Uniform Commercial Code and Other Uniform Laws

The Uniform Commercial Code (UCC) was written by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. Its main goal is to establish a uniform law to govern commercial transactions that often take place across state lines.

Many of the UCC sections have been revised or are being revised to reflect changes that have occurred since the Code was first drafted. Individual states will still decide which provisions of the Code they will adopt.

The Code is divided into 11 articles. We have provided a brief description of the scope of each article, the date of its most recent revision to the uniform version, and whether any Article is currently under revision.

Article 1 contains definitions of commercial law terms and some general rules of construction that apply to transactions under most of the provisions of the UCC. It currently is under revision.

Article 2 applies to all contracts for the sale of goods. It is currently under revision.

Article 2A applies to transactions that create a lease of goods. The most recent revision was in 1990, and it currently is under revision.

Article 3 applies to "negotiable instruments" such as checks, traveler’s checks and promissory notes. The most recent revision was in 1990, and it is now under revision.

Article 4 governs "bank collections" of checks and drafts; it differs substantially from the federal regulations for check collection under Federal Reserve Regulation CC and the Expedited Funds availability Act of 1987. The most recent revision was in 1990, and it is now under revision.

Article 4A governs "funds transfers" made through banks. It is now under revision along with Articles 3 and 4.

Article 5 governs "letters of credit" in which one bank promises to pay on behalf of a client for the benefit of a third party, usually a seller of goods or an obligee of a performance obligation. The most recent revision was 1995.

Article 6 governs "bulk sales," which are sales of the entire inventory of a business, for example. The most recent revision was in 1989. Note: many states have repealed the bulk sales article.

Article 7 applies to "domestic documents of tile," a term which includes both "bills of lading" in shipment transactions and "warehouse receipts" and other evidences of "bailments."

Article 8 governs transactions in investment securities. The most recent major revision was in 1994. Some additional revisions were made in 1998 along with the 1998 revision of Article 9.

Article 9 applies to transactions in which two parties known as the secured party and the debtor create a contract for the debtor to provide security or collateral for the benefit of the secured party, either to secure a debt owed by the debtor or a performance obligation owed to the secured party obligee. The most recent revision was in 1998. Many states have now enacted the 1998 revision of Article 9 and have adopted the earliest effective date, which is July 1, 2001.

Because the UCC varies to some degree from state to state and because much of the UCC is under revision, we decided not to print it in this edition of the textbook. Rather we recommend that the reader use one of the two primary sites that keep the most up-to-date versions of the UCC and also provide information on enactments by individual states. This enables the instructor to teach the versions of the UCC that are in effect in the state where the class is being taught or to use the most recent uniform version of each UCC article.

Visit the following Web site to view the articles:

http://www.law.cornell.edu/ucc/ucc.table.html

Click on "Legislative Status and Information on Uniform Acts" as a guide to uniform and model acts promulgated by the National Conference of Commissioners on Uniform State Laws. You can then click on "by subject matter" or "by state" to find either a list of acts by subject matter (i.e., business laws, tax laws, and civil action laws) or to find a list of uniform and model acts adopted by a specific state.

When you click on the business laws by subject matter, you can see a summary of the article, a legislative "fact sheet" on the article's purpose and to see which states have adopted it, and the NCCUSL's explanation of why states should adopt or repeal the code article.

If you have any suggestions for other sites that would be helpful on this page, or updates in these articles, please e-mail me at kirsten_guidero@mcgraw-hill.com.

The most recent print version of the UCC can also be found in the Student Study Guide to accompany this text.