The Uniform Commercial Code (UCC) is designed to coordinate and harmonize the statutes, regulations and practices in each of the 50 states relating to commercial transactions. The UCC significantly impacts the stream of commerce across the country because the vast majority of commercial activity in the United States involves more than one state. With a uniform system of commercial law enacted and in place in each of the individual states, a variety of significant benefits are realized.
Because the Uniform Commercial Code has contributed significantly to the establishing of uniform laws governing commercial transactions from one state to the next, interstate commerce is more effectively and efficiently undertaken. Prior to the UCC, interstate commerce--which constitutes the bulk of commerce in the United States--was bogged down many times because of the necessity of dealing with different legal requirements in individual states as products, components or materials traveled from one jurisdiction to another.
Standardized Commercial Expectations
An element of being able to transact business effectively is anticipating appropriately how a particular transaction is likely to be undertaken and concluded. Another benefit of the UCC is, through uniform state laws governing commercial transactions, businesses across the country can enjoy standardized commercial expectations. Speculation largely is eliminated. Planning and budgeting can continue apace without an interruption to the research, review and understanding of a different statute or regulation in a particular state.
Because the UCC requires a contract for a sale of goods over $500 be in writing, a stronger sense of commercial stability is developed. Because these agreements are in writing, the chance for a dispute surrounding the terms and conditions of a commercial agreement is reduced markedly. This ensures a greater sense of stability in the marketplace as a whole--a solid certainty in regard to commercial transactions.
Because of the commercial standardization created by the Uniform Commercial Code, other benefits of the UCC are cost reduction and price control. Thanks to the standardized commercial statutes--regulations and practices established by the UCC--business enterprises of all types have to spend less of their financial resources on implementing, undertaking and overseeing commercial transactions.
Another benefit of the Uniform Commercial Code is it allows for expedited international trade. Because of the establishment of a uniform system of commercial law in each of the states, both the export and import of goods into the United States are undertaken more efficiently, with significantly less red tape and in a more cost-effective manner.