Uniform Voidable Transactions Act Adopted by ULC
Our Uniform Law Commission (ULC) unanimously adopted (this week) the Uniform Voidable Transactions Act. It supplants the Uniform Fraudulent Transfer Act. The new act still requires adoption by the individual states – one at a time (will take years, but it’s a start).
Nothing of substance (to me) was changed in the new law (from a cursory examination), except the commission took into account my always strong objection to the use of the word “fraudulent” because of the very negative connotation attached to that word – great change! Whenever I have written about fraudulent transfers, I always distinguish them from fraud by citing the two definitions in Black’s Law dictionary.
PDF of approved UVTA: 2014 UVTA_Draft
FRAUDULENT CONVEYANCE (FRAUDULENT TRANSFER):
- A transfer of property for little or no consideration, made for the purpose of hindering or delaying a creditor by putting the property beyond the creditor’s reach; a transaction by which the owner of real or personal property seeks to place the property beyond the reach of creditors. — Also termed fraud on creditors.
- In Bankruptcy: A prebankruptcy transfer or obligation made or incurred by a debtor for little or no consideration or with the actual intent to hinder, delay, or defraud a creditor. • A bankruptcy trustee may recover such a conveyance from the transferee if the requirements of 11 USCA § 548 are met.
- A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment. • Fraud is usually a tort, but in some cases (esp. when the conduct is willful) it may be a crime. — Also termed intentional fraud.
- A misrepresentation made recklessly without belief in its truth to induce another person to act.
- A tort arising from a knowing misrepresentation, concealment of material fact, or reckless misrepresentation made to induce another to act to his or her detriment.
- Unconscionable dealing; esp., in contract law, the unfair use of the power arising out of the parties’ relative positions and resulting in an unconscionable bargain.
Definitions from Black’s Law Dictionary (9th ed. 2009)