Exploring equitable subrogation and its independence from UCC requirements: This article addresses a bank‘s challenge claiming the UCC supplants equitable subrogation rights. Backed by case law and UCC §1-103, it confirms that subrogation arises by equity, not contract, ensuring sureties’ priority over security interests without UCC filings. Learn how federal and state courts affirm these principles and the limitations of UCC Title 9 in such contexts.
The Uniform Commercial Code (UCC) and equity law provide distinct frameworks for resolving disputes and enforcing obligations. Equity law focuses on fairness and flexibility, often stepping in when strict legal rules lead to unjust outcomes. Conversely, the UCC brings structure and predictability to commercial transactions while incorporating equitable principles to ensure fairness in its application. This article explores how the UCC integrates equity, examines the strengths and weaknesses of each system, and highlights key provisions like UCC §§ 1-103, 2-202, 2-203, 2-204, 2-206, 2-302, 3-303, 3-311, 3-603, 3-604, and others.
ALL bank accounts have two sides to them. A Public (liabilities) side and a Private (assets) side, as substantiated by […]