Uniform Commercial Code

Also found in: Financial, Acronyms, Wikipedia.

Uniform Commercial Code

A general and inclusive group of laws adopted, at least partially, by all the states to further uniformity and fair dealing in business and commercial transactions.

The Uniform Commercial Code (UCC) is a set of suggested laws relating to commercial transactions. The UCC was one of many uniform codes that grew out of a late nineteenth-century movement toward uniformity among state laws. In 1890 the American Bar Association, an association of lawyers, proposed that states identify areas of law that could be made uniform throughout the nation, prepare lists of such areas, and suggest appropriate legislative changes. In 1892 the National Conference of Commissioners on Uniform State Laws (NCCUSL) met for the first time in Saratoga, New York. Only seven states sent representatives to the meeting.

In 1986 the NCCUSL offered up its first act, the Uniform Negotiable Instruments Act. The NCCUSL drafted a variety of other Uniform Acts. Some of these dealt with commerce, including the Uniform Conditional Sales Act and the Uniform Trust Receipts Act. The uniform acts on commercial issues were fragmented by the 1930s and in 1940, the NCCUSL proposed revising the commerce-oriented uniform codes and combining them into one uniform set of model laws. In 1941 the American Law Institute (ALI) joined the discussion, and over the next several years lawyers, judges, and professors in the ALI and NCCUSL prepared a number of drafts of the Uniform Commercial Code.

In September 1951 a final draft of the UCC was completed and approved by the American Law Institute (ALI) and the NCCUSL, and then by the House of Delegates of the American Bar Association. After some additional amendments and changes, the official edition, with explanatory comments, was published in 1952. Pennsylvania was the first state to adopt the UCC, followed by Massachusetts. By 1967 the District of Columbia and all the states, with the exception of Louisiana, had adopted the UCC in whole or in part. Louisiana eventually adopted all the articles in the UCC except articles 2 and 2A.

The UCC is divided into nine articles, each containing provisions that relate to a specific area of Commercial Law. Article 1, General Provisions, provides definitions and general principles that apply to the entire code. Article 2 covers the sale of goods. Article 3, Commercial Paper, addresses negotiable instruments, such as promissory notes and checks. Article 4 deals with banks and their handling of checks and other financial documents. Article 5 provides model laws on letters of credit, which are promises by a bank or some other party to pay the purchases of a buyer without delay and without reference to the buyer's financial solvency. Article 6, on bulk transfers, imposes an obligation on buyers who order the major part of the inventory for certain types of businesses. Most notably, article 6 provisions require that such buyers notify creditors of the seller of the inventory so that creditors can take steps to see that the seller pays her debts when she receives payments from the buyer. Article 7 offers rules on the relationships between buyers and sellers and any transporters of goods, called carriers. These rules primarily cover the issuance and transfer of warehouse receipts and bills of lading. A bill of lading is a document showing that the carrier has delivered an item to a buyer. Article 8 contains rules on the issuance and transfer of stocks, bonds, and other investment Securities. Article 9, Secured Transactions, covers security interests in real property. A security interest is a partial or total claim to a piece of property to secure the performance of some obligation, usually the payment of a debt. This article identifies when and how a secured interest may be created and the rights of the creditor to foreclose on the property if the debtor defaults on his obligation. The article also establishes which creditors can collect first from a defaulting debtor.

The ALI and the NCCUSL periodically review and revise the UCC. Since the code was originally devised, the House of Delegates of the American Bar Association has approved two additional articles: article 2A on Personal Property leases, and article 4A on fund transfers. Article 2A establishes model rules for the leasing or renting of personal property (as opposed to real property, such as houses and apartments). Article 4A covers transfers of funds from one party to another party through a bank. This article is intended to address the issues that arise with the use of new technologies for handling money.

Most states have adopted at least some of the provisions in the UCC. The least popular article has been article 6 on bulk transfers. These provisions require the reporting of payments made, which many legislators consider an unnecessary intrusion on commercial relationships.

Further readings

Benfield, Marion W., Jr., and William D. Hawkland. 1992. Sales: Cases and Materials. 3d ed. Westbury, N.Y.: Foundation Press.

"Annual Survey of Commercial Law: The Uniform Commercial Code Survey." 2003. Business Lawyer 58 (August).Cooper, Corinne, ed. 2000. The Portable UCC. 3d ed. Chicago: Section of Business Law, American Bar Association

Miller, Frederick H., and Alvin C. Harrell. 2002. The ABCs of the UCC. Related Insolvency Law. Chicago: American Bar Association.


Commissioners on Uniform Laws; Contracts; Llewellyn, Karl Nickerson; Model Acts; Sales Law.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

Uniform Commercial Code

n. a set of statutes governing the conduct of business, sales, warranties, negotiable instruments, loans secured by personal property, and other commercial matters, which has been adopted with minor variations by all states except Louisiana. (See: UCC-1)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.

Uniform Commercial Code

a code of rules, proposed in the 1950s, adopted by almost all the states in the USA, albeit with variations. It applies to almost all sales of goods.
Collins Dictionary of Law © W.J. Stewart, 2006
References in periodicals archive ?
However, some five states still have not gotten around to adopting the 1977 amendments to Article 8 of the Uniform Commercial Code, a fact that was used in promoting the federal legislation.
Under existing Article 9 of the Uniform Commercial Code, if a certificate of deposit is an instrument, a secured creditor can perfect a security interest only by taking possession.
* Addresses opinions on particular substantive areas of commercial practice, including opinions with respect to securities, opinions with respect to collateral under the Uniform Commercial Code and opinions with respect to real estate transactions;
Under this law, online "electronic" signatures on legal agreements or commercial transactions have the same legal status as a written signature, thereby altering the requirement under the Statute of Frauds and Uniform Commercial Code Article 2, which states that all transactions for goods over $500 must be in writing.
West Publishing has added the Freedom of Information Act Guide database (FORA-GUIDE) and the Uniform Commercial Code Filing Guide database (UCCGUIDE) to WESTLAW.
In sections on negotiable instruments, check collection, and other payment systems, he discusses such topics as specialized negotiable instruments, basic liability rules for negotiable instruments, underlying obligations: suspension and discharge, specialized Uniform Commercial Code loss allocation rules for negotiable instruments, and the law of credit cards and debit cards.
Greenfield, a partner with the Firm, is nationally recognized in bankruptcy law, including creditors'/debtors' rights, insolvency and reorganization as well as in bankruptcy litigation, including receiverships, mechanic's liens, collections, lease defaults, and matters involving the Uniform Commercial Code.
School of Law) offer a casebook examining the law of Article 9 of the US Uniform Commercial Code governing secured transactions.
"It updates and consolidates in a single integrated report all of the legal opinion standards that have previously been published by the Business Law Section and the RPPTL Section, including the Business Law Section's 1991 report on standards for opinions of Florida counsel in commercial transactions, the supplement to the 1991 report that was issued by the Business Law Section in 1996 on opinions under the Uniform Commercial Code, and the supplements to the 1991 report that were issued by the RPPTL Section in 1996 and 2004 relating to opinions in real estate transactions."
UCC is the Uniform Commercial Code, a financing statement that attaches the real estate connected with the personal property lien.
Sections 2-507 and 2-511 of the Uniform Commercial Code, read together, grant a cash seller the right to reclaim goods sold as part of a COD or CBD transaction where the check tendered in payment for the goods is dishonored.

Full browser ?