COMMERCIAL LAW
A broad concept that describes the SUBSTANTIVE LAW that governs transactions between business entities, with the exception of maritime trans-
portation of goods (regulated by ADMIRALTY AND
MARITIME LAW). Commercial law includes all
aspects of business, including advertising and
marketing, collections and BANKRUPTCY, bank-
ing, contracts, negotiable instruments, SECURED
TRANSACTIONS, and trade in general. It covers
both domestic and foreign trade; it also regulates
trade between states.
The term commercial law describes a wide
body of laws that govern business transactions.
The UNIFORM COMMERCIAL CODE (UCC),
which has been adopted in part by every state in
the United States, is the primary authority that
governs commercial transactions. The UCC is
divided into nine articles, covering a broad spec-
trum of issues that arise in commercial transac-
tions. These articles govern the following: sales
of goods, leases of goods, negotiable instru-
ments, bank deposits, fund transfers, letters of
credit, bulk sales, warehouse receipts, bills of
lading, investment SECURITIES, and secured
transactions.
A number of other laws also govern business
transactions. For instance, although Article 4 of
the UCC governs bank deposits, federal law in
the form of statutes and regulations prescribe
requirements for BANKS AND BANKING in gen-
eral. Likewise, federal law governs such issues
related to commercial law as bankruptcy and
debt collection. Many of the federal laws related
to commercial transactions are codified in title
15 of the U.S. Code.
Although the UCC controls most aspects of
domestic commercial law, the COMMON LAW of
contracts, as well as other state laws, still applies
to some types of transactions that arise in busi-
ness, such as contracts for services. INTERNA-
TIONAL LAW is likewise an important component
of this area. For instance, the United Nations
Convention on Contracts for the International
Sale of Goods has been ratified by approximately
62 nations, representing two-thirds of the world’s
trade.
Though the business world undergoes con-
stant change, commercial laws generally have
remained static. The COMMISSIONERS ON UNI-
FORM LAWS, in conjunction with the American
Law Institute and other organizations, periodi-
cally revises the articles of the UCC. However,
the revision process of the UCC is typically slow
and deliberate. Recent revisions to Article 2
(governing the sale of goods) and Article 9 (gov-
erning secured transactions) took several years
to complete. Thus, not only is commercial law
substantially uniform throughout the United
States, but also those who conduct business can
proceed with commercial transactions with
some degree of certainty as to the law that gov-
erns those transactions.
CROSS-REFERENCES
Banks and Banking; Check; Contracts; Mercantile; Merchantable; North American Free Trade Agreement; Promissory Note; Sales Law; Uniform Commercial Code;Warranty.
