Secured Transactions Commons^™

How El Salvador Has Changed U.S. Law By A Bit: The Consequences For The Ucc Of Bitcoin Becoming Legal Tender, Brian Mccall

Faculty Articles

On June 8, 2021, the Congress of El Salvador passed a law that changed American commercial law.How could a foreign country change U.S. law? El Salvador’s Congress voted to confer “legal tender” status upon the cryptocurrency Bitcoin.The law took effect in El Salvador on September 7, 2021;starting that day, Bitcoin could be used to pay taxes4 and buy goods and services in El Salvador. As the first country to adopt Bitcoin as legal tender, El Salvador made world history and sparked many debates and predictions about the effects its decision may have on the Central American nation and its economy.Beyond …

The Hierarchy Of Priority, Paul Wangerin

The Journal of Business, Entrepreneurship & the Law

The analysis in this article suggests that there is a hierarchy of priorities in Article 9 of the UCC and that this hierarchy is relatively simple to describe. The analysis here describes this hierarchy by engaging in a two-part analysis. Part I suggests that the rules for priorities in Article 9 come out of the interaction of a number of variables, variables that are well-known to everybody who is familiar with Article 9. Part II suggests that the variables described in Part I allow us to put all of the important rules about priorities into a simple chart that shows …

Bringing Continuity To Cryptocurrency: Commercial Law As A Guide To The Asset Categorization Of Bitcoin, Evan Hewitt

Seattle University Law Review

This Note will undertake to analyze bitcoin under the Uniform Commercial Code (UCC) and the Internal Revenue Code (IRC)—two important sources of commercial law—to see whether any existing asset categories adequately protect bitcoin’s commercial viability. This Note will demonstrate that although commercial law dictates that bitcoin should—nay must—be regulated as a currency in order to sustain its existence, the very definition of currency seems to preclude that from happening. Therefore, this Note will recommend that we experiment with a new type of asset that receives currency-like treatment, specifically designed for cryptocurrencies, under which bitcoin can be categorized in order to …

An Historical Overview Of Ucc Article 9, Peter Winship

Faculty Journal Articles and Book Chapters

This book chapter traces the history of Article 9 (Secured Transactions) of the U.S. Uniform Commercial Code. After setting out the pre-1940 legal setting in the United States for the use of movable property in secured transactions, the chapter studies three stages in the evolution of Article 9: (1) the drafting of the first “official” text (1947-1951), (2) the continuing revision of the text and its slow adoption by states (1952-1990), and (3) the thorough-going revision that lead to the present 1998 official text and subsequent minor amendments (1990-present). The chapter notes the growing complexity of the text and the …

A Sea Change In Creditor Priorities, Kristen Van De Biezenbos

University of Michigan Journal of Law Reform

This Article argues that the operation of maritime law undermines a primary justification for creditor priorities under U.S. law. Under current law, when a debtor becomes insolvent, its secured creditors will be paid the full amount of their debt to the extent of their security interest, even if that leaves nothing to pay unsecured creditors. This is controversial with respect to involuntary unsecured creditors, particularly those with tort claims against the debtor. Defenders of this scheme of priorities have argued that allowing greater priority to involuntary creditors would hinder the availability or increase the cost of credit. However, involuntary creditors …

The Value Of Public-Notice Filing Under Uniform Commercial Code Article 9: A Comparison With The German Legal System Of Securities In Personal Property, Jens Hausmann Dr.

Georgia Journal of International & Comparative Law

No abstract provided.

Some Economic Insights Into Application Of Payments Doctrine: Walker-Thomas Revisited, James W. Bowers

Chicago-Kent Law Review

Contractual relations frequently involve multiple transactions, which might give rise either to a single aggregate debt, or else to multiple differing obligations. This conflict creates the application of payments problem. Unsurprisingly, the common law developed long-standing rules for the application of partial payments to multiple, but remedially distinguishable debts. The subject is made timely again by the recent enactments of the 1999 revision of Article 9 of the Uniform Commercial Code. Article 9 instructs courts how to solve the application of payments problem when some partial payments might satisfy “purchase money” security interests. The enactments repealed the common law application …

A Guide To The Model Tribal Secured Transactions Act For Those Familiar With The Uniform Commercial Code, Elaine A. Welle

American Indian Law Review

No abstract provided.

