K.S.A. § 84-1-102 (2026)

Scope of article

KANSAS COMMENT, 1996

1. Subsections (1) and (2) state a broad rule requiring liberal construction of the Code so that its underlying policies may be furthered. See Iola State Bank v. Bolan, 235 K. 175, 679 P.2d 720 (1984). The Code is intentionally designed to allow room to grow, and traditional rules of narrow statutory construction have no place in a modern commercial statute of this type. This philosophy was recognized and followed in Wendling v. Puls, 227 K. 780, 610 P.2d 580 (1980).

2. Subsections (3) and (4) state as a general principle that the parties are normally free to write their own contracts. It is worth noting that under subsection (3), however, the parties cannot change the statute; rather, the parties may change "the effect" of the statute. See Official Comment 2 to this section.

3. In some settings, such as sales contracts under Article 2, the parties might be likely to write their own rules, and the courts should allow them considerable flexibility in doing so. In other settings, variation of standard or accepted practices is less likely, and the courts may require more explicit agreement. For example, in Cairo Coop. Exch. v. First Nat'l Bank of Cunningham, 228 K. 613, 620 P.2d 805 (1980), modified, 229 K. 184, 624 P.2d 420 (1981), it was held that a course of conduct could not vary the duties imposed by a restrictive indorsement.

4. Several sections of the Code contain express limitations on freedom of contract. Subsection (3) of this section states one of the most important: the obligations of good faith, diligence, reasonableness, and care prescribed by the Code may not be disclaimed by agreement, although the parties may set the standards by which their performance of these obligations is measured. Some other provisions of the Code expressly preclude variance by agreement, such as 84-1-105 (certain choice of law rules); 84-1-204 (agreements as to time); 84-2-210(1) (delegation of duties); 84-2-318 (third party beneficiaries); 84-2-616(3) (procedure after notice claiming excuse); 84-2-718(1) (limitations of liquidated damages); 84-2-719(3) (limitations of consequential damages); 84-4-103 (limitation of damages for a bank's lack of good faith or failure to exercise ordinary care); 84-4a-404(c) (right of a beneficiary to receive payment and damages); 84-9-318(4) (assignment of certain accounts); 84-9-501(3) (rights of a debtor after default in a secured transaction); and 84-9-505 (compulsory disposition of collateral). Each is noted in the applicable Kansas Comment 1996.

5. Other provisions of the Code probably cannot be varied by agreement even though the Code does not say so explicitly. For example, the various Code statutes of frauds surely are not variable by agreement. See 84-1-206, 84-2-201, 84-2a-201, 84-3-104, 84-5-104, and 84-9-203. In addition, 84-2-302 and 84-2a-108, on unconscionability, should not be variable. See also 84-2-513 (buyer's right to inspect). There may be other provisions in the Code that, because of the policy underlying the provision, a court would not permit the parties to vary by agreement. In the bulk of the Code, however, the general principle of freedom of contract prevails and should be followed.

Revisor's Note:

Former section 84-1-102 was repealed by L. 2007, ch. 89, § 49 and the number reassigned to the current text.

Law Review and Bar Journal References:

Paragraph (2) quoted in 1963-65 survey of secured transactions, J. Eugene Balloun, 14 K.L.R. 359 (1965).

Subsection (2)(c) mentioned in "Negotiable Instruments—Irrevocable Commitment as Value Under the Uniform Commercial Code," Terry L. Kramer, 7 W.L.J. 399, 405 (1968).

Strict liability in tort as adopted in Kansas, 25 K.L.R. 462, 470, 471 (1977).

Implied waiver doctrine to article 9 transactions, "Uniform Commercial Code: Farm Creditor Protection," Brian McMahill, 18 W.L.J. 199 (1978).

"Comparative Fault and Strict Products Liability in Kansas: Reflections on the Distinction Between Initial Liability and Ultimate Loss Allocation," William Edward Westerbeke and Hal D. Meltzer, 28 K.L.R. 25, 96 (1979).

"Commercial Law—Commercially Unreasonable Foreclosure Sales in the Context of a Surety Relationship—United States v. Lattauzio," John S. Clifford, 34 K.L.R. 175, 181, 184, 188 (1985).

"Lender Liability: A Survey of Theories, Thoughts and Trends," Troy H. Gott and William L. Townsley III, 28 W.L.J. 238, 241, 272 (1988).

"Creditor Beware: From Default Through Deficiency Judgment," Wanda M. Temm, 60 J.K.B.A. No. 8, 17, 18 (1991).

CASE ANNOTATIONS

1. Depositary-payor bank receiving a "For Deposit Only" check has duty to apply proceeds consistently with endorsement; variance may be made by agreement. Cairo Cooperative Exchange v. First Nat'l Bank of Cunningham, 4 Kan. App. 2d 458, 463, 465, 608 P.2d 1370.

2. U.C.C. to be liberally construed. Wendling v. Puls, 227 Kan. 780, 784, 610 P.2d 580.

3. Cited in showing legislative intent to impose absolute and non-delegable duties on one party to contract. State v. Mwaura, 4 Kan. App. 2d 738, 741, 610 P.2d 662.

4. Bank held liable for conversion and breach of contract. Cairo Cooperative Exchange v. First Nat'l Bank of Cunningham, 228 Kan. 613, 620 P.2d 805. Opinion modified and motion for rehearing denied: 229 Kan. 184, 624 P.2d 420.

5. Secured creditor sale of collateral not in "commercially reasonable manner"; deficiency not barred; test. Westgate State Bank v. Clark, 231 Kan. 81, 86, 642 P.2d 961 (1982).

6. A secured obligation may have a purchase money part and a nonpurchase money part. In Re Gibson, 16 B.R. 257, 258, 268 (1981).

7. Principles of law and equity and other validating or invalidating causes remain unless displaced by UCC. Iola State Bank v. Bolan, 235 Kan. 175, 179, 679 P.2d 720 (1984).

8. States not granted authority to remove federal court jurisdiction merely by codifying traditional common-law cause. Federal Deposit Ins. Corp. v. Gates, 594 F. Supp. 36, 38 (1984).

9. Suit by bank in depositor's name; breach of implied warranties, forged and missing indorsements, statute of limitations discussed. Chilson v. Capital Bank of Miami, 237 Kan. 442, 447, 701 P.2d 903 (1985).

10. Priority between right of setoff and perfected security interest determined. Bank of Kansas v. Hutchinson Health Services, Inc., 13 Kan. App. 2d 421, 428, 773 P.2d 660 (1989).

11. Computer software as goods under UCC noted. Systems Design v. Kansas City P.O. Employees Cred. Union, 14 Kan. App. 2d 270, 788 P.2d 878 (1990).

12. Whether contractual provisions exculpating warehouseman from all liability for its own ordinary negligence is enforceable examined. Butler Mfg Co. v. Americold Corp., 835 F. Supp. 1274, 1280 (1993).

13. One of the code's purposes is to permit the continued expansion of commercial practices through custom, usage and agreement. Cravotta v. Deggingers' Foundry, Inc., 42 Kan. App. 2d 700, 215 P.3d 636 (2009).