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commercial transactions

Sales

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Sales Law: an overview

Transactions for the sale and leasing of goods is governed mainly by sales laws of each state. Every state, with the exception of Louisiana, has adopted Article Two of the Uniform Commercial Code (UCC) as the main body of law regulating transactions in goods. Goods are defined as all things movable and identified to the contract of the sale. See § 2-105 of the UCC. It does not include secured transactions, leases, money exchanged as the price, or real property (land and property permanently attached to a piece of land). See Secured Transactions. To be identified to the contract, a good must exist and be one of the objects that is or will be exchanged. See §§ 2-106(1) & 2-501(1) of the UCC. Transactions between merchants and consumers and those solely between merchants are regulated by Part Two. All transactions that are for more than $500 must be in writing. See § 2-201(1) of the UCC.

Secured transactions

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Secured Transaction Law: an overview

A security interest arises when, in exchange for a loan, a borrower agrees in a security agreement that the lender (the secured party) may take specified collateral owned by the borrower if he or she should default on the loan. A security interest also provides the secured party with the assurance that if the debtor bankrupts, he or she may be able to recover the value of the loan by taking possession of specified collateral instead of receiving only a portion of the borrower's property after it is divided among all creditors. See Bankruptcy.

Banking

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banking: an overview

Banks and bank accounts are regulated by both state and federal statutes. Bank accounts may be established by national and state chartered banks and savings associations. All are regulated by the law under which they were established.

Debtor and creditor

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debtor and creditor: an overview

Debtor-creditor law governs situations where one party is unable to pay a monetary debt to another. There are three types of creditors. First are those who have a lien against a particular piece of property. This property (or proceeds from its sale) must be used to satisfy the debt to the lien-creditor before it can be used to satisfy debts to other creditors. A lien may arise through statute, agreement between the parties, or judicial proceedings. See, e.g., Secured Transactions and Mortgages. Secondly, a creditor may have a priority interest. A priority arises through statutory law. If a creditor has a priority his debt must be paid when the debtor becomes insolvent before other debts. For example, Congress has granted priority to debts owed the Federal government. See Federal Tax Lien Act. The final type of creditor is one who has neither a lien against the debtor's property or is the subject of a statutory priority.

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