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This is an unofficial draft of Article 2B from April 15, 1998. For the current official version, see the University of Pennsylvania Law School (Official NCCUSL) site at http://www.law.upenn.edu/library/ulc/ulc.htm SECTION 2B-106. EFFECT OF AGREEMENT; RULES OF CONSTRUCTION; ISSUES DECIDED BY COURT (a) Except as otherwise expressly provided in this article or in Article 1, the effect of any provision of this article, including allocation of risk or imposition of a burden, may be varied by agreement of the parties. However, except to the extent stated in the following sections, the agreement may not vary: (1) the limitations on choice of law in Section 2B-107; (2) the limitations on choice of forum in Section 2B-108; (3) the right to relief from an unconscionable contract or clause in Section 2B-110; (4) the definitions of manifest assent and opportunity to review in Sections 2B-111 and 2B-112; (5) the right (6) the limitations on enforceability in Section 2B-201; (7) the rights under (8) the limitations on disclaimer of warranties in Section 2B-406; (9) the limitations on contractual transfer restrictions Section 2B-502 (10) the limitations on dispensing with (11) the limitations on liquidated damages in Section 2B-704 (a); (12) the restrictions on the statute of limitations in Section 2B-705(a); or (13) the limitations on self-help repossession in Section 2B-716. (b) In applying this article, the following rules apply: (1) Except as otherwise provided in subsection (a), the (2) The fact that a provision of this article states a precondition for a result does not of itself imply that the absence of that precondition yields the opposite result. (3) Unless this article requires a term to be conspicuous or negotiated or that there be manifest assent or express agreement to the term, or makes a term that fails to meet any of these requirements unenforceable, these requirements are not a prerequisite to enforceability of the term. (c) Whether a term is conspicuous or is excluded under Section 2B-208(a) is a question to be determined by the court. Uniform Law Source: None.Definitional Cross Reference: "Agreement". Section 1-201. "Conspicuous". Section 2B-102. "Contract". Section 2B-102. "Court". Section 2B-102. "Notice". Section 1-201. "Reason to know": Section 2B-102. "Rights". Section 1-201. "Term". Section 1-201. Committee Actions: a. Reviewed without substantive change at three meeting. b. Rejected a motion to delete subsection (b)(2). Vote: 2 - 7 (Feb. 1998) Reporter's Notes: 1. Basic Principle. Article 2B adopts the basic commercial law principle of contractual freedom. Contract choices control unless there are direct, tangible and over-riding policy considerations that mandate direct restraints on contract choice. The parties are free, by agreement, to alter the effect of any provision of this Article except for the few mandatory rules provided in Article 1 or referenced in this section, subject, of course, to the basic contract law restraint that contracts and their terms must not be unconscionable. The parties' ability to exercise their right to alter the effect of provisions of this Article by agreement does not require a formal, written contract and express terms to achieve that result. That may occur as the result of course of dealing, trade use or other circumstances; the idea of "agreement" encompasses the entire bargain of the parties in fact. 2. Drafting Style. The dominance of agreed terms over statutory rules characterizes all U.C.C. transactional articles. It is especially important to state the principle here because of the drafting style used in this Article. Article 2B was drafted without use of the phrase "unless otherwise agreed" and frequently use mandatory language, such as "shall" or "must." These do not change the basic principle that the contract controls. Subsection (a) makes that clear. The style preference does not alter the basic policy. All Article 2B provisions can be altered by agreement unless otherwise indicated. This section expressly rejects decisions such as Suburban Trust and Savings Bank v. The University of Delaware, 910 F. Supp. 1009 (D. Del. 1995) (terms of Article 9 provision superseded the contract choice principle in UCC § 1-102). Subsection (a) provides a cross reference to the limited number of contexts in Article 2B where a contract cannot alter mandatory rules. In addition, of course, term are some similar limitations in Article 1 and in some state regulations of contracting practice. 3. Rules of Construction. Subsection (b) deals with several concerns that also arise from the drafting style. Subsection (b)(2) resolves interpretation questions about the existence of a so-called negative pregnant in many of the rules in this article. Thus, if a section states that "If the originator of a message requests acknowledgment, then the following rules apply: ---" that does not indicate what rules apply in the absence of that request; in itself, it does not bar a court from adopting some or all of the same rules in the absence of a request, but merely states the affirmative proposition. If a more exclusionary result is intended, it is either made express or can be inferred from the context or the associated policies. Similarly, subsection (b)(3) states the premise that, for purposes of this Article, requirements of conspicuousness, assent or the like exist only when expressly imposed with respect to a particular term. 4. Issues as a Matter of Law. Subsection (c) provides that whether a term is conspicuous is a matter of law and applies that principle to related issues under 2B-208. This follows current law. |