Articles 3 & 4 (2002)
Article 1 (2001) Articles 2 & 2A (2003) Articles 3 & 4 (2002) Article 7 (2003) Article 9 (1999)

 

 

For several years prior to 2008, we who teach UCC Articles 3 and 4 have had to caution students that New York (the financial and commercial capital of the Western hemisphere) and South Carolina (home to many fine golf courses) had not adopted the 1990 revisions of Article 3 and 4, on which most payments teaching materials focus much of their attention.  We also had to decide how much emphasis to give the 2002 amendments to Article 3 and 4 which, until April 15, 2008, only five states (Arkansas, Kentucky, Minnesota, Nevada, and Texas) had enacted.  By affixing his signature to SB 936 on April 15, 2008, Governor Mark Sanford made law a sweeping revision of South Carolina's Articles 3 and 4 that had the effect of enacting the 1990 revisions as amended by the 2002 amendments.  South Carolina SB 936 took effect on July 1, 2008.

As of August 1, 2010, the 2002 amendments to Articles 3 and 4 were in effect in ten states: Arkansas, Indiana, Kentucky, Minnesota, Mississippi, Nevada, New Mexico, Oklahoma (for a second time*), South Carolina, and Texas.

2009 saw three enactments: Oklahoma SB 991, which took effect on November 1, 2009; New Mexico SB 74, which took effect on January 1, 2010; and Indiana SB 501, which took effect on July 1, 2010.

Indiana SB 501 was introduced on January 15, 2009 and promptly referred to the Indiana Senate Judiciary Committee.  On February 5, the committee unanimously recommended adoption, subject to an amendment incorporating an "honesty in fact in the conduct or transaction concerned" good faith standard into Article 4.  Amended SB 501 passed the Indiana Senate on February 10.  On April 9, the House Financial Institutions Committee recommended passage with amendments that consisted almost entirely of matters unrelated to the Uniform Commercial Code.  On April 15, the Indiana House passed SB 501 with the committee's amendments, as well as additional amendments unrelated to its UCC provisions.  The Indiana Senate initially dissented to the House amendments, leading to the formation of a conference committee.  The conference committee agreed to strip the bill of all of its non-UCC provisions, and both chambers unanimously adopted the conference committee's version of HB 501, including a revised definition of "good faith" in Indiana's counterpart to  1-201(b)(20), on April 29.  Governor Mitch Daniels signed the bill into law on May 12, 2009.  It took effect on July 1, 2010.

2010 saw only one enactment -- Mississippi SB 2419, which took effect on July 1, 2010.

 

* - Oklahoma SB 1708 passed the Oklahoma Senate on March 11, 2008, and passed the Oklahoma House subject to amendment on April 16.  The Senate rejected the House amendment resulting in a conference committee, whose product eventually passed both chambers.  Governor Brad Henry signed SB 1708 on June 3.  Oklahoma SB 1708 took effect on November 1, 2008.  Twenty-three days later, a majority of the Oklahoma Supreme Court struck down SB 1708 as unconstitutional because it violated the "one subject" requirement of Article 5, 57 of the Oklahoma Constitution.  Weddington v. Henry, 2008 OK 102, 202 P.3d 143 (Okla. 2008).

Thanks to McAfee & Taft's Bob Luttrell for calling Weddington v. Henry to my attention. 

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Last modified: August 13, 2009