Uniform commercial code

What is the uniform commercial code?

The Uniform Commercial Code (UCC or the Code), first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America. It is composed of the following articles:

Article 1. – General Provisions
Article 2. Sales
Article 2A. Leases
Article 3. Negotiable Instruments
Article 4. Bank Deposit
Article 4A. Funds Transfers
Article 5. Letters of Credit
Article 6. Bulk Transfers and Bulk Sales
Article 7. Warehouse Receipts, Bills of Lading and Other Documents of Title
Article 8. Investment Securities
Article 9. Secured Transactions

How did it come into being?

The UCC is the longest and most elaborate of the uniform acts. The Code has been a long-term, joint project of the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI),[1] who began drafting its first version in 1942. Judge Herbert F. Goodrich was the Chairman of the Editorial Board of the original 1952 edition, and the Code itself was drafted by some of the top legal scholars in the United States, including Karl N. Llewellyn, William A. Schnader, Soia Mentschikoff, and Grant Gilmore.

The Code, as the product of private organizations, is not itself the law, but only a recommendation of the laws that should be adopted in the states. Once enacted by a state, the UCC is codified into the state‚Äôs code of statutes. A state may adopt the UCC verbatim as written by ALI and NCCUSL, or a state may adopt the UCC with specific changes. Unless such changes are minor, they can seriously obstruct the Code’s express objective of promoting uniformity of law among the various states. Thus persons doing business in different states must check local law.

The ALI and NCCUSL have established a permanent editorial board for the Code. This board has issued a number of official comments and other published papers. Although these commentaries do not have the force of law, courts interpreting the Code often cite them as persuasive authority in determining the effect of one or more provisions. Courts interpreting the Code generally seek to harmonize their interpretations with those of other states that have adopted the same or a similar provision.

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