Purpose of Uniform Commercial Code


The Uniform Commercial Code, also known as the UCC, is a large body of laws pertaining to business transactions. Particularly, the UCC applies to the sale of goods and commercial transactions. The UCC seeks to standardize and streamline the exchange of goods and harmonize commercial transactions.

History of the UCC

  • The UCC was originally published in 1952. This body of law, created by a private author, aimed to create a uniform scheme applicable to the sale of goods and commercial transactions. Prior to the 1950s, sales of goods and commercial transactions were handled differently throughout the United States. Therefore, when goods were bought and sold among various state locations, there was significant confusion when legal matters arose. As a result, there was a movement to streamline interstate issues. States were, and remain, free to adopt the UCC into its own state law. Nowadays, all of the states utilize the UCC except for Louisiana.

Transactions Covered by the UCC

  • The UCC applies to the sales of goods and commercial transactions. The sales of goods involves the buying and selling of tangible items, such as boxes of a product. Commercial transactions include primarily banking transactions and are considered debt instruments. Thus, personal, certified, bank and cashiers checks are commercial transactions. Furthermore, money market accounts are considered commercial transactions subject to the UCC.

Most Frequently Utilized UCC Sections

  • The UCC is broken down into nine articles. The most frequently cited sections of the UCC are Articles 3, 4 and 5. These UCC sections are commonly relied upon by consumers and financial institutions everyday, which is why these provisions are widely cited. Article 3 pertains to negotiable instruments, such as checks. Article 4 pertains to banking matters and Article 5 applies to letters of credit. Letters of credit include a promise by one part to another party whereby payment will be made regardless of the buyer's financial situation.

Other UCC Sections

  • Initially, Article 1 is a general overview with definitions included in the text of the Code. Article 2 is a large provision that pertains to the sale of goods. Also, Article 6 applies to bulk transfers, which applies to certain types of buyers who order significant amounts of inventory in a certain way. Article 7 applies to the carriers of goods, such as trucking companies. Article 8 applies to investments. Article 9 covers secured transactions.

Use of the UCC in Louisiana

  • While Louisiana has not adopted the UCC in its original form, it is important to note that the state has nevertheless adopted most of the UCC into its own body of civil law. A few variations, particularly in the UCC Article 2, remains unadopted and unincorporated into Louisiana's law relating to the sale of goods.


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