Question

UCC impact on supply chain management?

Answer 1

UCC main purpose was to harmonize the rules for each of nine transactional areas that pertain to commerce and commercial law. It was first published in 1952. There are many laws such as federal and state legislation, common law, regulatory bodies which can be applied to purchases but UCC is widely applied for transactions between buyer and seller.

As of 2011, 11 types of transactions that are included in UCC are:

• General provision (Article 1)

• Sales (Amended article 2)

• Leases (Amended article 2A)

• Negotiable instruments (Revised article 3)

• Bank deposits and collection (Amended article 4)

• Fund transfers (Article 4A)

• Letters of credit (Revised article 5)

• Bulk sales (Revised article 6)

• Document of title (Revised article 7)

• Investment securities (Revised article 8)

• Secured transactions (Revised article 9)

UCC governs the terms dealing with sales of goods. Article 2 of UCC applies to contracts that are primarily for sales of goods. UCC along with merchants applies to private parties but not for services.

Under UCC there are different obligations for the seller of goods when no place for delivery has agreed upon. If delivery place has not been declared in agreement then delivery place is declared as sellers business place. When there is an agreement of delivery place then there is two possibilities on sellers delivery obligation.

"Risk of loss may rise if the goods are damaged or destroyed before buyer receives the goods and neither party is to blame. Risk of loss can be determined based on agreement is parties. If the risk of loss is on buyer, then buyer has to pay full price of contract on damaged goods. If it is on sellers, then seller's responsibility for non delivering of goods. If the agreement is breach, then breach party will be liable for all uninsured loss".