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Highlight Updates Requirement of Liberal Construction

The Uniform Commercial Code (UCC) imposes a statutory mandate of liberal construction to promote its underlying purposes and policies.380 This mandate means that the Code’s general requirements of reasonableness and good faith can be more influential in deciding a case than the strict, literal language of the Code. Comment 1 to section 1-103 explicitly recognizes the primacy of policy over strict statutory construction:

The Uniform Commercial Code should be construed in accordance with its underlying purposes and policies. The text of each section should be read in the light of the purpose and policy of the rule or principle in question, as also of the Uniform Commercial Code as a whole, and the application of the language should be construed narrowly or broadly, as the case may be, in conformity with the purposes and policies involved.

The same comment gives specific approval to the implementation of statutory policies by supplying “liberal and useful remedies” that are “not provided in the statutory text,” and by disregarding statutory limitations on remedies when the reason behind the limitation was inapplicable. Section 1-305 states that “[t]he remedies provided by [the Uniform Commercial Code] must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed.”381

This principle of liberal construction to promote the Code’s underlying policies does not, of course, benefit only buyers. Sellers may justifiably lay claim to expansive interpretation of statutory language. Thus, for example, courts have consistently allowed a seller to repair minor defects even though the language of section 2-508 permits repair only in limited circumstances.382


  • 380 {380} See Propulsion Technologies, Inc. v. Attwood Corp., 369 F.3d 896 (5th Cir. 2004); Ameristar Jet Charter, Inc. v. Signal Composites, Inc., 271 F.3d 624 (5th Cir. 2001) (requirement of notice of breach); Muehlbauer v. Gen. Motors Corp., 431 F. Supp. 2d 847, 858 (N.D. Ill. 2006) (applying rule of liberal administration to requirement of notice of breach); Lloyd v. Gen. Motors Corp., 916 A.2d 257 (Md. 2007); Shurlow v. Bonthuis, 576 N.W.2d 159 (Mich. 1998); Spencer v. Golden Rule, Inc., 1995 Tenn. App. LEXIS 492 (Tenn. Ct. App. July 19, 1995) (liberally construing U.C.C. to find consumer’s notice of revocation sufficient); Fed. Signal Corp. v. Safety Factors, Inc., 886 P.2d 172 (Wash. 1994); B & W Glass v. Weather Shield Mfg., 829 P.2d 809 (Wyo. 1992).

  • 381 {381} See Mayberry v. Volkswagen of Am., Inc., 692 N.W.2d 226 (Wis. 2005) (applying this principle to hold buyer of defective car entitled to damages despite having traded car in).

  • 382 {382} See §§ 8.2.7, 8.3.7, infra.