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What are basics of the Universal Commercial Code?

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Quick Answer

The Uniform Commercial Code provides model legal rules and regulations dealing with commercial and business transactions, notes US Legal. The Code covers every facet of transactions, including creation of contracts, sales, leases, bank deposits and bills of lading. The Code becomes law only when enacted by a state government. As of 2015, all 50 states have variations of the Code, but not every state adopted every article of the model code or updated state laws when the code was revised.

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Full Answer

The Code consists of nine articles, as noted by a copy of the Code from Cornell University's Legal Information Institute. Article 1 deals with general provisions, Article 2 with sales and leases, Article 3 with negotiable instruments, and Article 4 with banking and funds transfer procedures. Article 5 concerns letters of credit, Article 6 addresses bulk sales, Article 7 covers documentation of titles, Article 8 deals with investment securities, and Article 9 addresses secured transactions. State variations of the Code retain the article numbers.

In addition to the states, variations of the Code have been adopted in Washington D.C., Puerto Rico and the Virgin Islands, according to Duke University School of Law. Experts in commercial law draft revisions of the Code in coordination with the American Law Institute, with revisions entering the Code after approval by the Uniform Law Commissioners.

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