The Oklahoma Bar Journal January 2023

transaction must be memorialized on paper – this will recognize elec tronic documents and transactions. ARTICLES 3, 4 AND 4A The amendments to Articles 3, 4 and 4A are modest and few and relate primarily to the transmis sion of electronic check images and the impact of choice of law provisions in a negotiable instru ment. Most of the new text is in the official comments, which generally are not enacted by the states and do not become part of the statute but, nonetheless, are persuasive authority. Among the statutory changes, Section 3-104 is amended to make more clear that a choice of law clause does not render an instru ment nonnegotiable. Amended Section 3-105 clarifies the issuance of an electronic image of an item. Existing Subsections 3-401(b) and 3-604(c) are deleted as unnec essary in view of the amended definition of “sign” in Article 1. Subsection 3-604(a) is amended to make clear that the destruction of a check in conjunction with a trun cation or imaging process does not discharge the obligation to pay the instrument. In Article 4A, the definition of “payment order” in Section 4A-103 is revised slightly to substitute the modern UCC term “record” in place of the more cumbersome present language. There are simi lar minor amendments (using the term “record”) in Sections 4A-202, 4A-203, 4A-211 and 4A-305 (and in various official comments). Section 4A-201 is amended slightly to clar ify the requirements for a security procedure. The proposed amendments to Articles 3, 4 and 4A do not have any adverse impact on present Oklahoma law and primarily are clarifications consistent with present law.

currencies, like bitcoin, are not “money” for purposes of the UCC. Amended Subsection (27) updates the definition of “person” to clarify that a “protected series,” e.g. , a series LLC, is a person for UCC purposes. Amended Subsection (36) updates the definition of “send” for consistency with other provisions of the UCC that substitute the term “record” for “writing” and for further consistency with the rest of the UCC regarding transmission of electronic records. Subsection (37) is updated. The present definition of “sign” is amended to give “sign,” “signed,” “signing” and “signature” consistent meanings. The substance of the definition is updated to include electronic signatures. The amendment to Section 1-204 adds the new Article 12 to the list of exclusions from the default rule of Section 1-204 for determination of whether value has been given. The present Subsection (b) of Oklahoma’s Section 1-301 provides that this section is subject to specific choice of law provisions contained in other UCC articles that apply to the extent a trans action falls within the scope of one of those provisions. The amendment adds the new Article 12 choice of law provision (Section 12-107) to the list of choice of law provisions in the uniform text and creates a new para graph (8) in Section 1-301(b) of the uniform text. Amended Section 1-306 is revised for consistency with the updated definition of “sign” in Section 1-201(b)(37).

ARTICLE 2

If applied in Oklahoma, the amendments to Section 2-102 will modify existing case law in Oklahoma by recognizing “hybrid transactions” and applying por tions of Article 2 to such trans actions. A hybrid transaction is defined in amended Section 2-102 as one involving a sale of goods, as well as “(a) the provision of services; (b) a lease of other goods; or (c) a sale, lease, or license of property other than goods.” In the absence of these amend ments, under present Oklahoma law, the courts have adopted the “predominate purpose” test and will “consider[ ] the transaction in its entirety and determine[ ] whether the goods or services aspect of the contract predomi nates.” 1 If the “non-goods” aspect of the contract predominates, the court will conclude that Article 2 does not apply to any part of the transaction. 2 By recognizing a hybrid transaction as such under Article 2, the amendments allow application of those provisions of Article 2 that relate primarily to the sale-of-goods aspect of a transac tion – even when those aspects do not predominate. In such a case, provisions of Article 2 relating to the transaction “as a whole” will not apply. When the sale-of-goods aspect of a transaction does predominate, Article 2 will apply to the transac tion, but the amendments do not preclude application of other laws to any “non-goods” aspects of the transaction. The amendment pro vides for application of other laws “in appropriate circumstances,” which should allow a court flexibil ity when applying the most suitable law to the sale of a unique product. Amendments to Sections 2-201, 2-202, 2-203, 2-205 and 2-209 provide for replacement of the term “writing” with “record” to eliminate the impression that a

26 | JANUARY 2023

THE OKLAHOMA BAR JOURNAL