Chapter 9: The Uniform Commercial Code Business Law Chapter 9: The Uniform Commercial Code

What is the Uniform Commercial Code? A nationwide code that seeks to standardize commercial transactions into a single, cohesive unit.

A Brief History of the Uniform Commercial Code The Uniform Commercial Code was created by a panel consisting of state lawmakers, law professors and attorneys.

Why the Need for a Uniform Commercial Code? Because each state followed different rules regarding bills of lading, insurance, contract law, contract conditions, remedies and a host of other issues, the overall effect was a restriction of business.

Adoption by the States Most states have adopted the Uniform Commercial Code

The Organization of the Uniform Commercial Code The Uniform Commercial Code covers a broad number of subjects. The Uniform Commercial Code covers transactions ranging from sales to secured transactions.

Articles The Uniform Commercial Code is organized into 11 articles.

Official Comments The Uniform Commercial Code comes with a series of official comments, designed to assist readers in the understanding and interpretation of various Uniform Commercial Code provisions.

Types of Transactions Covered by the Uniform Commercial Code Each Article lists the specific types of transactions that do, and do not, fall under its jurisdiction.

Types of Transactions Not Covered by the Uniform Commercial Code Probate Matters Real Estate Transactions Divorce, Family Support, Alimony, etc. Labor Relations Prenuptial agreements  

Article I of the Uniform Commercial Code Article 1 contains the general provisions and definitions.

Definitions and Basics Article 1 of the Uniform Commercial Code contains definitions of terms and phrases that apply to the code.

State law prevails The Uniform Commercial Code is state law and must be applied as any other state law.

Sources of Law For the Uniform Commercial Code There are three different places to research Uniform Commercial Code provisions. The Code itself Official Comments of the Uniform Commercial Code Body of case decisions written by appellate judges

Construing Uniform Commercial Code provisions Courts follow the same rules of construction as discussed in chapter 8

Article II of the Uniform Commercial Code Article 2 of the Uniform Commercial Code discusses the sale of goods.

Types of contracts covered by Article 2 The Article is broken down into seven parts, sometimes called chapters in some state statutory schemes.

Part 2 of Article 2. The index of Part 2 covers a broad range of topics relating to the formation of contracts for the sale of goods.

The Statute of Frauds Under the Uniform Commercial Code The Statute of Frauds is simplified under the Uniform Commercial Code

Defining “Contract” Under the Uniform Commercial Code The Uniform Commercial Code defines a contract as “limited to those relating to the present or future sale of goods.”

Remedies under Article 2 Each Article of the Uniform Commercial Code provides a list of its own remedies.

Remedies of the seller Part 7 of Article 2 lists the types of remedies available to the parties.

The seller may employ any of the following remedies: Withhold delivery of the goods Stop delivery of the goods Resell and recover damages Recover damages for nonacceptance or the price of the goods Cancel the contract

Remedies of the buyer Article 2 also provides specific remedies for buyers.

Buyer’s Remedies Cancel the contract Recover damages for nondelivery Recover the goods Obtain specific performance or use replevin to secure the goods

Replevin: A legal action to get back personal property wrongfully held by another person

Uniform Commercial Code Financing Statements A financing statement is a way for a debtor to record a security interest in personal property that is being used as collateral for a loan.