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What Is UCC 1-308?

In the commercial setting, it is easy for contracts and contract laws to become complicated.
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  • Written By: Sandi Johnson
  • Edited By: John Allen
  • Last Modified Date: 25 September 2014
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The Uniform Commercial Code (UCC) is the codification of laws governing commerce in the United States in which matters of selling, borrowing, lending, and other matters of trade are covered. The term UCC 1-308 refers to Article 1, subsection 308 of the Uniform Commercial Code. Subsection 308 addresses the concept of reservation of rights with regard to performance or acceptance of contract terms. Specifically, this code establishes the protection of rights in a commercial setting where contract terms cause unknowing conflict with or risk to certain rights.

The purpose of UCC 1-308, enacted to replace UCC 1-207, is to protect an individual or business entity from unknowingly giving up rights by agreeing to specific contract terms. By signing a document with additional terms such as “without prejudice,” or “under protest,” and referencing this code, the signee establishes the retention of any rights he or she unknowingly or under false pretense agrees to surrender. Such provisions do not allow an individual or business to avoid legally binding contract terms, but rather to accept contract terms without risk to his other rights. Typically, these rights apply to matters of debt and contract performance.

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Contracts and contract laws, especially in a commercial setting, can easily become complicated through the use of unclear language or a lack of full disclosure of legal consequences. Many complicated if-then scenarios in a business contract can inadvertently result in the loss of certain legal rights. As such, UCC 1-308 seeks to provide the ability to declare inadvertent contractual consequences null and void. In short, the code establishes that, when agreeing to certain performance or contract terms, if such terms result in a loss of rights to which one party is unaware, performance cannot be forced. The code specifically excludes matters involving accord and satisfaction, where parties agree to augmented or lesser terms than originally agreed to, in order to settle a dispute or breach of contract.

A solid understanding of this rule and its application is necessary to effectively use such provisions. Simply signing a document with terms such as "under protest" or "without prejudice" does not invalidate it. Such actions only protect signers from inadvertently surrendering their rights or the rights of the corporate entity that they represent. For example, signing a vendor contract with the term "without prejudice" does not automatically invalidate the contract. If, by signing such a document, the company unknowingly surrenders the right to sue for remedies based on non-performance, such notations would help preserve the company’s right to remediation.

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anon969786
Post 7

Without prejudice, I am most certain, you are going to find in government notices of action too. Contract is about performance. Signing is important too. Acceptance of an offer is important, too.

Is signing without prejudice counteroffer that is valid if it is not rebutted? Would you approve that someone would drive next to your children 100 miles an hour in residential area claiming section 1-308? There might not be any damage. Would you agree that would be a civil action in a residential area? Is driving 100 miles an hour enough action to change the status of the original contract?

Would you be interested in inviting government officials to enforce civil actions in residential areas? I am not advocating anything, but some sort of enforcement is in need to protect the interests of the public. Also, some sort of protection is in need to protect yourself against abuse of power.

It is not easy for an officer to control his power. It is human nature to exercise any power, but to control it is a level of person that I am impressed with.

anon348740
Post 5

If you vary the terms of the offer by conditioning the acceptance, then you have rejected the offer.

anon333209
Post 4

"Without prejudice" and "under protest" are not the same.

Without prejudice is Blacks Law definition: "Without any loss or waiver of rights or privileges."

anon329490
Post 3

I'm going to use this on my wedding "license." Anyone who has ever looked into how complicated law and "legalese" should know where I'm going. The license (between two parties and the state) is an agreement and you are stating that marriage is illegal and you need the state's permission to get married at all. Just look up the lawful (we are dealing in the legal realm here, common english words do not exist) definition of license. Thanks for reconfirming something awesome.

Fa5t3r
Post 2

@Ana1234 - I bet you aren't the first person to think of that, and as it said in the article, it's much more complicated than that, so I don't think it would help you. Plus I don't know if it would even apply, since the UCC 1-308 and the "without prejudice" thing are supposed to be for companies that are buying or selling something. It's true that some of those websites do things like sell on your data, but I don't think providing them with the data in the first place counts as a transaction.

I know it's a pain, but if you are planning to use a website or an application for original work (such as your photos) you really should try to read all the fine print before you sign the contract. People don't realize that some websites have it in their terms that anything posted there essentially belongs to them.

Ana1234
Post 1

I think it's probably true that I agree to a hundred times more contracts in a year now than I would have if I had been born twenty years earlier. Every time you have to sign up to a website or company, or use an application, it seems like you are having to agree to terms and conditions.

I wonder what would happen if, instead of clicking "I accept" in those boxes, or writing your name, you wrote something like "under protest" and if that would do anything to help your case if the company then did something you didn't like.

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