Twenty Questions About An Individual Debtor's Name Under Amended Article 9 Section 9-503(A)(4) Alternative A, Richard H. Nowka

William & Mary Business Law Review

This Article answers questions created by the financing statement requirements for sufficiency of the name of an individual debtor under the amendments to Uniform Commercial Code Article 9—Secured Transactions. An individual debtor in a security interest transaction could be known by various names: birth certificate name, driver’s license name, passport name, or nickname. Revised Article 9 provides no guidance on what name is the correct name of the debtor for entry on the financing statement, and a financing statement that does not provide the correct name of the debtor does not perfect the security interest. To resolve this problem, the …

A Fundamental Flaw With Uncitral's Approach To Cross-Border Secured Transactions: The Failure To Address Creditor Due Diligence Issues, John J. Chung

Law Faculty Scholarship

No abstract provided.

Article 9'S Bankrupt Proceeds Rule: Amending Bankruptcy Code Section 552 Through The Ucc Proceeds Definition, G. Ray Warner

Faculty Publications

Ten years ago, just as revised Article 9 was becoming effective, I documented how several of the Article 9 revisions had little or no nonbankruptcy function, but were designed primarily to alter bankruptcy law outcomes in favor of secured creditors. I argued that such attempts to amend federal bankruptcy law through the state uniform laws revision process were improper and suggested theories that would limit or avoid the intended bankruptcy law changes. This anniversary symposium provides an excellent opportunity to revisit one of those Article 9 revisions in greater detail and see how successful the drafters' anti-bankruptcy agenda has been.

Chuck And Steve's Peccadillo (Symposium: Threats To Secured Lending And Asset Securitization), James J. White

Articles

Are investors in securitized receivables to be treated as the owners of an asset whose sale has taken it beyond the reach of the trustee in bankruptcy of their sellers? O are they to be treated as holders of a security interest in the transferred asset who have left behind an interest in the sellers' hands that would cause the asset to be subject to claims and interference by the sellers' grasping trustee? By adopting contrasting-arguably conflicting-statements in two subsections of a single section, the drafters of 1999 Article 9 have thrust this issue in the faces of courts and …

The Anti-Bankruptcy Act: Revised Article 9 And Bankruptcy, G. Ray Warner

Faculty Publications

(Excerpt)

The articles in this symposium issue of the American Bankruptcy Institute Law Review attempt to analyze some of the major effects that the 1999 revision of Article 9 of the Uniform Commercial Code will have on bankruptcy law and bankruptcy practice. It is a hazardous activity to attempt to predict in advance the impact of new legislation. That problem is exacerbated when the new law is as extensive and complicated as the revised Article 9. At this early pre-effective date stage, only the more obvious intersections between Article 9 and the bankruptcy laws are easy to anticipate and examine. …

Introducing Revised Article 9 Of The Uniform Commercial Code, John L. Mccabe, Arthur H. Travers

Publications

No abstract provided.

A Central Filing System For Financing Statements, Arthur H. Travers Jr., John L. Mccabe

Publications

No abstract provided.

Ucc Proposals Concerning Consumer Transactions, James J. White

Other Publications

Professor Grant Gilmore once suggested that farmers would like a two section law. Section one would state "It shall be against the law to refuse to lend money to a farmer." Section two would state "It shall be against the law to collect a debt from a farmer." In a similar vein one might state the iron rule of consumer law, namely "No right that has ever been granted to a consumer, however ill considered and unjustified, may thereafter be withdrawn." Believing that some of the proposals for consumer protection that have been added in Revised Article 9 are not …

The Intersection Of Articles 2 And 9, Steven L. Harris, James J. White

Other Publications

I. Standard Form Contracts II. Buyer in Ordinary Course; Prepaying Buyer III. Consignments IV. Seller's Right to Reclaim Delivered Goods

They Came From "Beyond The Pale": Security Interests In Tort Claims, Harold R. Weinberg

Law Faculty Scholarly Articles

"[B]eyond the pale" is how the drafters of Article Nine of the Uniform Commercial Code regarded tort claims. They considered tort claims to be noncommercial assets inappropriate for inclusion as collateral within the scope of a commercial financing statute. Tort claims may not be out-of-bounds much longer. The Article Nine Study Committee of the Permanent Editorial Board for the Uniform Commercial Code recommends expansion of the Article's scope to encompass security interests in claims arising out of tort. This recommendation is significant. Tort causes of action comprise an ever-expanding universe of civil wrongs for which courts afford redress. The owners …

Reforming Article 9 Priorities In Light Of Old Ignorance And New Filing Rules (Symposium: 'Managing The Paper Trail': Evaluating And Reforming The Article 9 Filing System), James J. White

