Each state has its own business and commercial transactions laws. With only these often conflicting and differing laws, transacting business in another state would be very difficult without uniformity. The Uniform Commercial Code, more commonly referred to as the UCC, is a collection of laws designed to establish uniformity among state laws. The UCC states that its goal is “to simplify, clarify and modernize” law, “to permit the continued expansion of commercial practices,” and “to make uniform the law among the various jurisdictions.”
The American Bar Association’s proposal for uniform business laws led to the UCC. A final draft of the UCC was produced after several drafts and through the collaborative efforts of several organizations. Today, all 50 states have adopted the UCC, either in whole or in part.
The UCC is divided into several Articles. Each Article discusses a different area of commercial law. Some of the better known Articles include:
- Article 2: Sale of Goods. This Article focuses on the exchange and sale of goods, whether between two merchants or some other combination of sale. This Article also provides guidance on managing cases for breach of contract.
- Article 3: Commercial Transactions. This Article deals with negotiable instruments, such as promissory notes and checks. These rules provide guidance on how negotiable instruments may be exchanged as well as rules on enforceability and fraudulent transfers.
- Article 9: Securities / Secured Transactions. This Article covers security interests in real property. Like with Article 3, this Article explains, among other things, how a security interest is created, how one is perfected, and how a security interest may be enforced.
It is important to recall that the UCC is only a model code. While the UCC was written with the goal of establishing uniformity among states’ commercial laws, the UCC itself has no legal force. States must either adopt the UCC into their versions or must create laws with similar legal force.
As mentioned above, every American state has either adopted or implemented some version or aspect of the UCC into its laws. Further, since every state has adopted or implemented some version of the UCC, commercial law is fairly uniform across the states.
Still, variations do exist. Therefore, it is important that businesses, merchants, and even consumers be aware of those laws and rules that directly impact their rights and commercial transactions.
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Commercial law can be complicated. Understanding commercial law is often made easier when explained by experienced and knowledgeable legal counsel. The attorneys at Maduabum Law Firm, LLC will help answer your questions and provide you with the counsel to address your commercial needs. Schedule your consultation by calling our offices today.