The UCC primarily governs transactions involving the sale of goods, leases, secured transactions, and negotiable instruments. It is designed to create a standardized framework for these specific commercial activities.

Transactions covered by the UCC:

• Sales of Goods: The UCC’s “Article 2” governs the sale of goods, including contracts for the sale of tangible personal property.
• Leases: The UCC’s “Article 2A” covers commercial leases of goods, such as equipment, machinery, or vehicles.
• Secured Transactions: “Article 9” of the UCC addresses transactions where goods are used as collateral for loans or financing, including secured loans, mortgages on personal property, and other forms of secured credit.
• Negotiable Instruments: The UCC’s “Article 3” governs negotiable instruments like checks, drafts, and promissory notes, establishing rules for their creation, transfer, and payment.

Transactions typically not covered by the UCC:

• Real Estate Transactions: Real estate transactions are typically governed by separate New York State real estate laws, not the UCC.
• Service Contracts: Contracts primarily involving the performance of services rather than the sale of goods are generally not subject to the UCC.
• Insurance Contracts: Insurance policies are typically subject to specific state insurance laws and regulations, not the UCC.
• Employment Contracts: Contracts between employers and employees are governed by state and federal labor laws, not the UCC.

Article 9 governs secured transactions and the procedures used if a debtor defaults on debt, including the creditor repossessing the secured property. Article 9 lists the many loans secured by various types of collateral, including credit card receivables, electronic chattel paper, accounts receivable, and business inventory. Potentially, there will be a push by the Federal Reserve toward decreasing the use of real estate for collateral for commercial loans and, instead, using other types of securities as collateral.

If you are unsure whether the UCC applies to a specific transaction, you must contact our experienced UCC lawyers. We will analyze the nature of the transaction, the parties involved, and the subject matter to determine whether the UCC’s provisions apply.

The UCC and New York law generally require contracts for the sale of goods worth $500 or more to be in writing. However, there are exceptions to this rule, such as:

• Merchant’s Confirmation: If two merchants exchange written agreement confirmations, they can be binding even if the original deal wasn’t in writing.
• Admissions: If a party admits in court that they entered into an oral contract, that admission can be used to enforce the agreement.
• Partial Performance: If one party begins performing under an oral contract, that performance can be evidence of the agreement’s existence.
• Promissory Estoppel: If one party relies on another party’s unambiguous promise to their detriment, the promise may be binding.
• Terminable at Will: A contract is enforceable if either party can withdraw from an oral agreement at any time.

It’s best to consult an attorney to determine if an oral contract can be enforced in your situation.