Commercial Transactions |
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(Last updated: 10 February 2007 )
Instructor: Prof. Avery Katz, 638 Jerome Greene Hall (854-0066, [email protected].) My regular conference hours for the term will be Tuesdays and Thursdays from 4:00 - 5:30 pm, but students enrolled in my courses are generally welcome on a walk-in basis. To make an appointment at other times, just call or e-mail me. If you need to contact my faculty assistant, she is Amara Levy-Moore, 600/7 Jerome Greene Hall (854-0064, [email protected].)
Class meets: Mondays, Tuesdays and Wednesdays, 2:45 – 4:00 pm, JG 107. Please check the official CLS curriculum guide for the most up-to-date information regarding any scheduling changes.
Course description: This course studies legal problems arising in commercial settings, with a principal emphasis on those sections of the Uniform Commercial Code that govern secured transactions and payments systems -- namely, Articles 3, 4, and 9. A major goal of the course is to offer students an opportunity to build on the foundation curriculum in contracts and property, by working through some of the topics covered in those courses at a more advanced level. The course builds on the foundation offerings in two ways. First, it focuses on mastering provisions of the UCC -- a complex, detailed statute that provides an integrated and interrelated body of law with a distinctive philosophical approach. Second, it focuses on the activities of the commercial business sector -- a subcommunity of relatively sophisticated private actors, who typically bargain at arms' length, who are usually motivated by the goal of economic gain in designing their contractual arrangements, and who have the opportunity to obtain legal advice before making plans. Accordingly, the course should be of interest to students who want to develop their skills in statutory analysis and in understanding and planning business transactions.
The course also covers certain provisions of Articles 1, 2, 2A, 4A, and 5 of the UCC and of the federal Bankruptcy Code. Major topics include techniques of statutory analysis, the methodology and scope of the UCC, the business function of secured credit, notes, drafts, and related contractual and commercial devices, the creation of security interests and their validity against third parties, priority among rival creditors in the debtor's assets, creditors' duties of care and good faith, default and foreclosure, the effect of bankruptcy law on debtor and creditor rights, negotiability and the holder in due course, the rights and duties of parties to various payment systems including checks, credit cards, and electronic transfers, and the bank-customer relationship.
Requirements and format: The class format will combine lecture and discussion. Students are expected to prepare for and to participate in class discussion on a regular basis. Grades will be based primarily on a proctored final examination, and secondarily on two in-class quizzes, scheduled for Wednesday, February 21 and Wednesday, April 11.
Both the quizzes and the final will be open-book, though they will differ in format. The quizzes will consist solely of true-false questions and are designed to test students on basic statutory mechanics; they will together receive one-third weight in calculating overall course grades. The final exam will be in essay format and will focus on broader concepts and skills, and will receive two-thirds weight in calculating course grades.
In addition, students who make significant positive contributions to class discussion over the semester may have their grades raised by one point (e.g., from B+ to A-); and those whose participation has been delinquent may have their grades lowered.
Option for writing credit: Students interested in applying for writing credit should consult my guidelines for supervised research at the outset of the course, and should submit a brief application describing their proposed project. Projects may be completed concurrently with the course, or in subsequent semesters.
Readings: There are two required texts: Warren and Walt, Commercial Law, 6th ed. (Foundation Press: 2004), and Baird, Eisenberg and Jackson's Commercial And Debtor-Creditor Law: Selected Statutes, 2006 ed. (West Group). There is also a required supplementary coursepack available in hard copy from University Printing Services (located between the law school and the School of International and Public Affairs), and also available online to registered and waitlisted students (you will need your network ID and password to access it from the law school server).
Students who desire additional background reading are encouraged to consult James J. White and Robert Summers, Uniform Commercial Code (West: 5th stud. ed. 1999), John Dolan, Commercial Law: Essential Terms and Transactions (Aspen: 2d ed. 1997), or Douglas Baird, The Elements of Bankruptcy (Foundation: 3d ed. 2001), all of which will be placed on course reserve at the law library.
A tentative schedule of reading assignments for the course is attached. These assignments may be modified as the semester goes along.
Reading assignments
Here is a tentative schedule of reading assignments for the term. Please note that the assignments may be modified. Weekly updates will be posted on the announcement page of the website; specific assignments for each class will be announced in the preceding class.
