Commercial Law Commons^™

On The Efficiency Of Secured Lending, David G. Carlson

Articles

The article challenges the Law and Economics movement's assertion that secured lending is inefficient, arguing instead that it can be efficient by reducing risk and lowering the cost of credit. Carlson contests the movement's reliance on outdated theories like the Modigliani-Miller model, which he believes fails to account for real-world factors such as time and risk. He posits that secured lending can prevent debtor misbehavior, thereby making credit more accessible and reducing risks for creditors.

Work And Play In Revising Article 9 (Symposium On The Revision Of Article 9 Of The Uniform Commercial Code), James J. White

Articles

For Professors Harris and Mooney the time has come to distinguish between work and play. Debating whether security is efficient is play. Revising Article 9 is work. Even Professor Schwartz does not argue for the abolition of Article 9; he merely reiterates the "puzzle" of secured credit and argues in his playful fashion that security might not be efficient.' Were it not for the fact that this debate might give us some insights about certain priority rules (such as those having to do with purchase money), it would be pure intellectual masturbation, a game with no purpose other than to …

Is Article 8 Finally Ready This Time? The Radical Reform Of Secured Lending On Wall Street, Jeanne L. Schroeder

Articles

The article critiques the 1977 proposed amendments to Articles 8 and 9 of the Uniform Commercial Code (UCC), arguing that while they aim to modernize securities law by replacing the outdated physical possession metaphor with the concept of "control," they fail to adequately address the complexities of indirect holdings through intermediaries. The revisions introduce "supernegotiability," prioritizing secured creditors over customers, but raise ethical concerns about rewarding dishonest behavior and potentially undermining consumer protections. The article concludes that while the changes improve market efficiency and clarity, further refinements are needed to balance the interests of all stakeholders.

Postpetition Security Interests Under The Bankruptcy Code, David G. Carlson

Articles

Section 364(c) and (d) of the Bankruptcy Code provides for the creation of security interests in real and personal property under federal law. In this Article, David Gray Carlson discusses the quality and nature of these federal security interests, their remarkable immunity from reversal on appeal, and the ability of postpetition lenders to obtain preferences over other creditors through "cross-collateralization" clauses and the like.

Suretyship On The Fringe: Suretyship By Operation Of Law And By Analogy, D. Benjamin Beard

Articles

No abstract provided.

Revising Article 9 To Reduce Wasteful Litigation, James J. White

Articles

For reasons that are unclear to me, the committees reviewing the articles of the Uniform Commercial Code and drafting revisions are congenitally conservative. Perhaps these committees take their charge too seriously, namely, to revise, not to revolutionize. Perhaps their intimate knowledge of the subject matter exaggerates the importance of each section and consequently magnifies the apparent size of every change. In any case, my own experience with two such committees tells me that the members quickly become focused on revisions and amendments that any outsider would describe as modest. To the extent that the revision of any of the articles …

Bankruptcy Theory And The Creditors' Bargain, David G. Carlson

Articles

The article critiques the traditional "simple creditors' bargain" theory in bankruptcy law, arguing that it fails to align with libertarian principles due to its inability to justify bankruptcy discharges and its exclusion of debtors and non-creditors. It then explores an "expanded creditors' bargain," which attempts to address distributive aspects but ultimately falls short by excluding non-consensual creditors and failing to explain why contractual risk allocation is insufficient. The analysis highlights the theory's shortcomings in handling various creditor types and risks, questioning its validity in explaining bankruptcy law.

Effectuating The Customer's Right To Stop Payment Of A Check: The Forgotten Section 4-401, D. Benjamin Beard

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No abstract provided.

Purchase Money Security Interest In Inventory: If It Does Not Float, It Must Be Dead!, D. Benjamin Beard

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No abstract provided.

Stalking The Squeeze: Understanding Commodities Market Manipulation, Richard D. Friedman

Articles

This article addresses the perplexing and important problem of how to distinguish valid, large-scale trading activity from a squeeze. Part I analyzes and reformulates what I will call the price-impact test, according to which manipulation is conduct motivated by its impact on price. This test, I contend, states a necessary but not sufficient condition for characterizing conduct as a squeeze. Part II offers a substantially different test, which I call the modified-sanctions approach. Under this approach, the price-impact test is used as a preliminary safe-harbor standard. The modified-sanctions approach goes further, however, recognizing that the essence of a squeeze is …

Goldstein's Curse, James J. White

Articles

ON April 16, 1980, a man using the name Marvin Goldstein opened a bank account at a Baltimore branch of Union Trust Company. He deposited $15,000 in cash. He told the branch manager that he planned to establish a Baltimore office of his father's New York business, "Goldstein's Precious Metals and Stones." Goldstein identified himself with a New Jersey driver's license and gave a bank reference from New York. On May 6, Goldstein deposited a check for $880,000 at another Union Trust branch near the branch where he had opened the account. Words on this check indicated that it was …

