According to the Ohio Secretary of State, the Uniform Commercial Code acts as a comprehensive set of laws that governs all commercial transactions in the U.S. This is not federal law, rather it is a uniformly adopted state law. Since the UCC is universally adopted, commercial entities can enter contracts with the assurance that the terms will be enforced the same way in every U.S. jurisdiction. This certainty enables growth for businesses and the U.S. economy.
History of the UCC in the U.S.
In 1982, the Uniform Law Commission was established to develop uniform commercial laws in the U.S. A series of uniform commercial laws was passed between 1896 and 1918. In 1942, the ULC partnered with the American Law Institute to pass a comprehensive code for all commercial transactions. In 1951, the UCC was offered for consideration to all the states. Pennsylvania adopted the UCC in ‘53 and the rest of the states followed suit over the next two decades.
More on the UCC in the U.S.
The UCC may be described as the backbone of American commerce. This joint venture between the ULC and ALI to establish universal business law was funded by law firms, banks and businesses who endorsed the need for uniform commercial laws. Today, the UCC is governed by the Permanent Editorial Board for the Uniform Commercial Code, composed of appointees chosen by the ULC and ALI.
Since 1961, the PEB has been tasked with monitoring developments in commercial law, recommending revisions and amendments to the UCC, and publishing official commentary to help courts interpret different provisions. The UCC comprises 12 articles focused on sales, bulk sales, leases, negotiable instruments, bank transactions, letters of credit, title documents, investment securities and secured transactions. Article 12 and the 2022 amendments address policies for emerging technologies like virtual currencies, digital assets and artificial intelligence.