Allocation of Scarce Goods under Section 2-615 of the Uniform Commercial Code: A Comparison of Some Rival Models

Section 2-615 of the Uniform Commercial Code authorizes a contract seller to allocate goods in short supply when full performance has become commercially impracticable. Most of the cases under and commentary on that section have focused on the issue of commercial impracticability. The allocation aspects of the section have attracted much more modest attention in the cases and in the scholarly journals. The purpose of this article is to examine critically the allocation rule set out in section 2-615(b). That subsection authorizes a seller, upon a finding of commercial impracticability, to allocate "in any manner which is fair and reasonable." By reference to a series of sources I propose to give meaning to the "fair and reasonable" language, to examine alternative modes of allocation under that language, and to suggest the reasons and policies that might cause a seller to choose one mode over another and that should cause a court to direct that one or another method of allocation be followed. My thesis in this article is threefold: first that the courts' general refusal to overturn most sellers' allocation plans has been a wise decision; second that a variety of appropriate reasons cause the typical seller to use a largely pro rata allocation plan; third that reference both to the common law history and to non-common law methods of allocation within the Code and under the federal administrative agencies gives some insight about the rare case in which a court should disapprove a proposed allocation plan and about the safeguards that need to be set up for a seller who would deviate from a pro rata allocation scheme.