The Uniform Commercial Code, a unified and inclusive codification of the statutes covering most of the major fields of commercial law, is rapidly gaining acceptance throughout the United States; it has been adopted by more than half of the states, including four out of the five states adjoining Virginia. While adoption of the Code by Virginia was deemed premature in 1956, the General Assembly at its 1962 Session recognized the trend toward universal adoption of the Code and directed the Virginia Advisory Legislative Council to make a study of the desirability of adopting, in whole or in part, the Uniform Commercial Code.

The Council selected J. C. Hutcheson, Member of the State Senate and Member of the Council, Lawrenceville, as Chairman of a Committee to make the initial study and report to the Council. Selected to serve with Senator Hutcheson as members of the Committee were the following: Fred R. Edney, Attorney, Reynolds Metals Company, Richmond; Edward F. Gee, President, State-Planters Bank of Commerce and Trusts, Richmond; Clem D. Johnston, representing Virginia warehousemen, Roanoke; John W. Landis, Babcock and Wilcox Company, Lynchburg; Charles R. McDowell, Professor of Law, Washington and Lee University, Lexington; Garnett S. Moore, Attorney and Member of the House of Delegates, Pulaski; Joseph J. Muldowney, Scott and Stringfellow, Richmond; Fred G. Pollard, Attorney and Member of the House of Delegates, Richmond; Edgar A. Prichard, Attorney, Fairfax; Hunter R. Rawlings, Jr., representing wholesale merchants, Norfolk; James S. Ritchie, Jr., representing retail merchants, Petersburg; Ronald H. Smith, Attorney, Arlington; Harry L. Snead, Jr., Professor of Law, T. C. Williams Law School, University of Richmond; Richard E. Speidel, Professor of Law, University of Virginia, Charlottesville; Charles K. Woltz, Professor of Law, University of Virginia, Charlottesville; and D. W. Woodbridge, Dean, Marshall-Wythe School of Law, College of William and Mary, Williamsburg.

The Committee organized by electing Mr. Pollard as Vice-Chairman. John B. Boat-wright, Jr. and G. M. Lapsley served as Secretary and Recording Secretary, respectively to the Committee.

The Council retained Wilfred J. Ritz, Professor of Law, Washington and Lee University, as Consultant for the purpose of reviewing the Uniform Commercial Code, comparing it with Virginia law, and preparing annotations reflecting his findings.

RECOMMENDATION AND REASONS THEREFOR

We recommend that the 1964 Session of the General Assembly enact the Uniform Commercial Code for Virginia, in the form set out in Appendix II to this Report, with a deferred effective date sufficiently long to enable complete distribution of the text and to permit Virginia attorneys and businessmen to become familiar with its provisions prior to their becoming effective.

We make this recommendation for the following reasons:

1. The Uniform Commercial Code has been adopted in twenty-eight of the fifty states, including Maryland and West Virginia, Kentucky and Tennessee and further including most of the states on the Eastern Seaboard and the Midwest with which Virginia has strong and increasingly close commercial ties. Thus, residents of Virginia need the Code in order to "speak" the same business language as the majority of those with whom they deal in interstate transactions.

2. Virginia is making strong and successful efforts to attract new industry into the State. As more business and industrial firms locate or establish branches in Virginia, a modern law embodying universally accepted commercial practices will become of ever increasing importance and will of itself serve as an attraction to business firms considering relocation or expansion within the Commonwealth.

3. Adoption of the Code will have a fourfold effect on Virginia law:

(a) It will give Virginia a law which is modern in all respects and which will replace some statutes which have become outmoded and at variance with present business practices. For instance, the Uniform Negotiable Instruments Law was adopted in Virginia in 1897 and has been basically unchanged since that date; in many respects it has proved to be not in accord with present day conditions.

(b) Such adoption will make Virginia law relating to the manufacture, sale, transportation, delivery and financing of goods more certain, it will improve the remedies available to businessmen in enforcing business contracts, and it will, as to interstate transactions, clarify many points of Jaw which are now obscure. Again using the Negotiable Instruments Law as an example, a majority of its sections have been variously interpreted by courts of different jurisdictions. The UCC brings order out of the relative chaos into which the case law on some of these sections has fallen.

(c) Particularly as to the financing of commercial transactions at every level, the Uniform Commercial Code greatly simplifies the present law of Virginia, placing its emphasis on substance rather than form, and will accordingly be most advantageous in stimulating such transactions and financing them in Virginia.

(d) The Uniform Commercial Code expands considerably the means available for the provision of credit to businessmen and will in this respect also exert a stimulating effect on the Virginia economy.