Legal Question in Business Law in New York

Without Prejudice

What does "without prejudice UCC-1-207" mean or indicate(in whole or in part)when an individual includes this phrase after his signature on his drivers license and his payroll tax withholding forms?

Asked on 9/28/99, 11:37 am

1 Answer from Attorneys

Gerry Elman Elman Technology Law, P.C.

Re: Without Prejudice

The UCC is the Uniform Commercial Code, a statute recommended by the Conference of Commissioners on Uniform State Laws and enacted in virtually the same form in all 50 States. It covers standard terms for the sale of goods, for "commercial paper" such as checks, for security interests, and related subject matter.

Section 1-207 of the UCC is a provision allowing a party to a contract that is governed by the UCC to perform (or to accept performance) of a contract which is in dispute in a manner demanded or offered by the other party, without waiving any rights, by the use of appropriate language reserving rights, such as "without prejudice." That is, say you give me fifty dollars and I agree to sell you ten chickens for that amount. Then I deliver only five chickens and ask you to acknowledge that you've received delivery of what I owe you. Traditionally that puts you in a bind -- either sign and accept the partial delivery as being complete -- or stand pat for the ten chickens by refusing the partial delivery -- but maybe get stuck with nothing.

UCC sec. 1-207 provides a way out of that bind. Accept the five chickens, but sign the receipt with words of "reservation" such as "without prejudice" or "under protest." That way, you have your cake and eat it too. You get to accept the partial delivery, and then later make your claim for the rest, without being deemed to have "waived" your rights.

Because you ask what it "indicates" when someone signs a driver's license and payroll withholding forms with the UCC legend, I'm going to put tongue in cheek and make a comment that could apply generally ... but that might not really apply specifically to the person you're writing about, because I don't have any further information about him or her.

But to me such behavior might indicate a combination selected from any of several personality characteristics: (1) intent to use gamesmanship to outsmart the other party by legal technicalities; (2) lack of knowledge of the distinction between transactions to which the UCC applies and those to which it does not; (3) laziness in being unwilling to think enough about each signature to apply a distinction that the person does understand; (4) rigidity of behavior that does not adjust to the particular circumstance; (5) subservience to the authority of someone -- maybe a lawyer -- who once instructed the individual to sign everything with this restriction; (6) a desire to have one's cake and eat it too; and/or (7) that the individual once was found to have inadvertently waived some rights by signing something and then vowed never to repeat the mistake.

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Answered on 9/28/99, 7:36 pm

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