Page numbers refer to the casebook, Warren and Walt's Commercial Law, 6th edition. Relevant sections of the UCC and other statutes can be found in the statutory supplement; whenever a statutory section is referenced in the casebook or coursepack, you will need to look up that section in the supplement and read it with care. Bracketed numbers refer to the supplementary coursepack.
Date Topic Reading Mon 1/8 The problem of ostensible ownership. O'Connor v. Clark [1]. Tues 1/9 Conflicting rights to goods under the UCC. UCC §2-403(1), Alamo Rent-A-Car [2]. Wed 1/10 Conflicting rights to goods under the UCC, continued. §2-403(2). Mon 1/15 Martin Luther King, Jr. Birthday holiday: no classes meet. Tues 1/16 Introduction to personal property security. pp. 1-16, §§1-103 and 9-201. Wed 1/17 Introduction to personal property security, continued. Honnold et al. [3] and Schwartz/Scott [4]. Mon 1/22 Attachment: creating an enforceable security interest. pp. 19-49; §9-203. Tues 1/23 Perfecting a security interest: the filing system. pp. 50-71; §§9-502 and 9-516. Wed 1/24 Perfection by filing, continued. pp. 71-82; §§9-507 and 9-508. Mon 1/29 Perfection by possession and control. pp. 82-92; §§9-309, 9-312, and 9-313. Tues 1/30 Basic creditor priorities under article 9. pp. 108-118 and 135-137; §§9-317(a) and 9-322. Wed 1/31 Purchase money priority. Scott [5]; pp. 119-135; §§9-103 and 9-324. Mon 2/5 Rights of buyers and lessees. pp. 137-148; §§9-315(a) and 9-320. Tues 2/6 Rights to payment. pp. 148-168; §§9-109 and 9-315 Wed 2/7 Rights of the account debtor, rights in chattel paper. Artoc Bank & Trust v. Apex Oil [6] and §9-404; pp. 168-179 and §9-330. Mon 2/12 Rights to deposit accounts and cash proceeds. pp. 179-205; §§9-327, 9-332, and 9-340. Tues 2/13 Enforcement of security interests. Scott [7]; pp. 224-254; §§9-601, 9-602, 9-603 and 1-208. Wed 2/14 Enforcement of security interests, continued. pp. 254-296; §§9-607, 9-609, 9-610, 9-620, 9-625 and 9-626.. Mon 2/19 Alternatives to secured credit: guaranties and loan covenants. Katz [8], Pentax v. Boyd [9], ESL v Bovee [10] Tues 2/20 Alternatives to secured credit: personal property leases. pp. 297-324; §1-201(37). Wed 2/21 Quiz #1 Mon 2/26 Alternatives to secured credit: letters of credit pp. 504-549 Tues 2/27 Letters of credit, continued. pp. 549-569 Wed 2/28 Secured claims in bankruptcy. pp. 438-468; Bankruptcy Code §§361 and 362. Mon 3/5 Trustee's avoidance powers. pp. 468-470 and 496-503; BC §§544 and 548 Tues 3/6 Preferences in bankruptcy. pp. 471-487; BC §547. Wed 3/7 Preferences, continued. pp. 487-495. March 12-16 Spring Break: no classes meet Mon 3/19 Introduction to payments: cash and legal tender. Gillette, Schwartz, and Scott [11]. Tues 3/20 Introduction to negotiable instruments. pp. 586-608; UCC §§ 3-301, 3-306, 3-203, and 3-104. Wed 3/21 The holder in due course. pp. 608-630. Mon 3/26 Holder in due course, continued. pp. 630-645, 652-654. Tues 3/27 Liability of parties to negotiable instruments. pp. 666-689. Wed 3/28 Liability on negotiable instruments, continued. pp. 689-707. Mon 4/2 The traditional check collection system. pp. 708-735 Tues 4/3 Modern developments in check collection. pp. 735-757 Wed 4/4 Credit and debit cards. pp. 757-778 Mon 4/9 Fraud and forgery. pp. 819-845 Tues 4/10 Fraud and forgery, continued. pp. 845-872 Wed 4/11 Quiz #2 Mon 4/16 Alteration and restrictive indorsements. pp. 872-884. Tues 4/17 The bank-customer relationship. pp. 885-915 Wed 4/18 The bank-customer-relationship, continued. pp. 915-930 Mon 4/23 New payment systems. Mann [12].