Pennsylvania became the first state to adopt the UCC in , and every other state followed suit over the next twenty years. Recognizing that drafting a combined commercial code was a massive undertaking, the ULC invited ALI to participate in the codification project, and the ALI board accepted the invitation in Over the next ten years the two organizations collaborated at drafting meetings funded in large part by a generous grant from the Maurice and Laura Falk Foundation, with additional funding contributed from law firms, banks, and businesses that recognized the need for uniform commercial laws.
The PEB, established in , monitors developments in commercial law, recommends UCC amendments and revisions when necessary, and publishes official commentary to help courts interpret specific UCC provisions. An endowment established with the original Falk Foundation grant funding and replenished with UCC publishing royalties is available to fund UCC drafting projects.
Article 1, General Provisions Uniform Commercial Code Article 1 contains definitions and general provisions applicable as default rules to transactions covered under other articles of the UCC. Article 1 was last revised in , with a few minor amendments since then to harmonize with recent revisions of other UCC articles.
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View Article 1, General Provisions. It was part of the original Uniform Commercial Code approved in Article 2 represented a revision and modernization of the Uniform Sales Act, which was originally approved by the National Conference of Commissioners on Uniform State Laws in The Uniform Law Commission and American Law Institute approved a revised Article 2 in that was not adopted in any state, and was subsequently withdrawn by both organizations in Thus the version of Article 2 is the most recent official version.
View Article 2, Sales. It was first added to the Uniform Commercial Code in and amended in A revision was approved by the Uniform Law Commission and the American Law Institute in , but was not adopted in any jurisdiction and subsequently withdrawn by both organizations in Thus, the version of Article 2A, as amended in , remains the official text. View Article 2A, Leases. Article 3, Negotiable Instruments Uniform Commercial Code Article 3 governs negotiable instruments: drafts including checks and notes representing a promise to pay a sum of money, and that have independent value because they are negotiable.
An instrument is negotiable if it can be transferred to another person and remain enforceable against the person who originally made the promise to pay. That early uniform law was revised and incorporated into the original version of the UCC in , and a further revision was approved in Finally, a set of amendments to UCC Articles 3 and 4 was approved in View Article 3, Negotiable Instruments.
California Commercial Code Section 9609
Article 4, Bank Deposits and Collections Uniform Commercial Code Article 4 governs bank deposits and collections, providing rules for check processing and automated inter-bank collections. Article 4 was completely revised in and amended in View Article 4, Bank Deposits and Collections. Amendments to Article 3, Negotiable Instruments and Article 4, Bank Deposits These amendments to Uniform Commercial Code Articles 3 and 4 update provisions dealing with payment by checks and other paper instruments to provide essential rules for new technologies and practices in payment systems.
Article 4A, Funds Transfers Uniform Commercial Code Article 4A provides a comprehensive body of law on the rights and obligations connected with fund transfers. It was added to the UCC in The amendment was necessary to conform the UCC with the federal law and associated regulations.
View Article 4A, Amendments to. Article 5, Letters of Credit Uniform Commercial Code Article 5 governs letters of credit, which are typically issued by a bank or other financial institution to its business customers in order to facilitate trade. Article 5 was updated in to address advances in technology and modern business practices. View Article 5, Letters of Credit.
Article 6, Bulk Sales Uniform Commercial Code Article 6 covers bulk sales - a topic many states have determined is obsolete. The original version of Article 6 was withdrawn by the Uniform Law Commission and the American Law Institute in and replaced with two options for every state to consider: replace Article 6 with a revised version 6, or repeal Article 6 entirely. The ULC recommends repeal, and nearly every state has followed that recommendation. View Article 6, Bulk Sales. This board has issued a number of official comments and other published papers.
Although these commentaries do not have the force of law, courts interpreting the Code often cite them as persuasive authority in determining the effect of one or more provisions. Courts interpreting the Code generally seek to harmonize their interpretations with those of other states that have adopted the same or a similar provision.
In one or another of its several revisions, the UCC has been fully enacted  with only minimal changes in 49 states, as well as in the District of Columbia , Guam ,  the Northern Mariana Islands ,  and the U. Virgin Islands.
2007 California Commercial Code
Louisiana and Puerto Rico have enacted most of the provisions of the UCC with only minimal changes, except Articles 2 and 2A, preferring instead to maintain their own civil law tradition for governing the sale and lease of goods. Although the substantive content is largely similar, some states have made structural modifications to conform to local customs. For example, Louisiana jurisprudence refers to the major subdivisions of the UCC as "chapters" instead of articles, since the term "articles" is used in that state to refer to provisions of the Louisiana Civil Code.
Arkansas has a similar arrangement as the term "article" in that state's law generally refers to a subdivision of the Arkansas Constitution. In California, they are titled "divisions" instead of articles, because in California, articles are a third- or fourth-level subdivision of a code, while divisions or parts are always the first-level subdivision.
Also, California does not allow the use of hyphens in section numbers because they are reserved for referring to ranges of sections; therefore, the hyphens used in the official UCC section numbers are dropped in the California implementation. The Uniform Commercial Code was released after ten years of development, and revisions were made to the Code from to Because no states adopted the amendments and, due to industry opposition, none were likely to, in the sponsors withdrew the amendments. As a result, the official text of the UCC now corresponds to the law that most states have enacted.
