Contracts-Uniform Commerical Code (UCC)
Contracts are the foundation upon which our economic system is built. They are of such importance that a body of law has developed known as the Uniform Commercial Code. This uniform law has been adopted by most states in the Union—either in whole or in part—and lays out certain principles dealing with commercial transactions (contracts). The Uniform Commercial Code, in large measure, governs the conduct between merchants and other parties dealing with merchants.
The Uniform Commercial Code establishes legal principles that control many business transactions. For instance, when you buy a piece of exercise equipment from a sporting goods store, your legal right to return that equipment, to get replacement parts, or to file suit for a problem related to the equipment are all governed both by the warranty that comes with the product and also by the Uniform Commercial Code.
The Uniform Commercial Code also governs transactions involving security instruments and negotiable instruments. A security instrument is a document (typically filed at a courthouse or other public repository) that is designed to put the public on notice that a particular item of personal property, which may be found at a particular location, is security for a debt of the owner of that property to another person.
A security instrument in that regard is similar to a mortgage on your home. A mortgage is a type of security instrument that is designed to secure the mortgage lender in the event you do not make your monthly mortgage payments. If you fail to make your monthly mortgage payments, then the lender has the right to foreclose and to sell your property at public auction.
The Uniform Commercial Code also deals with negotiable instruments. A negotiable instrument is any instrument that may be negotiated or sold for value. For instance, a promissory note wherein one person promises to pay another a fixed amount of money is a negotiable instrument. Likewise, a check is a negotiable instrument. The Uniform Commercial Code deals with the law governing those types of instruments.
