One of our most important assets as Newark business attorneys of The Jayson Law Group LLC is the Uniform Commercial Code (UCC). The UCC is a collection of legal rules regarding important business, or “commercial,” activities, published in 1952 after ten years in development. Created by the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI), the primary purpose of the UCC is to make business activities consistent and therefore efficient, across all U.S. states. New Jersey adopted the following Articles of the UCC to govern the business and commercial transactions within the state:

Article 1: General Provisions

Article 1 of the UCC addresses definitions and interpretation of the provisions.

Article 2: Sales

Article 2 of the UCC applies to transactions in goods, but does not apply to secured transactions.

Article 2A: Leases

Article 2A affects any transaction, regardless of form, that creates a lease.

Article 3: Negotiable Instruments

Article 3 has to do with negotiable instruments that are not money, to payment orders governed by Article 4A, or securities governed by Article 8.

Article 4: Bank Deposits and Collections

Article 4 defines that the liability of a bank, with respect to items of presentment, payment, or collection, is governed by the law of the place where the bank is located.

Article 4A: Funds Transfers

Article 4A concerns funds transfers, including any payment order issued from an originator for the purpose of making payment to the beneficiary of the order.

Article 5: Letters of Credit

Article 5 relates to letters of credit and the rights and obligations arising out of transaction involving a letter of credit.

Article 6: Bulk Transfers/Bulk Sales

Article 6 of the UCC is not adopted by New Jersey State.

Article 7: Documents of Title

Article 7 deals with storage and bailment of goods, including warehouse receipts, bills of lading, and other documents of title.

Article 8: Investment Securities

Article 8 pertains to certain types of equity interest (e.g., shares) issued by an entity that is registered as an investment company, unit investment trust, or face-amount certificate company that is registered under the federal investment company laws.

Article 9: Secured Transactions

Article 9 applies to:

1) a transaction that creates a security interest in personal property or fixtures by contract

2) an agricultural lien;

3) a sale of accounts, chattel paper, payment intangibles, or promissory notes;

4) a consignment; and

5) a security interest (with certain limitations).