The UCC is a comprehensive set of laws governing commercial transactions in the United States. It is a joint project of the Uniform Law Commission and the American Law Institute.
A primary purpose of the UCC is to facilitate the predictability and efficiency of business activities by making (or attempting to make) business laws consistent state-by-state. However, until enacted by a state as law, the UCC is not binding law. But in today’s world, all 50 states have enacted at least some form of the UCC. The UCC’s goal is to create a “uniform” set of commercial laws, but states may have subtle differences in their enacted version of the UCC.
Michigan’s UCC was enacted at Michigan Public Act 174 of 1962, MCL § 440.1101 et seq. It has been amended a handful of times since its inception, with the most recent modification occurring in September 1992. Both Michigan state courts and federal courts interpret and apply the UCC as issues arise during litigation.
The UCC is organized into separate articles. Each article has a different theme or topic. Some of the more common articles include Article 2 (the sale of goods), Article 2A (leases), and Article 9 (secured transactions).
Article 2 relates to contracts involving the sale of goods. A “good” is defined as a thing which is “movable.” Examples include automotive parts and components, commodities like steel, your cell phone, and other widgets. By contrast, real property, like your home, is not a “good” under Article 2.
The UCC also provides default rules or “gap fillers” to certain contracts where the contracting parties might not otherwise address an issue. For example, UCC 2-314, codified in Michigan at MCL § 440.2314, creates implied warranties affecting goods (unless excluded or modified as further set forth in Article 2). Such implied warranties require goods to be merchantable, to be fit for their ordinary purposes for which such goods are used. Contracting parties can modify these rules. If they don’t, then the UCC operates by law to “fill the gap” and impose a legal duty.
Over time, as businesses and technologies advance, the drafters of the UCC make amendments to the UCC. For example, amendments proposed in 2022 address emerging technologies, including virtual currencies, blockchain, artificial intelligence, and other technological developments. Given the recency of these new amendments, as of present, no state has yet to introduce legislation adopting the amendments.
This blog post is informational only. It is not and does not constitute legal advice.