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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.