The Uniform Commercial Code—Bringing Stability to Business Transactions

What Is the Uniform Commercial Code | When Does It Apply?

Throughout history, as human beings have conducted business, disputes have arisen and legal rights have had to be enforced. For centuries, most of those laws were found in judicial decisions, what it referred to as the “common law.” However, in the 1890s, a movement arose to draft “uniform” laws, which attempted to incorporate much of prior common law into statutes (written laws enacted by legislatures) that states could adopt, promoting greater consistency of law across state lines. One such uniform law, which covers an expansive array of business issues, is the Uniform Commercial Code, or UCC.

If you’re in business, and you’ve been involved in a commercial dispute, there’s a good chance that you’ve been involved in issues governed by or related to the Uniform Commercial Code. The UCC has been adopted, in whole or in part, by every state and by the District of Columbia.

The Scope of the Uniform Commercial Code

The UCC has general provisions that include definitions of commercial terms, then sets forth laws in the following areas:

• Sales and lease contracts
• Negotiable instruments
• Bank deposits, bank collections and funds transfers
• Letters of credit
• Bulk transfers and sales
• Documents of title
• Investment securities
• Secured or collateralized transactions

Important Things to Understand about the Uniform Commercial Code

Though the UCC is quite expansive, it has some limits:

• Article 2, which governs sales, applies only to the sale of goods. Contracts for the provision of services are still governed by common law.
• The leases covered by the UCC are for goods only (and do not include real property).
• The bulk sales rules covered in the UCC have been repealed in almost every state.
• The rules related to secured transactions are generally related only to creditors’ rights in bankruptcy claims.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we provide comprehensive legal counsel to businesses and business owners. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

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