when the weather gets bad.  However, and most importantly, when you put it out, put out enough to really do the job (including getting out your shovel if need be so the area(s) in question are clean, clear and safe).

Question #2:  “When should I put out snow melt?

Answer:  It depends.  Actually, the legally correct answer to this question is “when it’s reasonable to do so.”  Say what??!  I know…, it’s legalese and not really clear.  However, you can pretty much nail it down if you ask yourself the following question: Given the current weather conditions; if my mother came to see me at work today, should I put out snow melt?  If the answer is yes, put it out.  Otherwise, don’t sweat it.

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Defend Trade Secrets Act (DTSA)

Last Updated on Wednesday, 11 October 2017 11:59 Written by Chris Griswold Wednesday, 11 October 2017 11:59

Today, there’s so much technology and capability to steal the intellectual property and trade secrets given the ever-evolving technology advancements of today’s business world….  They’re a huge cybersecurity risk.  Oklahoma adopted a form of the Uniform Trade Secrets Act (UTSA) in 1986 (Texas did not until 2013).  However, in May of 2016, President Obama made law the federal Defend Trade Secrets Act, which provides a first-time ever, federal, private cause of action for those who claim that their trade secrets have been “misappropriated.”  Helpful information for everyone (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Defend Trade Secrets Act (DTSA)

Question #1:  Why was the federal DTSA made law?  Although 48 States had previously passed their own form of the UTSA (all with their own variances, gaps, inconsistencies, etc…), until now, there was no federal cause of action for stealing others trade secrets and other forms of intellectual property – an the UTSA’s of the States were, again, inconsistent and lacked homogeneity.  Furthermore, to bring a claim under a State’s particular UTSA, the action could only be brought in such State’s State court system, not the federal courts.

 Question #2:  What sort of facts must exist that permit the federal DTSA to apply?  A federal DTSA claim can only be brought if “…it is related to a product or service used in, or intended for use in, interstate or foreign commerce.”  This is the federal “diversity requirement” that mandates that the wrongful misappropriation occurred across State lines or in another country.  So, if some sort of alleged misappropriation of your intellectual property or some other sort of trade secret gets tossed around between OKC and Dallas, you can have redress under the federal DTSA.  But, if it all happens, from beginning to end, here in Oklahoma – no luck.

Question #3:  What does the DTSA define as a “trade secret”?    The federal DTSA defines “trade secret” as “…all forms and types of financial, business, scientific technical, economic, or engineering information including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes…”; including “tangible or intangible” information, regardless of how such information is “…stored, compiled or memorialized.”  So what?

Question #4:  What does the Oklahoma UTSA define as a “trade secret”?    In comparison, the Oklahoma UTSA defines “trade secret” as “…information, including a formula, pattern, compilation, program, device, method, technique or process….”  So, the federal DTSA appears to be broader in its definition of what constitutes a “trade secret,” not surprising since the federal DTSA is 30 years newer than the 1986 Oklahoma UTSA.  So what?

Think about employees and certain vendors here, and trade secret stuff found nowhere else but in the employee’s or vendor’s minds – and same being subject to a plaintiff’s federal DTSA claim (but not the Oklahoma UTSA).

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“Chris Griswold has a way of simplifying complex legal issues.  He is quick to respond, efficient and professional in his delivery of services and fair and up front with his cost.  Professional Insurors considers Chris an asset to both our business and our clients.  Our trust in Chris grows each and every time we call upon his expertise.”
Kelly Miller / President / Professional Insurors Agency, LLC / Oklahoma City, Oklahoma

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