Employment At Will: The French Experience As A Basis For Reform, Madeleine M. Plasencia

Articles

Roughly one-quarter of the workers in the United States are represented by unions, leaving three-quarters subject to the vicissitudes of the employment-at-will doctrine.' At-will employees, as a general matter, lack protection against dismissal without cause.2 That is, an employer may dismiss an "at will" employee without notice, "for good reason, bad reason or no reason at all," so long as the proffered reasons for dismissal do not violate random whistle-blowing provisions or federal and state anti-discrimination statutes.' The mirror image of the employer's right to dismiss at will is the right of an employee who was hired to perform work …

The Decline Of The Contract Market Damage Model, James J. White

Articles

In law school every American lawyer learns that the conventional measure of damages for breach of a sales contract is the difference between the contract price and the market price. Even before these rules were embodied in the Uniform Sales Act and the Uniform Commercial Code (UCC), they were a staple of Anglo-American common law. They remain the rules with which a court would determine damage liability not only for the sale of goods, but also for the sale of real estate and securities.

Rationality, Accident, And Priority Under Article 9 Of The Uniform Commercial Code, David G. Carlson

Articles

The article argues that the priority rules under Article 9 of the Uniform Commercial Code (UCC) are not grounded in a coherent, rational principle but are instead the result of historical accidents and the influence of powerful interest groups. These rules create an asymmetrical system that favors expert lenders over amateur lenders, leading to inequities and inefficiencies. The author critiques justifications for these rules, such as efficiency and moral culpability, and advocates for a more ethical and equitable framework that aligns with societal notions of fairness.

Dancing On The Edge Of Article 9, James J. White

Articles

Despite the fact that Article 9 is a much more comprehensive personal property security statute than was ever found in American law prior to its enactment, cases continue to present issues on the scope of the Article. Gone are the cases in which a court was called upon to determine whether a "conditional sales contract" could be dealt with under the "factor's lien" law; it is now clear that all such personal property security devices are governed by Article 9. Yet many problems remain for the unwary lawyer. I will identify several and deal in detail with three of these …

Leveraged Buyouts In Bankruptcy, David G. Carlson

Articles

No abstract provided.

Hawaiian Ripples, Patricia D. White

Articles

Bacchus Imports, Ltd. and Eagle Distributors, Inc.

v.

George Freitas, Director of Taxation of the State of Hawaii

(Docket No. 82-1565)

Argued January 11, 1984

Efficiency Justifications For Personal Property Security, James J. White

Articles

In February of 1983 Pan American World Airways issued 100 million dollars of convertible secured notes. As security for these notes it put up three Boeing 747 SP aircraft, two 747-100 aircraft, and one McDonnell Douglas DC10-30. The appraised value of these aircraft was 157 million dollars. To the extent possible under the law, Pan American made these aircraft subject to the claims of the owners of the new notes. On default, the note holders would have the first claim on these aircraft, would have the right to repossess them outside of bankruptcy, and would have the right to the …

The Recent Erosion Of The Secured Creditor's Rights Through Cases, Rules And Statutory Changes In Bankruptcy Law, James J. White

Articles

One can view the law of creditors' rights as a series of cyclesin which alternatively the rights of the creditor and then those of the debtor are in ascendancy. Looking back through Americanlegislative history, one sees both the state legislatures and the Congress intervening on behalf of debtors in a variety of ways onmany occasions. An early example of such intervention was the enactment, particularly in the Midwest and West, of generous exemption laws that removed a variety of property beyond the reach of general creditors. A second example is the enactment of usury laws, which continue to be a …

Contract Law In Modern Commercial Transactions, An Artifact Of Twentieth Century Business Life?, James J. White

Articles

Diligent first year law students study contract law with a passion previously reserved for romantic objects and religious idols. Their professors lead them in extensive and difficult intellectual explorations of the wilds of contract law. There are careful analyses of why damage recovery X will stimulate performance Y, why recovery A is appropriate to encourage the aggrieved party to return to the market, and so on and so forth. Lurking behind this year long analysis are several inarticulate hypotheses: that they make rational evaluations of the threat of legal sanctions; that they respond in other varied and subtle ways to …

Eight Cases And Section 251, James J. White

Articles

[A] continuing sense of reliance and security that the promised performance will be forthcoming. . . is an important feature of the bargain-so states Comment 1 to section 2-609 of the Uniform Commercial Code. At common law, one party to a contract might suffer considerable and justifiable anxiety about the other party's willingness or ability to perform and yet have no legal basis for cancelling the contract or for procuring additional assurances from the other party. Section 251 of the Restatement (Second) of Contracts is designed to provide a remedy for one party's reasonable fears that the other party to …

