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A Better Partnership


Nov 2011
November 17, 2011

Legislature Considers UCC Revisions

The Uniform Commercial Code (UCC), first published in 1952, is an attempt to harmonize the law of sales and other commercial transactions in all 50 states.

Much of Michigan’s UCC has not been revised since it was first enacted in 1962. As a result, businesses, consumers and the National Conference of Commissioners on Uniform State Laws have been working on upgrades to the UCC to reflect a changing economy in an electronic age.

On November 9, the House Committee on Banking and Finance heard testimony from witnesses supporting a three-bill package that would significantly revise Michigan’s UCC.

The most important one may be HB 5082, sponsored by Rep. Kevin Cotter (R-Mount Pleasant). It makes revisions to the UCC, article governing common carriers and warehouse workers. The bill recognizes “electronic documents of title” or electronic warehouse receipts and bills of lading.

By incorporating consistent provisions for electronic documents of title, sponsors hope these revisions will solve many of the emerging issues in the new age of electronic rights and title transfers. Moreover, adoption will make it easier for Michigan businesses to compete and participate in interstate commerce and place Michigan in line with the 40 other states that have already enacted it.

Other bills in the package include HB 5081, sponsored by Rep. Matt Huuki (R-Atlantic Mine), which adds new language to the term “conspicuous” when describing warranties and “good faith,” to mean not only “honest in fact,” but also “and the observance of reasonable commercial standards of fair dealing” The bill also allows the parties to a transaction to agree upon which jurisdiction’s laws will govern the agreement.

HB 5083, sponsored by Rep. Ellen Cogen Lipton, (D-Huntington Woods), revises the law governing the perfection of secured transactions. This bill adds a new term called “public organic record,” which is a record available to the public in its original form, an organic record of business trust filed in its original or any filing amending the original, or a record of legislation enacted by a state legislature or Congress forming an organization. In addition, the bill creates rules for collateral to which a security interest attaches within four months after the debtor moves to another jurisdiction. It also provides a format for an acceptable financing statement.

To date there has been no registered opposition to these revisions. A committee vote on this legislative package is expected in December. If you have any concerns, you should contact Warner Norcross & Judd attorney/lobbyist Jim Cavanagh ( or 517.679.7410).

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