Rules of Construction to Promote Purposes and Policies; Applicability of Supplemental Principles of Law

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. General Provisions
  5. General Provisions
  6. Rules of Construction to Promote Purposes and Policies; Applicability of Supplemental Principles of Law

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  1. This title shall be liberally construed and applied to promote its underlying purposes and policies which are:
    1. To simplify, clarify, and modernize the law governing commercial transactions;
    2. To permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and
    3. To make uniform the law among the various jurisdictions.
  2. Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause shall supplement its provisions.

(Code 1933, § 109A-1 - 102, enacted by Ga. L. 1962, p. 156, § 1; Code 1981, §11-1-103, as redesignated by Ga. L. 2015, p. 996, § 3A-1/SB 65.)

The 2015 amendment, effective January 1, 2016, redesignated former Code Section 11-1-102 as present Code Section 11-1-103 and rewrote this Code section.

Editor's notes.

- Former Code Section 11-1-103, pertaining to supplementary general principles of law applicable, was repealed by Ga. L. 2015, p. 996, § 3A-1/SB 65, effective January 1, 2016. The former Code section was based on Ga. L. 1962, p. 156, § 1.

Law reviews.

- For article on choice-of-law of contracts in Georgia, see 21 Mercer L. Rev. 389 (1970). For article discussing the resolution of conflicting claims to goods between an unsecured seller of goods and a creditor of a buyer claiming under an after-acquired property clause, see 28 Mercer L. Rev. 625 (1977). For article discussing the applicability of warranty provisions under the Uniform Commercial Code to domestic solar energy devices, see 30 Mercer L. Rev. 547 (1979). For article, "Computer Software: Does Article 2 of the Uniform Commercial Code Apply?," see 35 Emory L.J. 853 (1986). For article, "Contract Litigation and the Elite Bar in New York City, 1960-1980," see 39 Emory L.J. 413 (1990). For note, "Negotiable Promissory Notes Containing Time and Demand Provisions: The Need for Consistent Interpretation," see 19 Ga. L. Rev. 717 (1984). For note, "Enforcing Manufacturers' Warranty Exclusions Against Non-Privity Commercial Purchasers: The Need for Uniform Guidelines," see 20 Ga. L. Rev. 461 (1986).

JUDICIAL DECISIONS

Legislative intent.

- The passage of the Uniform Commercial Code by the legislature evinced an intent to have that body of law control all commercial transactions. City Dodge, Inc. v. Gardner, 232 Ga. 766, 208 S.E.2d 794 (1974).

Liberal construction.

- O.C.G.A. § 11-1-102 specifies that the Uniform Commercial Code shall be liberally construed and applied to promote its underlying purposes and policies, one of which, of course, is to broaden within the framework provided the protection of warranties beyond the original notion of privity of contract. Chastain v. Fuqua Indus., Inc., 156 Ga. App. 719, 275 S.E.2d 679 (1980).

Release of an "Assignment of Proceeds from the Sale of Dairy Products" constituted a waiver of the lienholder's security interest in milk products. Thomas v. Ralston Purina Co., 43 Bankr. 201 (Bankr. M.D. Ga. 1984).

Assignability statute not preempted by UCC.

- Lender's assignee had no standing to pursue a fraudulent transfer claim against a guarantor because such claims were not assignable under O.C.G.A. § 44-12-24; therefore, the assignee could not prevail on a legal malpractice action against attorneys who failed to timely assert a fraudulent transfer claim. O.C.G.A. § 44-12-24 was not preempted by 12 U.S.C. § 1821 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) or by O.C.G.A. § 11-1-103 of the Uniform Commercial Code. RES-GA McDonough, LLC v. Taylor English Duma LLP, 302 Ga. 444, 807 S.E.2d 381 (2017).

Customer's assent to limitations on warehouse receipt a jury question.

- In a dispute over a storage facility's storage of a customer's seed, in which the facility sought to bind the customer to limitations printed on the reverse of the facility's warehouse receipts, the trial court erred by concluding that evidence that the facility routinely mailed warehouse receipts to the facility's customers was sufficient to bind the customer as a matter of law; because the customer denied receiving the receipts, the customer's assent was a question for the jury. Turfgrass Group v. Ga. Cold Storage Co., 346 Ga. App. 659, 816 S.E.2d 716 (2018).

Cited in Maley v. National Acceptance Co., 250 F. Supp. 841 (N.D. Ga. 1966); Wooden v. Michigan Nat'l Bank, 117 Ga. App. 852, 162 S.E.2d 222 (1968); Reddick v. White Consol. Indus., Inc., 295 F. Supp. 243 (S.D. Ga. 1968); Steelman v. Associates Disct. Corp., 121 Ga. App. 649, 175 S.E.2d 62 (1970); In re Carmichael Enters., Inc., 334 F. Supp. 94 (N.D. Ga. 1971); Atkins v. Citizens & S. Nat'l Bank, 127 Ga. App. 348, 193 S.E.2d 187 (1972); In re Firth, 363 F. Supp. 369 (M.D. Ga. 1973); Barclays Bank v. Mercantile Nat'l Bank, 481 F.2d 1224 (5th Cir. 1973); Brannon v. First Nat'l Bank, 137 Ga. App. 275, 223 S.E.2d 473 (1976); Argonaut Ins. Co. v. C & S Bank, 140 Ga. App. 807, 232 S.E.2d 135 (1976); Pepsico Truck Rental, Inc. v. Eastern Foods, Inc., 145 Ga. App. 410, 243 S.E.2d 662 (1978); Booker v. Commercial Credit Corp., 9 Bankr. 710 (M.D. Ga. 1981); International Harvester Credit Corp. v. Clenny, 505 F. Supp. 983 (M.D. Ga. 1981); Varner v. Century Fin. Co., 738 F.2d 1143 (11th Cir. 1984); Dalton Point, L.P. v. Regions Bank, Inc., 287 Ga. App. 468, 651 S.E.2d 549 (2007); Ole Mexican Foods, Inc. v. Hanson Staple Co., 285 Ga. 288, 676 S.E.2d 169 (2009); SunTrust Bank v. Venable, 299 Ga. 655, 791 S.E.2d 5 (2016).

RESEARCH REFERENCES

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, §§ 6, 19. 15A Am. Jur. 2d, Commercial Code, §§ 2 et seq., 15 et seq., 30. 67 Am. Jur. 2d, Sales, §§ 70, 71.

C.J.S.

- 31 C.J.S., Estoppel, §§ 55 et seq., 58 et seq., 86. 82 C.J.S., Statutes, § 309.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 1-102.

ALR.

- What language in conveyance or contract amounts to assumption of mortgage by grantee, 101 A.L.R. 281.

Effect on negotiability of instrument, under terms of UCC § 3-104(1), of statements expressly limiting negotiability or transferability, 58 A.L.R.4th 632.


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