Legal Definitions - commercially reasonable

Definition: Commercially reasonable, adj. (Of a property sale) conducted in good faith and in accordance with commonly accepted commercial practice. Under the UCC, a sale of collateral by a secured party must be done in a commercially reasonable manner, or the obligor's liability for any deficiency may be reduced or eliminated. UCC §§ 9-610(b), 9-626.

Examples:

• When a company sells its old office furniture, it must do so in a commercially reasonable manner. This means that the company must follow commonly accepted commercial practices, such as advertising the sale and setting a fair price.
• If a bank repossesses a car from a borrower who has defaulted on their loan, the bank must sell the car in a commercially reasonable manner. This means that the bank must follow commonly accepted commercial practices, such as advertising the sale and setting a fair price. If the bank does not sell the car in a commercially reasonable manner, the borrower may not be liable for any deficiency if the sale does not cover the full amount owed on the loan.

The examples illustrate that when selling property, it is important to follow commonly accepted commercial practices to ensure that the sale is conducted in good faith and is fair to all parties involved. This helps to protect the seller from liability and ensures that the buyer is getting a fair deal.