Date of this Version
SB 491, UNIVERSITY OF NEBRASKA COLLEGE OF AGRICULTURE AND HOME ECONOMICS THE AGRICULTURAL EXPERIMENT STATION
Commercial law includes such topics as sales contracts, notes, checks, shipping and storage documents, and a variety of financing instruments. Over the years much of the law on these topics has become complex, confusing, and often obsolete. The Uniform Commercial Code, or U.C.C., is designed, first, to bring about uniformity in state laws governing commerce, and second, to clarify, simplify, and modernize these laws. The Code's success in this respect is shown by the fact that it has now been adopted by almost all states. It became effective in Nebraska on September 2, 1965. Drafting of the U.C.C. dates back to 1941 when the American Law Institute joined with the National Conference of Commissioners on Uniform State Laws to sponsor a new commercial code. The latter organization has made a tremendous contribution to American law through its efforts to reduce the disparity in state laws. Perhaps the most noteworthy of the "uniform acts" which have been written so far, the U.C.C. replaces seven earlier uniform acts governing commercial transactions, all of which had become outdated or inadequate. Most of these earlier acts had lost their uniformity through variations in legislative amendments and judicial interpretations from state to state. The U.e.e. alters the older statutes in many ways, and has added numerous provisions to deal with recent legal problems. To prevent the Code itself from becoming obsolete, a permanent editorial board has been established. This board will propose amendments to the state codes when necessary, and maintain uniformity of interpretation among them. The U.C.C. is a comprehensive statute and the longest bill ever to be passed by the Nebraska Legislature. Basically it covers almost all steps of any commercial transaction involving personal property. Real estate transactions are not considered, but even these may be indirectly affected. For example, notes and other negotiable instruments, governed by the U.C.C., are frequently necessary for the sale or mortgage of real estate.
The Code is divided into ten articles, eight of which deal with specific areas of commercial law: Article 2-Sales; Article 3-Commercial Paper; Article 4-Bank Deposits and Collections; Article 5-Letters of Credit; Article 6-Bulk Transfers; Article 7-Warehouse Receipts, Bills of Lading and Other Documents of Title; Article 8-Investment Securities; Article 9-Secured Transactions.
This bulletin discusses only Articles 2 and 9, since these are the most important in day to day farm transactions. Article 2 deals with the sale of goods. "Goods" are defined to include agricultural products of every nature, including those attached to realty that are intended to be removed or severed. The article includes several major changes from prior law, particularly with reference to the formation of contracts and the rights of parties thereunder. Article 9 covers the whole range of personal property financing, including loans on crops, livestock, inventories, consumer goods and accounts receivable. Familiar documents such as the chattel mortgage and conditional sales contract are all replaced by a "security agreement" which may be tailored to fit all financing needs.