Approximately 45 states have done so. Two others have followed the alternative recommendation of revising Article 6. A major revision of Article 9, dealing primarily with transactions in which personal property is used as security for a loan or extension of credit, was enacted in all states. The revision had a uniform effective date of July 1, although in a few states it went into effect shortly after that date.
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Several states have already enacted these amendments, which have a uniform effective date of July 1, The overriding philosophy of the Uniform Commercial Code is to allow people to make the contracts they want, but to fill in any missing provisions where the agreements they make are silent.
The law also seeks to impose uniformity and streamlining of routine transactions like the processing of checks, notes, and other routine commercial paper.
The law frequently distinguishes between merchants , who customarily deal in a commodity and are presumed to know well the business they are in, and consumers , who are not. The UCC also seeks to discourage the use of legal formalities in making business contracts, in order to allow business to move forward without the intervention of lawyers or the preparation of elaborate documents.
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This last point is perhaps the most questionable part of its underlying philosophy; many [ who? One of the most confusing and fiercely litigated sections of the UCC is Section ,  which Professor Grant Gilmore called "arguably the greatest statutory mess of all time". This problem frequently arises when parties to a commercial transaction exchange routine documents like requests for proposals , invoices , purchase orders , and order confirmations, all of which may contain conflicting boilerplate provisions.
The first step in the analysis is to determine whether the UCC or the common law governs the transaction. If the UCC governs, courts will usually try to find which form constitutes the offer. Next, offeree's acceptance forms bearing the different terms is examined. One should note whether the acceptance is expressly conditional on its own terms. If it is expressly conditional, it is a counteroffer, not an acceptance. If performance is accepted after the counteroffer, even without express acceptance, under 3 , a contract will exist under only those terms on which the parties agree, together with UCC gap-fillers.
If the acceptance form does not expressly limit acceptance to its own terms, and both parties are merchants, offeror's acceptance of offeree's performance, though offeree's forms contain additional or different terms, forms a contract. At this point, if offeree's terms cannot coexist with offeror's terms, both terms are "knocked out" and UCC gap-fillers step in.
If offeree's terms are simply additional, they will be considered part of the contract unless a the offeror expressly limits acceptance to the terms of the original offer, b the new terms materially alter the original offer or c notification of objection to the new terms has already been given or is given within a reasonable time after they are promulgated by the offeree.
Because of the massive confusion engendered by Section , a revised version was promulgated in , but the revision has never been enacted by any state. This Article 8, a text of about 30 pages,  underwent important recasting in That update of the UCC treats the majority of the transfers of dematerialized securities as mere reflections of their respective initial issue held primarily by two American central securities depositories , respectively The Depository Trust Company DTC for securities issued by corporations and the Federal Reserve for securities issued by the Treasury Department.
In this centralised system, the title transfer of the securities does not take place at the time of the registration with the issuer's registrar for the account of the investor, but within the systems managed by DTC or by the Federal Reserve. Neither DTC nor the Federal Reserve hold an individual register of the transfers of property reflecting beneficial owners. The consequence for an investor is that proving ownership of its securities relies entirely on the accurate replication of the transfer recorded by DTC and FED and others in the intermediated holding system at the lower tiers of the holding chain of the securities.
Each one of these links is composed respectively of an account provider or intermediary and of an account holder. The rights created through these links are purely contractual claims: these rights are of two kinds:. This decomposition of the rights organized by Article 8 of the UCC results in preventing the investor to revindicate the security in case of bankruptcy of the account provider, that is to say the possibility to claim the security as its own asset, without being obliged to share it at its prorate value with the other creditors of the account provider.
As a consequence, it also prevents the investor from asserting its securities at the upper level of the holding chain, either up to DTC or up to a sub-custodian. Such a "security entitlement," unlike a normal ownership right, is no longer enforceable " erga omnes " to any person supposed to have the security in its custody.
The "security entitlement" is a mere relative right, therefore a contractual right.
This re-characterization of the proprietary right into a simple contractual right may enable the account provider to "re-use" the security without having to ask for the authorization of the investor. This is especially possible within the framework of temporary operations such as security lending , option to repurchase , buy to sell back or repurchase agreement.
This system the distinction between the downward holding chain which traces the way in which the security was subscribed by the investor and the horizontal and ascending chains which trace the way in which the security has been transferred or sub-deposited. Contrary to claims suggesting that Article 8 denies American investors their security rights held through intermediaries such as banks, Article 8 has also helped US negotiators during the negotiations of the Geneva Securities Convention , also known as the Unidroit Convention on Substantive Rules for Intermediated Securities.
Article 9 governs security interests in personal property as collateral to secure a debt. A creditor with a security interest is called a secured party. Fundamental concepts under Article 9 include how a security interest is created called attachment ; how to give notice of a security interest to the public, which makes the security interest enforceable against others who may claim an interest in the collateral called perfection ; when multiple claims to the same collateral exist, determining which interests prevail over others called priority ; and what remedies a secured party has if the debtor defaults in payment or performance of the secured obligation.
Article 9 does not govern security interests in real property, except fixtures to real property. Security interests in real property include mortgages , deeds of trusts , and installment land contracts. There may be significant legal issues around security interests in Bitcoin.