Allocation Of Scarce Goods Under Section 2-615 Of The Uniform Commercial Code: A Comparison Of Some Rival Models, James J. White

Articles

Section 2-615 of the Uniform Commercial Code authorizes a contract seller to allocate goods in short supply when full performance has become commercially impracticable. Most of the cases under and commentary on that section have focused on the issue of commercial impracticability. The allocation aspects of the section have attracted much more modest attention in the cases and in the scholarly journals. The purpose of this article is to examine critically the allocation rule set out in section 2-615(b). That subsection authorizes a seller, upon a finding of commercial impracticability, to allocate "in any manner which is fair and reasonable." …

Evaluating Article 2 Of The Uniform Commercial Code: A Preliminary Empirical Expedition, James J. White

Articles

A proponent of commercial law codification, Mr. Eaton was one of the first American lawyers to perceive that mere codification of the law did not necessarily produce certainty and lack of discord in the law of commercial transactions. Indeed, in the same article Eaton reveals that of the 1,091 cases that had arisen under the Negotiable Instruments Law, only 704 cited the Act and in the other 387 "the Negotiable Instruments Law [was] ignored by the courts in the decisions, and (so far as the reports show) by the counsel in these cases...." Unlike Bentham, Carter, and Field, each of …

The Abolition Of Self-Help Repossession: The Poor Pay Even More, James J. White

Articles

In this paper I propose to identify possible ways in which a court could uphold the constitutionality of section 9-503 without an explicit rejection of Fuentes v. Shevin. It is my thesis that Fuentes v. Shevin is probably an undesirable outcome, and that the application of the same doctrine to self-help repossession is certainly undesirable and would constitute due process gone berserk. My arguments will not be novel; each has been suggested by the courts that have considered this matter, or by the briefs of the lawyers who have argued these cases. I cannot even claim to have collected the …

Consumer Sensitivity To Interest Rates: An Empirical Study Of New Car Buyers And Auto Loans, James J. White, Frank W. Munger Jr.

Articles

ALTHOUGH it has never been clear whether the consumer needs to be protected from his own folly or from the rapaciousness of those who feed on him, consumer protection is a topic of intense current interest in the courts, in the legislatures, and in the law schools. A number of recent court decisions have attempted to attack problems confronting the consumer; unfortunately, these judicial efforts have succeeded primarily in disclosing the limitations in the courts' ability to deal with such problems. State and federal legislative bodies have pursued more carefully designed remedies. Congress has passed the Truth-in-Lending Act; the National …

Enforcement Of A Promise In Modern American Law (Gendai Amerikaho Ni Okeru Yakusoku No Kyosei), Whitmore Gray

Articles

A series of seminar lectures given by Whitmore Gray in Tokyo, Japan during October 1968. Six articles were subsequently published in “Kaigai Shojihomu” (The International Business Law Bulletin) between July 1969 and May 1970.

The sixth and final installment describes the history of contractual enforcement in the U.S. and highlights changes introduced through adoption of the UCC.

Representing The Low Income Consumer In Repossessions, Resales And Deficiency Judgment Cases, James J. White

Articles

The goal of this article is to lend a helping hand to the debtor's lawyer in his job of defending deficiency judgment suits brought following the repossession and resale of a debtor's encumbered personal property. Although some of the following discussion is relevant to the defense of any creditor's suit, and some applies to representation of the debtor prior to repossession or resale, the focal point of the discussion is the low-income consumer who has lost his automobile, television or some other "hard good" and has become a defendant in a suit brought by his secured creditor for a deficiency …

Remedies For Breach Under The Uniform Commercial Code (Ucc Ni Okeru Keiyaku Furiko Ni Taisuru Kyusai), Whitmore Gray

Articles

A series of seminar lectures given by Whitmore Gray in Tokyo, Japan during October 1968. Six articles were subsequently published in “Kaigai Shojihomu” (The International Business Law Bulletin) between July 1969 and May 1970. The fifth installment discusses the difficulty of remedies and various methods of enforcement.

Contract Formation Under The Uniform Commercial Code (Ucc Ni Okeru Keiyaku No Seiritsu), Whitmore Gray

Articles

A series of seminar lectures given by Whitmore Gray in Tokyo, Japan during October 1968. Six articles were subsequently published in “Kaigai Shojihomu” (The International Business Law Bulletin) between July 1969 and May 1970.

The second installment discusses issues related to requirements compelling completion of a contract or pushing the issue to court.

The Role Of The Uniform Commercial Code In American Law (Beikokuho Ni Okeru Ucc No Ichi), Whitmore Gray

Articles

A series of seminar lectures given by Whitmore Gray in Tokyo, Japan during October 1968. Six articles were subsequently published in “Kaigai Shojihomu” (The International Business Law Bulletin) between July 1969 and May 1970.

The first installment provides a basic introduction to the UCC and its implementation into the U.S. legal system.