With the exception of one state, all states in the country follow the Uniform Commercial Code or UCC, including New Jersey. According to USLegal, the UCC governs buying and selling of goods and services across the state lines, hence making it easier to manage interstate sales and transactions. Complying with the UCC or any set of regulations may not always be easy, considering that it covers a wide variety of topics in business and commercial transactions. Even huge multinational companies are subject to lawsuits for violating the code.
For instance, the Bear Stearns unit of banking and financial company JPMorgan Chase & Co. recently got entangled in a lawsuit filed by SRM Global, with the latter claiming that the former committed a fraud or misrepresentation of the value of their investment securities. SRM Global claimed that JPMorgan breached the Exchange Act.
Fortunately for the financial company, the lawsuit was dismissed due to the amount of time it took for the complainant to sue them. In addition, there were no particular commercial transactions, lease of goods, or transfer of money explicitly implicating JPMorgan. This made the district court judge conclude that there were no viable proofs presented during the trials.
Even though JPMorgan managed to escape from the investment securities lawsuit, the same cannot be said for your company. A thorough understanding of the UCC is important, especially if your New Jersey business is dealing with interstate affairs. Although it is highly advisable to study the UCC during business formation, you will largely benefit from a legal counsel who knows the ins and outs of the UCC and other laws governing commercial sales and transactions.
Source: Bloomberg Businessweek, “JPMorgan’s Bear Stearns Wins Dismissal of $200 Million Suit (1),” Patricia Hurtado, Feb. 5, 2014