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Uniform Commercial Code
Businesses perform commercial transactions everyday, keeping the legality and trusted
nature of such transactions is regulated by the Uniform Commercial Code (UCC). The Uniform
Commercial Code (UCC) is defined as a very large collection of legal rules regarding many
important business activities. Any transaction between multiple parties from a larger business is
subject to the guidelines set by UCC. It may cause some issues in commercial transaction, this is
were some business handling take a different form, many of which can be can still be legal, but
have no need to be covered. There are nine articles of UCC, which provides information about
the UCC or covers a specific kind of contract law.
The UCC was established in 1952, it is one of a series of Uniform Acts developed as
legislation with the purpose of harmonizing the rules of sales and other economic activities in the
United States. The entirety of the United States follows the UCC, it’s regulated easier by the fact
that its structure allows businesses in various states to trade with each other. The articles of UCC
allow businesses and consumers understand what is expected of one another through the many
forms of contracts. Those nine articles total out to eleven when the sub-articles are added in, all
eleven are, general provisions, sales, leases, negotiable instruments, bank deposits and
collections, funds transfers, letters of credit, bulk sales, documents of title, investment securities,
and secured transactions.
The articles were ratified and amended as time changed the forms of business
transactions, the last amended article was 4A (Funds Transfer) in 2012, because federal laws and
regulations changed forcing the article to conform. Each article has a specific aspect of a sale it
pr, Article 1 is just general provisions, which are the default rules transactions should follow.
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Article 2 governs the sale of goods, rules are set for transactions between sellers/consumers.
Article 2A governs leases of personal property, not the lease of personal homes and living, but
the lease of equipment that consumers need that’s either broken or outdated. Article 3 governs
negotiable instruments which is a specific piece of paper that can be moved from one person to
another and, eventually, traded for money.
Article 4 governs bank deposits and collections, providing rules for check processing and
automated inter-bank collections. Article 4A governs funds transfer, regulating payment and
transfer between the payer and the payee. Article 5 governs letters of credit, which are issued by
banks to business customers to serve trade. Article 6 oversees bulk sales, giving protection to
transactions during auctions and liquidations of assets. Giving the volatile nature of bulk sales
provisions have to be understood due to the verbal/physical nature of such transactions.
