A broad concept that describes the SUBSTANTIVE LAW that governs transactions between business entities, with the exception of maritime transportation of goods (regulated by ADMIRALTY AND MARITIME LAW). Commercial law includes all aspects of business, including advertising and marketing, collections and BANKRUPTCY, banking, 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 spectrum of issues that arise in commercial transactions. These articles govern the following: sales of goods, leases of goods, negotiable instruments, 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 general. 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 business, such as contracts for services. INTERNATIONAL 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 constant change, commercial laws generally have remained static. The COMMISSIONERS ON UNIFORM LAWS, in conjunction with the American Law Institute and other organizations, periodically 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)...