The Uniform Commercial Code (UCC) governs commercial transactions such as selling goods, securing transactions and negotiating instruments. Suppose there is a dispute about the contract terms after an agent enters into a contract on behalf of a principal. In that case, the UCC provides rules for interpreting the contract and determining the parties’ obligations. Story (2020) described that agent law clarifies the relationship between the principal and the agent to settle the dispute in a contract, and the UCC provides rules that enforce contracts for the sale of goods. For example, if the goods are damaged, the UCC provides rights that prevent the buyer from purchasing damaged goods. Therefore, for an agent to abide by the principal contract, agency law looks at their legal relationships, while the UCC provides standard rules that help promote consistency and predictability in commercial transitions.
Employees owe a duty of loyalty as an agent to the employer when they enter into an employment relationship. It means the company may hold any liable contract that an employee enters on behalf of the company provided the employee acted within the scope of their employment. Pichault and McKeown (2019) showed that the duty of loyalty is one element of agency law relating to employees’ commitment to other companies. This duty requires employees to put the company’s interest above their own and those of other organizations. Hence, if employees engage in activities that compete with their employer’s business, they may breach this duty.
In addition, agency law plays an essential role in regulating employee commitments to other companies. The duty to disclose conflicts of interest is another vital element of agency law connected to the worker’s commitment to other corporations. Yin et al. (2019) asserted that a conflict of interest might be created if an employee has commitments to other companies; they must disclose this information to their employer. Employees may face disciplinary action if they fail to disclose information to the company. Thus, employees must understand their obligations to their parties and take steps to protect their business interests.
A supplier becomes the company’s agent when it enters into a subcontract. When it is obligatory to stop the shipment of products from their subcontract supplier, several provisions in the UCC are to be considered. Flechtner (2019) proposed that under UCC, a buyer has a right to stop the delivery of goods that are non-conforming, spoiled, or have been shipped inappropriately. The company exercised this right when it believed the goods would not meet the contractual requirements. Therefore, to succeed in stopping the shipment, the company must notify the supplier about the breach of contract within a reasonable time to preserve this right.
Moreover, remedies for the breach of contract are another provision in the UCC that are significant when one corporation finds it essential to stop the shipment. These remedies help avoid conflict of interest between the seller and the buyer. According to Flechtner (2019), under the UCC, if the seller breaches the contract by delivering non-conforming goods, the company is entitled to remedies such as the right to sue for damage and to seek specific performance. The company must bring the claim within four years after the cause of action has accrued. Hence, when a company needs to stop a shipment, it should consider its right to available remedies for breach of contract provided to it under the UCC.
In conclusion, the UCC works with agency law by providing specific contract provisions during a business transition. If a contract dispute arises, the agency law and the UCC will provide the required information to determine whether the company is liable for the suppliers’ actions. A contract between the buyer and the seller is managed when the goods sold met certain quality. Therefore, agency law and the UCC provide a framework that resolves contract disputes in subcontracting relationships.
References
Flechtner, H. M. (2019). The Past, Present, and Future of the CISG (and Other Uniform Commercial Law Initiatives). Journal of Law and Commerce, 38, 35. https://heinonline.org/HOL/LandingPage?handle=hein.journals/jlac38&div=7&id=&page=
Lipson, J. C., & Weise, S. O. (2019). The Business Lawyer at 75 and Secured Transactions Under Article 9 of the Uniform Commercial Code. The Business Lawyer, 75(1), 1575–1596. https://www.jstor.org/stable/27171059
Pichault, F., & McKeown, T. (2019). Autonomy at work in the gig economy: analyzing work status, work content and working conditions of independent professionals. New Technology, Work and Employment, 34(1), 59–72. https://doi.org/10.1111/ntwe.12132
Story, J. (2020). Commentaries on the Law of Agency.
Yin, Y., Wang, Y., & Lu, Y. (2019). Antecedents and outcomes of employee empowerment practices: A theoretical extension with empirical evidence. Human Resource Management Journal, 29(4). https://doi.org/10.1111/1748-8583.12243
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