What is “Article 2” – “Sales” in the Uniform Commercial Code?
Article 2 of the Uniform Commercial Code applies to transactions involving the sale of goods, which includes most types of moveable, leased property, ranging from health care equipment to transportation assets, such as trailers or business aircraft. Article 2 also contains many provisions on warranties of goods and how to limit or disclaim them. Article 2 does not apply to any security transaction although the purported sale takes the form of an unconditional contract or sale accomplished by making a contract, called a present sale. *Tip: As a lessor, you generally buy equipment and/or take assignments of a seller’s warranty or contract rights with respect to equipment. Consequently, you need to understand Article 2. This Article may provide the terms of a sale incorporated into your leasing transaction. Lenders also should understand Article 2. The value of your collateral may be affected by rights your customer obtains under Article 2. Article 2 has been under revision since 1989 by
