 |
| |
 |
| |
 |
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 eleven 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: that
many states have repealed the bulk sales article.
Article 7 applies to "domestic "documents of title," 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. 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.
Please note that the UCC varies slightly from state to state and seems to be
in a constant state of revision and adoption by the various states. It is,
therefore, very important that you seek competent help before trying to
secure your accounts receivable positions. We can not stress it enough;
UCC rules and regulations vary by state.
