Question

What is the necessity of purpose for application of the UCC?

Answer 1

Answer:

The Purpose of application of the Uniform Commercial code ( UCC )

The Uniformity Commercial Code was published in 1952 after approval from the American Law Institute, The National conference of commissioners on Uniform State law, the House of Delegates and the American Bar Association. The nine articles of the UCC is a set of laws governing the sale of goods , leases of goods, negotiable instruments, bank deposits, fund transfers, letters of credit, bulk sales, warehouse receipt, bills of lading, investment securities and secured transactions.

Uniformity:

As the national economy grew at the turn of the 20th century, a need to regulate business transactions in a uniform way became necessary.with the adoption of the UCC, businesses as well as individuals are protected.

• The Uniform commercial code is a large body of regulations that governs commercial business transactions.
• The UCC's essential elements address commercial transactions through single uniform code. Statutory and common law approaches are not applicable in the case of the UCC.
• It is applicable to supplemental bodies of law.
• The states in the U.S can make variations in the UCC as desired before implementating it as law.
• The code preempts principles of common law and equity that are inconsistent with either its provisions or its purposes and policies.
• Commercial contracts made by supplemental bodies of law are acceptable only if they do not contravene the provisions and policies of the UCC.
• UCC applicable in sales, leases, negotiables instruments, bank deposites, funds transfers, letters of credit, bulk sales, warehouse receipts, bills of lading and other documents of title, investment securities, and secured transactions of commercial transactions.
• Article 2 of the UCC deals with transaction of goods
• Provisions of Article 3 of the UCC govern negotiable instruments.
• Article 4 of the UCC deals with liability of a bank action or non- action with respect to an item handled by it for purposes of presentment, payment or collection.
• Article 5 governs letter of credit.
• Article 6 deals with bulk sales.
• The UCC applies on warehouse receipts, bills of lading and other documents of title according to Article 7 of the code.
• Article 8 is concerened with the issuance, puchase, and registration of investment securities.
• Article 9 has supplanted a number of earlier laws, including the Uniform Trust Receipts Act, the Uniform Conditional Sales Act, and the Uniform Chattel Mortgage Act.

The UCC is periodically reviewed and revised by the National Conference of Commissioners on Uniform State Laws(NCCUSL), and the American Law Institute (ALI) according to new needs. The modifications are adopted by the various states according to varying need of the states an provided the effect law.