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1.4.1 UCC Case Law

A number of services and treatises make it relatively easy to access case law under the Uniform Commercial Code (UCC). For example, the Uniform Commercial Code Reporting Service64 contains the full text of the UCC portions of a large number of UCC cases. A case digest, organized on a section-by-section basis corresponding to UCC sections, quickly leads the reader to case citations for a particular state concerning a particular UCC section.

Because the UCC is intended to be a uniform code,65 decisions from other jurisdictions interpreting a specific section, while not binding, are often given substantial weight to avoid inconsistent decisions. As one court said:

[T]he policy of the [state] Legislature in adopting the Uniform Commercial Code is that the courts of this state are to consciously attempt to give the Code a uniform interpretation not only as between the courts of this state but also with the courts of other states wherever possible. Therefore, sister-state interpretations of the Code are more than mere persuasive authority.66

The goal of uniformity also may make a court more willing to find that a UCC provision prevails over an inconsistent state statute.67

Several caveats are appropriate about the use of UCC case law. First, the UCC is not completely uniform throughout the jurisdictions which have enacted it. A number of states, when enacting the Code, have made some changes from the official text. In addition, several sections of the Code contain alternatives, allowing states to adopt different versions. If it is not apparent from a case whether the controlling statutory language varies from that of the pertinent jurisdiction, one can refer to the Uniform Laws Annotated, a West publication which identifies all state variations on a section-by-section basis, and the U.C.C. Reporting Service, which identifies the variations by state. Westlaw also annotates each section of the UCC with a list of any non-uniform amendments that states have adopted.

Second, the large majority of Article 2 and Article 2A cases involve disputes between merchants. The outcome and language in a case involving only merchants may not apply fully to a case involving a consumer-merchant dispute because of the UCC policy of treating consumers more leniently than merchants68 and because of the different equities in the two types of transactions. What is “reasonable,” “conspicuous,” or “consistent,” or what “circumstances” are pertinent, may be materially different in a commercial transaction than in a consumer transaction.69 Unfavorable decisions can sometimes be distinguished on this basis.

Footnotes

  • 64 {56} This service is published by West Group and is cited in this treatise as U.C.C. Rep. Serv. This service is also available on Westlaw and LEXIS.

  • 65 {57} U.C.C. § 1-103(a)(3) [formerly U.C.C. § 1-102(2)(c)] (one of the underlying policies of the Code is to make the law uniform among the various jurisdictions).

  • 66 {58} A.J. Armstrong, Inc. v. Janburt Embroidery Corp., 234 A.2d 737, 744 (N.J. Super. Ct. Law Div. 1967) (citation omitted). See also Gem Diamond Co. v. Klein, 43 U.C.C. Rep. Serv. 2d 568 (S.D.N.Y. 1995); Quaker Alloy Casting Co. v. Gulfco Indus., Inc., 686 F. Supp. 1319 (N.D. Ill. 1988) (federal court sitting in diversity jurisdiction need not decide choice of law question in light of the U.C.C.’s universal adoption and the parties’ and court’s citations to a variety of jurisdictions in search of persuasive authority); Tropical Jewelers, Inc. v. Nationsbank, 781 So. 2d 392 (Fla. Dist. Ct. App. 2000); Helvey v. Wabash Cty. REMC, 278 N.E.2d 608 (Ind. Ct. App. 1972) (relying on Pennsylvania U.C.C. decision to foster uniformity); Higgins v. Lauritzen, 530 N.W.2d 171 (Mich. Ct. App. 1995) (decisions from other states “highly persuasive” in light of goal of uniformity); Boulevard Bank v. Malott, 397 S.W.3d 458 (Mo. Ct. App. 2013); Dean Mach. Co. v. Union Bank, 106 S.W.3d 510 (Mo. Ct. App. 2003); Schultz v. Bank of the W., 934 P.2d 421, 424 n.3 (Or. 1997) (reliance on decisions from other states justified by legislature’s intent to further goal of uniform treatment); Edward D. Jones & Co. v. Mishler, 983 P.2d 1086 (Or. Ct. App. 1999); Commonwealth v. Nat’l Bank & Trust Co., 364 A.2d 1331 (Pa. 1976) (sister-state interpretations given “greater deference” to achieve uniformity); Fed. Signal Corp. v. Safety Factors, Inc., 886 P.2d 172 (Wash. 1994) (interpreting U.C.C. in light of goal of uniformity).

  • 67 {59} See, e.g., Int’l Periodical Distributors v. Bizmart, Inc., 768 N.E.2d 1167 (Ohio 2002).

  • 68 {60} See § 1.8.2.2, infra.

  • 69 {61} Id.