ARTICLE 6 OF THE UNIFORM COMMERCIAL CODE:
RECOMMENDATION TO THE LEGISLATURE

In 1994, the Michigan Law Revision Commission recommended to the Legislature that it repeal Article 6, Bulk Sales, of the Uniform Commercial Code. M.C.L. §§ 440.6101-.6111. The Legislature took no action with regard to that recommendation. In 1997, the Commission received a report from Dawn Copley, a law student at Wayne State University Law School, prepared under the supervision of Professor John Dolan of Wayne State. It is their recommendation that Michigan repeal Article 6. To date, 35 states and territories have done so pursuant to the recommendation of the National Commission on Uniform State Laws.

The reasons for recommending repeal in 1994 are as valid today as they were then. Among those reasons are the following:

  1. The bulk transfer law can be a trap for unwary buyers who fail to comply with an obscure provision of law.
  2. The penalties for noncompliance are harsh.
  3. The costs of compliance can be high and add unnecessary transaction costs.
  4. Unsecured creditors of a seller in a bulk transfer are adequately protected under fraudulent conveyance legislation, and secured creditors do not need Article 6 for protection.

Recommendation

The Commission again recommends to the Legislature that it repeal Article 6 of the UCC.