Uniform Commercial Code (UCC)

Uniform Commercial Code (UCC)

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing commercial transactions in the United States. It was created to standardize and harmonize laws across states, facilitating uniformity in business dealings and reducing legal uncertainties.

The UCC consists of several articles that address various aspects of commercial law, including sales, leases, negotiable instruments, bank deposits, letters of credit, investment securities, and secured transactions. Each article provides specific rules and regulations that businesses must follow when engaging in transactions covered by the UCC.

For example, Article 2 governs the sale of goods, outlining the rights and obligations of buyers and sellers, including contract formation, performance, and remedies for breach. Article 9 deals with secured transactions, explaining how creditors can secure loans with collateral and the rights of parties in case of default.

By adopting the UCC, states aim to create a cohesive legal framework that enhances predictability in commercial transactions, thereby promoting interstate commerce. The UCC is not federal law; instead, it relies on state legislatures to enact it, which can lead to variations in its application across different jurisdictions.