All posts for the month December, 2011

UNIVERSAL CARING AND COMPASSION – The Real UCC

One of the great things about writing a blog, is that the writer can say whatever he or she wants to put in print.  The past twelve blogs have been about The Uniform Commercial Code—the UCC.  With Christmas upon us, I wanted to write about a different UCC, something far more important than my book.  That UCC is Universal Caring and Compassion.

When I wrote the original version of The Uniform Commercial Code Made Easy in 1977, there were two primary goals.  First, was to validate the underlying system from which the book was derived www.2ptpe.com.  By the time the book was published in 1980, this objective was accomplished with the endorsements received on the book which validated the content.

The second goal of the book was to create a law book which would put law students in contact with some of the inevitable realities of life before they actually encountered them, so they could be recognized and effectively dealt with.  While the book has not yet achieved the level of commercial success I believe is coming, I am pleased that those who have read it have indeed seen the importance of understanding where life, and certain energies lead.

In the past five years, I have had the privilege of speaking to audiences throughout the United States at a wide range of levels.  Many of the people to whom I have spoken are affluent professionals who have come to the realization that life does indeed have a starting point and a finish line.  As part of this realization, comes the analysis of the lives lived, and the legacy to be left.  Money is nice, but at the end of the day, a life predicated on the accumulation of wealth for the sake of the accumulation of wealth is a meaningless life.  Once this realization sets in, there is a burning desire to make the rest of life as significant and purposeful as possible.

The other groups to whom I have had the privilege of speaking are the abused and neglected children of America.  I have spoken to them in maximum security juvenile institutions, boot camps, group homes, boxing gyms, and low income inner city youth centers.  These children, through no fault of their own, were born into a veritable nightmare—drugs, abuse, poverty and a sense of hopelessness.  They have, in essence, been socialized into a universe which creates a perspective on life which makes all of their negative decisions appear logical.   Yet, within them is the same burning desire to change and break the cycle which has literally held them prisoner.

Which brings me to the goal of the latest publication of the book—to help children in need by creating an economic base to assist directly, and by helping others understand how much can be accomplished if we all just reach out and share what we have. At the end of the day, I believe that is why we are here— to help each other, in any way we can.  That is where true happiness derives.  That is the real UCC.

Rob LeVine

www.ucc-madeeasy.com

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by learntheucc on December 26, 2011  •  Permalink
Posted in Learn the UCC
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Posted by learntheucc on December 26, 2011

https://learntheucc.wordpress.com/2011/12/26/universal-caring-and-compassion-the-real-ucc/

Taking Aim: Lining Up the Case

As noted in the last blog, the drafters of the Uniform Commercial Code were very specific in their directions to the courts regarding the manner in which the UCC is to be interpreted:

The Uniform Commercial Code must be liberally construed and applied to promote its underlying purposes and policies…. Section 1-103(a).

The underlying purposes and policies of the Code are stated in Sections 1-103 (a)(1)(2)(3) as follows:

(1)   to simplify, clarify, and modernize the law governing commercial transactions;

(2)   to permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and

(3)   to make uniform the law among the various jurisdictions.

As an attorney and legal consultant, I have found the strategies utilized to implement these purposes and policies to be the most enjoyable component in the analytical process, in that it provides a limitless opportunity for creativity to achieve the desired result.  There are four steps involved in the process:

  1. Delineating the facts;
  2. Application of the facts to the relevant substantive provisions involved;
  3. Isolating the key provisions upon which the case will most likely be determined;
  4. Identifying a purpose or policy which supports the interpretation being advocated.

The first component is critical.  There are two basic directions that this portion of the case can take.  First, there may be two distinct versions of the facts, each of which will support a verdict if proven to be true.  Second, there may be no dispute as to the critical facts, in which case the result will depend on the interpretation of the law as applied to the facts.

In the second stage, the statute comes to life.  The UCC is, in many instances, a distillation of commercial fact patterns which have repeated themselves over time, in many cases, over hundreds of years.  A given section may contain many independent rules, which may or may not be activated when the facts are superimposed on the relevant statutory provision.  Once the applicable portions of the statute have been activated, the advocate is placed in the position of creating the arguments which will carry his or her side to victory.

The question then becomes: which of the purposes or policies can be utilized to guide the court to the desired result?  This is where the great art of advocacy comes into play.  The skilled advocate will be able to use the facts of his or her case, line it up with a particular policy, and demonstrate to the court why the result being advocated will support the policy being activated.

Once the appropriate policy is identified, the advocate directs the court’s attention the mandate of ‘liberal construction and application of the Uniform Commercial Code’ to support the policy identified, and why, in the case under consideration, the result so advocated precisely accomplishes that goal.

