Negotiable Instruments Law
law relating to negotiable instruments, which has undergone two major
codifications in an attempt to achieve greater uniformity among the various
states. Beginning in 1897,
the original Uniform Negotiable Instruments Law (UNIL), was legislated
by all the various states, with variations and departures from the "uniform"
model for specific states. The
Uniform Commercial Code (UCC) constitutes a more comprehensive attempt
to achieve greater uniformity in the fields of sales, commercial paper,
bank deposits and collections, letters of credit, bulk transfers, warehouse
receipts, bills of lading, other documents of title, investment securities,
and secured transactions, including sales of accounts, chattel paper,
and contract rights. The UCC,
first offered to the states for adoption in 1952 and first enacted by
term "Commercial paper" of the UCC comprehends "negotiable instruments,"
the subject of the UNIL.
to the codification and enactment of the UNIL, cases growing out of litigation
concerning bills, notes and checks, were governed by case law, the so-called
law merchant - a body of rules, customs and principles that had been practiced
for centuries in England and recognized legally by the law courts beginning
in the eighteenth century, particularly by the famous English jurist,
Lord Mansfield, sitting on the Court of King's Bench.
The case law, based on the law merchant and involving litigation
in modern times as well, is still resorted to in those rare cases not
covered "on all fours" or on moot points arising under the codes.
The first statement of the principles of the law merchant was the
British Bills of Exchange Act, enacted in 1882.
The U.S. UNIL was to a larger extent influenced by the English
UCC is composed of ten articles, as follows:
1, General Provisions. Part
1, Short Title, Construction, Application and Subject Matter of the Act;
Part 2, General Definitions and Principles of Interpretation.
2, Sales. Part 1, Short
Title, General Construction and Subject Matter; Part 2, Form, Formation,
and Readjustment of Contract; Part 3, General Obligation and Construction
of Contract; Part 4, Title, Creditors, and Good Faith Purchasers; Part
5, Performance; Part 6, Breach, Repudiation, and Excuse; Part 7, Remedies.
Article 3, Commercial Paper.
Deposits and Collections. (Also
reproduced below, in view of the provision that Article 3 is subject to
the provisions of Article 4.)
5, Letters of Credit.
6, Bulk Transfers.
7, Warehouse Receipts, Bills of Lading and Other Documents of Title.
Part 1, General; Part 2, Warehouse Receipts:
Special Provisions; Part 3, Bills of Lading:
Special Provisions; Part 4, Warehouse Receipts and Bills of Lading:
General Obligations; Part 5, Warehouse Receipts and Bills of Lading;
Negotiation and Transfer; Part 6, Warehouse Receipts and Bills of Lading:
8, Investment Securities. Part
1, Short Title and General Matters; Part 2, Issue - Issuer; Part 3, Purchase;
Part 4, Registration.
Transactions: Sales of Accounts,
Contract Right and Chattel Paper.
(In views of the provision that Article 3 is subject to the provisions
also of Article 9.)
10, Effective Date and Repealer
of persisting although reduced variation in the specific provisions of
enacted state versions of the UCC, reference should be made to the particular
state law in each jurisdiction, along with the interpretive case law of
the jurisdiction, which sometimes has construed particular statutory provisions
with variation as compared with other jurisdictions.
of Articles 3, 4 and 9 of the UCC is appended herewith, for general information
and as a basis for noting the variations or departures there-from by the
particular state's statutes.