What is the Uniform Commercial Code?

Essentially, the Uniform Commercial Code is a filing office that allows one creditor to let other creditors know about a debtor's assets used as collateral for any secured transaction.This is done by filing a financing statement, or a public notice, with a filing office.Or, as the Uniform Commercial Code says itself:

The Uniform Commercial Code adopts the "notice filing" approach, under which an abbreviated notice is filed with the appropriate filing officer evidencing that a debtor and secured party intend to engage in a secured transaction using specified collateral as security. The actual security agreement may even be executed later. The Code became effective at midnight on June 30, 1966 , and applies to transactions entered into and events occurring after that date.
The Uniform Commercial Code is one of a number of other so-called "uniform acts" that has been passed in order to align more fully the laws governing sales and commercial transactions in all of the United States of America except for Louisiana.Louisiana has adopted most of the different sections of the Uniform Commercial Code, except for Article 2, choosing instead to use its particular state civil law tradition when it comes to governing and controlling the sale of goods.

The Uniform Commercial Code is a project of the America Law Institute and the National Conference of Commissioners on Uniform State Laws.The original Uniform Commercial Code was passed in 1966, though it has been changed, expanded, and elaborated on since that time.The Uniform Commercial Code, because it was set up and designed by private organizations, depends upon enactment by individual states if it to have any power.

Commentaries are published by the American Law Institute and the National Conference of Commissioners on Uniform State Laws in order to help clarify parts of the law.Again, though these comments are not binding, they are usually adopted by the different states and by courts arbitrating cases concerning the Uniform Commercial Code as authority.

The Uniform Commercial Code is set up in the following way.Each Article discusses a different aspect of the sale of goods and commercial exchange.

Article 1 General ProvisionsGives definitions, sets forward rules of
interpretation

Article 2 Sales Concerns sales of goods

Article 2 A Leases Concerns leases of goods

Article 3 Negotiable Instruments Banknotes and drafts

Article 4 Bank DepositsBanks, check collections

Article 5 Letters of CreditAny transaction that involves letters of credit

Article 6 Bulk Transfers and Bulk Sales Auctions and liquidations

Article 7 Warehouse Receipts, Bills of Landing, Documents of Title

Article 8 Investment SecuritiesAny security interests or other financial assets

Article 9 Secured Transactions

What the Uniform Commercial Code basically tries to do is to fill in the gaps in contracts that are made between people where they miss making a specific provision, even though it is implied.The Uniform Commercial Code also works to make sure that things move easily between states, such as check processing, bank notes, and any other commercial papers that are used on a regular basis.The Uniform Commercial Code is seen as necessary because each state has its own way of dealing with things, and all of the different laws can tie up money and transactions pretty horrendously.

The Uniform Commercial Code also works so that people don't have to use lawyers or legal formalities in business contracts.This is an effort to make it easier to do business and to disengage business from time-consuming and complicated legal maneuvers.This is the one of the most controversial positions and provisions of the Uniform Commercial Code, however, and many lawyers claim that it causes more problems than it solves.

Each state has a filing office that deals with the Uniform Commercial Code.Contact your state office for more information on filing and on open record provisions.