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Contracts/Uniform Commercial Code
The Uniform Commercial Code (UCC) is one of the uniform acts that has been promulgated in attempts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.
The UCC was the first of the Uniform Acts to be proposed, and is the longest and most elaborate of such acts. It is a joint project of the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI). Judge Herbert F. Goodrich was the Chairman of the Editorial Board of the original 1952 edition.[1] The Code, as the product of private organizations, is not itself the law, but only has the force of law if enacted by states. The ALI-NCCUSL has also established a permanent editorial board for the Code which has issued a number of official comments and other published papers concerning the Code. Although these commentaries do not have the force of law, courts interpreting the Code will often cite them as persuasive authority in determining the effect of one or more provisions.
The Code, in one or another of its several revisions, has been enacted in all of the 50 states, as well as in the District of Columbia, Guam and the U.S. Virgin Islands. Louisiana has enacted most provisions of the UCC with the exception of Article 2; preferring to maintain its own civil law tradition for governing the sale of goods. Louisiana jurisprudence refers to the sections of the UCC as "Chapters" instead of articles, since the term articles is used to refer to provisions of the state's Civil Code.
UCC Articles
The Uniform Commercial Code deals with the following subjects under consecutively numbered Articles:
| ART. | TITLE | CONTENTS |
|---|---|---|
| 1 | General Provisions | Definitions, rules of interpretation |
| 2 | Sales | Sales of goods |
| 2A | Leases | Leases of goods |
| 3 | Negotiable Instruments | Banknotes and drafts (commercial paper) |
| 4 | Bank Deposits | Banks and banking, check collection process |
| 5 | Letters of Credit | Transactions involving letters of credit |
| 6 | Bulk Transfers and Bulk Sales | Auctions and liquidations of assets |
| 7 | Warehouse Receipts, Bills of Lading and Other Documents of Title | Storage and bailment of goods |
| 8 | Investment Securities | Security interests and financial assets |
| 9 | Secured Transactions | Transactions secured by security interests |
In 2003, a major revision of Article 2 modernizing many aspects (as well as changes to Article 2A and Article 7) was proposed by the NCCUSL and the ALI. Although being considered, there are no states that have yet adopted the revised version of Article 2.
In 1989, the National Conference of Commissioners on Uniform State Laws recommended that Article 6 of the UCC, dealing with bulk sales, be repealed as obsolete. It remains in force in several jurisdictions.
A major revision of Article 9 was enacted in many states with an effective date of July 1, 2001.[2]
The controversy surrounding what is now termed the Uniform Computer Information Transactions Act (UCITA) originated in the process of revising Article 2 of the UCC. The provisions of what is now UCITA were originally meant to be "Article 2B" within a revised Article 2 on Sales. As the UCC is the only uniform law that is a joint project of NCCUSL and the ALI, both associations must agree to any revision of the UCC. The proposed final draft of Article 2B met with controversy within the ALI, and as a consequence the ALI did not grant its assent. The NCCUSL responded by renaming Article 2B and promulgating it as the UCITA. As of October 12, 2004, only Maryland and Virginia have adopted UCITA.
The overriding philosophy of the Uniform Commercial Code is to allow people to make the contracts they want, but to fill in any missing provisions where the agreements they make are silent. The law also seeks to impose uniformity and streamlining of routine transactions like the processing of checks, notes, and other routine commercial paper. The law frequently distinguishes between merchants, who customarily deal in a commodity and are presumed to know well the business they are in; and consumers, who are not.
It also seeks to discourage the use of legal formalities in making business contracts, in order to allow business to move forward without the intervention of lawyers or the preparation of elaborate documents. This last is perhaps the most questionable part of its underlying philosophy; many in the legal profession have argued that legal formalities discourage litigation by requiring some kind of ritual that provides a clear dividing line that tells people when they have made a final deal they could be sued over.
