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Discover the Formation of UCC

Formation

There is no single Uniform Commercial Code (UCC) law. The UCC is instead a legal framework upon which each of the United States attempts to model its business laws. The concept of a Uniform Commercial Code law is based on a movement to create uniform acts.

Uniform acts, such as the UCC, began with the establishment of the Uniform Declaratory Judgments Act in 1922. Uniform acts seek to establish a national standard against which individual states can draft their laws to align.

The UCC, which seeks to establish Uniform Commercial Code law across the United States, serves the same function as other uniform acts because the UCC is a development of the idea that would be beneficial to standardize laws nationwide.

The creation of a national Uniform Commercial Code law is predicated upon each state agreeing to be bound by the UCC, which is drafted by the U.S. Uniform Law Commission (ULC). Any proposed changes submitted by the U.S. Uniform Law Commission is subject to approval by the National Conference of Commissioners on Uniform State Laws and the American Law Institute.

In 1999, the attempt to revise Article Two of the UCC met with disagreement between the American Law Institute and the National Conference of Commissioners on Uniform State Laws. The disagreement concerned the passage of a revision meant to strengthen consumer protection in digital transactions. The American Law Institute objected to some of the proposed changes to the Uniform Commercial Code law.

As a result, the proposed amendment to the UCC which would have been known as Article Two B was instead renamed the Uniform Computer Information Transactions Act and was supported by the National Conference of Commissioners on Uniform State Laws without support from the American Law Institute.

In response, the American Law Institute submitted its own attempt to create a Uniform Commercial Code law governing internet transactions, which it named the Principles of the Law of Software Contracts. The American Law Institute's measure was met with a similar response. Both attempts to create a Uniform Commercial Code law that provided protection for online interactions were grounded in a belief that the UCC as it is currently written fails to provide adequate protection for consumers in a world where commerce is happening online much more frequently.

The UCC is not just concerned with protecting consumers. An equally important aspect of the creation of a Uniform Commercial Code law is to provide businesses with rights and protections which may not be present if the development of commercial codes were left to individual states. Attempts to draft a Uniform Commercial Code law involved efforts from many prominent legal minds, practicing attorneys, sitting judges, and many individuals with a large amount of exposure to business law as it is practiced currently.

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