Articles

The other papers in this Symposium demonstrate that we have the technical capacity to build a filing system that will exceed the expectations of Grant Gilmore in every dimension.1 With more thought about what is put into the system and more clever software to get it out, the most sophisticated system possible under current technology will store and produce enough information about a debtor to give the ACLU a fright. All of the issues on improving the filing system are important, but I do not concern myself with any of them directly. I am here discuss a different question. In …

The Intersections Of Articles 2 And 9: Recommendations For Clarification And Revisions, Richard E. Speidel, James J. White

Other Publications

Both Article 2, Sales and Article 9, Secured Transactions are under revision. The process of coordination is underway, but there is still much work to do. The following materials identify the major issues at the intersections and some tentative solutions. All references are to the 1990 Official Text of the Uniform Commercial Code unless otherwise stated. When stated, references are to the October, 1995 Draft of Article 2 and the July, 1995 Draft of Article 9.

A Quest For Justice In The Conversion Of Security Interests, Russell A. Hakes

Kentucky Law Journal

No abstract provided.

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 …

Article 5: Highlights Of The Proposed Revision, James J. White

Other Publications

I. The Current Status of Article 5: Drafting, Approval and Promulgation--The Most Significant Changes or Clarifications -- II. The Most Contentious Issues in the Revision of Article 5 -- III. More Subtle Questions About Revised Article 5

Scope Of The Uniform Commercial Code: Advances In Technology And Survey Of Computer Contracting Cases, Harold R. Weinberg, Ameila H. Boss, William J. Woodward Jr.

Law Faculty Scholarly Articles

Since the 1940s, the technology revolution has enabled people to communicate electronically. Sitting at a computer terminal connected to a modem and a telephone wire, it is possible to send a message anywhere in the country (or throughout the world)—to another computer, to a telecopy or telefax machine, even to a telephone. Paper is being replaced by electronic signals as a mode of communication. This revolution calls into question some of the fundamental rules upon which our contracts and the U.C.C. were built. On a broader scale, electronic communication raises issues that include the rights and responsibilities of providers and …

Legislative Process And Commercial Law: Lessons From The Copyright Act Of 1976 And The Uniform Commercial Code, Harold R. Weinberg, William J. Woodward Jr.

Law Faculty Scholarly Articles

Overlap and conflict are inevitable in any legal system in which a federal government and state governments both have authority to enact laws. In our federal system, the Constitution's Supremacy Clause identifies federal law as preeminent in case of conflict. When conflict develops and litigation is required to determine whether state or federal law controls the issue at hand, our system analyzes the problem using the term preemption as a basis for analysis.

This Article explores the federal legislative process that precedes judicial preemption decisions. By studying the legislative process for its sensitivity to preemption issues, possible ways to modify …

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 …

Preference Conundrums, James J. White, Daniel Israel

Articles

Every law teacher and many law students and practitioners understand the intellectual sport to be found in Section 547 on preference law. Because the preference rules are so intricate, rigorously logical-but really not logical-they command more than their fair attention, not only in law school but also in continuing legal education and even in the courts. Our purpose in this article is not to answer any of the difficult questions or to give a global explanation of preference law. Rather it is to confront a few of the conundrums in Section 547 and to follow the paths of those conundrums …

Clear Title For Farm Products: Congress And The Arkansas Legislature Attempt To Solve A Troublesome Problem, D. Fenton Adams

University of Arkansas at Little Rock Law Review

No abstract provided.

Article Two Warranties In Commercial Transactions: An Update, Kathryn L. Moore, Debra L. Goetz, Douglas E. Perry, David S. Rabb

Law Faculty Scholarly Articles

In 1978 the Cornell Law Review published a Special Project devoted to Article Two commercial warranties. Nine years have since elapsed, and we have decided to update and reassess this important area of the law. We have discovered that although judicial treatment of many aspects of Article Two warranty law has remained stable, in some instances the courts' treatment has progressed and in other instances it has become unclear. This Special Project is our attempt to assemble these changes, interpret the progress, and suggest new lines of analysis to clarify areas of conflict.

Preserving Purchase Money Security Interests And Allocating Payments, Lynda Kay Chandler

University of Michigan Journal of Law Reform

This Note explores the rationale underlying the courts' conflicting decisions in light of the purposes of the UCC. It concludes that the language of the UCC and its goals of uniformity and simplification require that a PMSI should not be entirely destroyed because a creditor also has a security interest in items the debtor acquired after the purchase money transaction or because a creditor extends additional credit. The best solution is to permit the creditor to retain a PMSI, to the extent of the purchase money loan, in those goods that the creditor's loan helped to purchase.

Part I is …