The Uniform Commercial Code (UCC) is a standardized set of state regulations for conducting most business and financial transactions in all fifty states and the District of Columbia.

The UCC provides a legal and contractual framework for doing business across states. While there are small variations from state to state, the UCC consists of nine articles governing various types of transactions, including banking and loans. Each of the nine articles addresses a different issue:

Article 1: General provisions establish definitions and certain parameters for how the Uniform Commercial Code (UCC) is to be applied. It was last updated in 2001.

Article 2/2a: The sale of goods, excluding real estate and service contracts. Article 2a covers leases of personal property.

Article 3: Checks, drafts, and other negotiable instruments, such as a note (a promise to pay money). An item is considered negotiable if it can be transferred to another individual and still be enforceable against the original payer.

Article 4/4a: Bank deposits and collections, which covers rules for check processing and automated inter-bank collections. Article 4a focuses on fund transfers.

Article 5: Letters of credit issued by a bank for trade facilitation.

Article 6: Bulk sales, auctions, and liquidations of assets. Most states believe this article to be obsolete. The Uniform Law Commission (ULC) has recommended its repeal, and most states have done so.

Article 7: Documents of title, including warehouse receipts, bulk sales, and bills of lading (Bol).

Article 8: Investment securities; specifically the holding of securities through intermediaries.

Article 9: Secured transactions of personal property, agricultural liens, promissory notes, consignments, and security interests.

 

 

 

Security Agreements