Articles 3 and 4 of the Uniform Commercial Code in an Electronic Fund Transfer Environment

This Article addresses the ways in which the electronic computer has revolutionized the payments and transfer of funds mechanism, making possible paperless entry payments (PEP) and electronic fund transfers (EFT). The author discusses the legal issues and problems stemming from this new relationship among the participants. He argues that Articles 3 and 4 of the Uniform Commercial Code have not impeded development of new systems and remain viable as a legal framework governing payment and transfer transactions during the transition from paper to paperless electronic operations. The author concludes that both articles can be amended and effectively used as basic rules for allocating rights and responsibilities among the parties to electronic processing of the data and information.