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by learntheucc on December 17, 2011  •  Permalink
Posted in Article 1 - General Provisions, Learn the UCC
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Posted by learntheucc on December 17, 2011

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Article 1: An Advocate’s and Drafter’s Best Friend

Article 1 of the Uniform Commercial Code is the most overlooked and critical Article of the Uniform Commercial Code.  No Article provides as much creative freedom in terms of drafting contracts and shaping litigation as Article 1. Of particular significance is the fact that Article 1 applies to all transactions under the Uniform Commercial Code, regardless of the substantive Articles which apply in a given situation.  This follows by reason of section 1-102 which states as follows:

This article applies to a transaction to the extent that it is governed by another article of the Uniform Commercial Code.

We have already discussed the very important definitions of ‘contract’ and ‘agreement’, defined in Article 1 in sections 1-201(b)(12) and 1-201(b)(3) respectively.  Likewise as to the very important connected definitions and application of ‘course of performance’, ‘course of dealing’, and ‘usage of trade’ under sections 1-303(a)(b)(c).

The next series of blogs are designed to guide the reader through a detailed analysis of Article 1.  In addition to discussing the meaning of the text, examples of the application of various sections will be undertaken.  Cases will also be used to illustrate certain concepts.

The starting point for analysis is the introductory language of section 1-103(a):

The Uniform Commercial Code must be liberally construed and applied to promote its underlying purposes and policies…. [Emphasis added]

The importance of this language cannot be overestimated.  At the outset, the drafters are giving two very important mandates to the courts; one pertaining to the construction and application of the Uniform Commercial Code; the other pertaining to the utilization of policies upon which the Uniform Commercial Code was drafted.  The court is directed, in the first instance, to ‘liberally construe and apply’ the Uniform Commercial Code; in the second instance the court is directed to do so in a manner which ‘promotes the underlying purposes and policies’ of the Uniform Commercial Code.

The advocate, within the structure of this mandate, has extraordinary ability to shape litigation and guide the court to reach the desired result.  The essence of the strategy is to line up the interpretation of relevant statutory provisions and the facts of the case with enumerated policies which support the interpretation of the position being advocated.  This positioning provides enormous flexibility and creativity for advocates and drafters alike.  The manner for utilizing these concepts will be discussed in upcoming blogs.

www.ucc-madeeasy.com

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by learntheucc on December 10, 2011  •  Permalink
Posted in Article 1 - General Provisions, Learn the UCC, Twitter
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Posted by learntheucc on December 10, 2011

https://learntheucc.wordpress.com/2011/12/10/article-1-an-advocates-and-drafters-best-friend/

The Uniform Commercial Code: The Comprehensive Approach

 As noted in Blog #9 (The Second Element of Contract: Application of the Uniform Commercial Code to the Agreement), once the parties ‘agreement’ has been delineated, the next element of the definition of ‘contract’ comes into play: application of the Uniform Commercial Code to the agreement which has been created.  Once an agreement for sale has been determined to be enforceable under Section 2-201, the next step involves the application of the Uniform Commercial Code to the totality of that agreement.

It is clear that Article 2 will apply since we are hypothesizing a sales agreement.  Article 1 will also apply since that Article applies to all transactions under the Uniform Commercial Code.  In addition, several other Articles will be activated by the typical commercial sales transaction.  First, there will generally be some shipment of goods from the seller to the buyer which will activate Article 7, documents of title.  For the shipping portion of the transaction, the primary document will be a ‘bill of lading’ as defined in Section 1-201(b)(6); if goods are stored either before or after shipment, a warehouse receipt will likely be issued which is defined in Section 1-201(b)(42).  The rights, duties and liability regarding these documents is covered under Article 7.  Once again, it is worth noting that the actual definition of the documents themselves is found in Article 1.

There will also be a payment mechanism of some type: a check or promissory note which activate Article 3; a wire transfer which activates Article 4A; or a letter of credit which activates Article 5.  If a documentary draft is involved, Section 4-104(a)(6), Article 4 will be activated.  Finally, if the transaction is financed, Article 9 will be activated as well.

The comprehensive approach to Uniform Commercial related problems, incorporates the reality that many sections of the UCC are activated in most commercial transactions.  While Article 2 may supply the key sections involved in a given Sales transaction, there are many sections in the other Articles which can create leverage and opportunities for someone drafting documents or someone involved in litigation. I have always been of the opinion that the comprehensive approach to Uniform Commercial Code matters is the best way to visualize and deal with UCC matters.

It is important to understand the reality of the comprehensive approach before undertaking the application of the substantive provisions of the UCC to the parties agreement.  The next Blog will begin the application of Article 1 to Sales transactions, in the litigation and drafting contexts.

www.ucc-madeeasy.com

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by learntheucc on December 4, 2011  •  Permalink
Posted in Article 1 - General Provisions, Article 2 - Sales transactions, Article 3 - Negotiable Instruments, Article 4 - Bank Deposits, Article 5 - Letters of Credit, Article 7 - Documents of Title, Article 9 - Secured Transactions, Learn the UCC, Twitter
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Posted by learntheucc on December 4, 2011

https://learntheucc.wordpress.com/2011/12/04/the-uniform-commercial-code-the-comprehensive-approach/