Remedies & Liabilities

When an actor enters default under the Uniform Commercial Code (UCC), the law is clear: liability attaches, and remedies become available to the claimant.

Dishonor is not a dead end — it is the trigger for remedy.

Remedies Under the UCC

• Damages (UCC § 9-625)
  A secured party may recover losses caused by default, including actual damages and statutory penalties.
  Read UCC § 9-625 at Cornell LII

• Setoff & Adjustment
  Claims may be offset against debts owed, allowing balances to be cleared through commercial accounting.

• Commercial Liens
  Defaults can be secured against assets through liens and perfected security interests.

• Foreclosure or Repossession (UCC § 9-609)
  Secured parties may take possession or control of collateral once default is proven.

Liabilities After Dishonor

Once dishonor is logged, the actor:

• Owes penalties and damages that may escalate daily.

• Faces liens and claims enforceable in court or administratively.

• Is recorded in the Dishonor Ledger, creating permanent evidence of breach.

• Loses defenses if they fail to timely rebut sworn affidavits or notices (UCC § 3-305).

Dishonor strips away the protections of delay and procedure. It leaves only liability.

Why This Matters

Remedies and liabilities ensure that dishonor has consequences. Without them, contracts would be meaningless and commerce would collapse.

The UCC guarantees that:

• Presentments must be answered.

• Defaults create liability.

• Remedies flow to the secured party or rightful claimant.

Dishonor is not just breach — it is commercial liability. Remedies make the breach enforceable.