Mark your calendar: The annual spring conference on contract law will be held on February 18 and 19, 2011, at the lovely Stetson Law School. Save the Date!
- JSM
Showing posts with label general. Show all posts
Showing posts with label general. Show all posts
Monday, September 27, 2010
St. Thomas University Looking for Business Faculty
A plug for my school. With Florida now also testing UCC Articles 3 and 9, I suspect there is more room commercial law as well as traditional corporate subjects.
ST. THOMAS UNIVERSITY SCHOOL OF LAW in Miami, Florida, invites applications from experienced and entry-level candidates for tenure-track positions beginning in the 2011/2012 academic year. The Law School especially seeks candidates in the areas of Business Associations, Wills and Trusts, Constitutional Law, Securities Regulations, Property and Civil Procedure. Applicants must possess a distinguished academic record, a dedication to excellence in teaching, and a demonstrated commitment to scholarship. Consistent with the Law School’s tradition of diversity, members of minority groups and women are especially encouraged to apply. Applicants should send a letter of application and a resume. CONTACT: Professor Tamara Lawson, Chair of the Faculty Recruitment Committee, St. Thomas University School of Law, 16401 NW 37th Avenue, Miami Gardens, Florida 33054. E-MAIL: tlawson@stu.edu. FAX: (305) 623-2390.
ST. THOMAS UNIVERSITY SCHOOL OF LAW in Miami, Florida, invites applications from experienced and entry-level candidates for tenure-track positions beginning in the 2011/2012 academic year. The Law School especially seeks candidates in the areas of Business Associations, Wills and Trusts, Constitutional Law, Securities Regulations, Property and Civil Procedure. Applicants must possess a distinguished academic record, a dedication to excellence in teaching, and a demonstrated commitment to scholarship. Consistent with the Law School’s tradition of diversity, members of minority groups and women are especially encouraged to apply. Applicants should send a letter of application and a resume. CONTACT: Professor Tamara Lawson, Chair of the Faculty Recruitment Committee, St. Thomas University School of Law, 16401 NW 37th Avenue, Miami Gardens, Florida 33054. E-MAIL: tlawson@stu.edu. FAX: (305) 623-2390.
- JSM
Sunday, September 26, 2010
Wall Street: Money Never Sleeps
Is greed still good?
The new movie, Wall Street: Money Never Sleeps never quite answers that one, though Gordon Gekko now dubs it "legal." Went to see this over the weekend and found it great. Perhaps out of sheer nostalgia I would have liked it, but Gekko's condemnation of "speculation" and references to tulip mania reminded me of John Galbraith. Set in the time of the current financial crisis, the movie emphasises the decisions that individuals (such as Susan Sarandon's nurse turned over-leveraged real estate investor) and banks (such as the investment firms peddling bad paper) made that led us to the crisis. Though Gekko, without cash and out peddling a book, is still Gekko, the new twist of creating even larger "bad guys" makes him a bad guy to cheer for. Definitely worth seeing.
The new movie, Wall Street: Money Never Sleeps never quite answers that one, though Gordon Gekko now dubs it "legal." Went to see this over the weekend and found it great. Perhaps out of sheer nostalgia I would have liked it, but Gekko's condemnation of "speculation" and references to tulip mania reminded me of John Galbraith. Set in the time of the current financial crisis, the movie emphasises the decisions that individuals (such as Susan Sarandon's nurse turned over-leveraged real estate investor) and banks (such as the investment firms peddling bad paper) made that led us to the crisis. Though Gekko, without cash and out peddling a book, is still Gekko, the new twist of creating even larger "bad guys" makes him a bad guy to cheer for. Definitely worth seeing.
- JSM
Wednesday, May 19, 2010
UCC Article 1 Legislative Update
As I predicted in my last legislative update, Mississippi and Wisconsin are the 38th and 39th states to have enacted Revised Article 1.
As introduced on January 11, 2010, Mississippi SB 2419 initially included a choice-of-law provision similar to the original version of Revised § 1-301 that every enacting state has rejected and that the ALI and NCCUSL replaced in 2008. Subsequently amended to replace the introduced version of § 1-301 with language tracking the now-official version, SB 2419 passed the Mississippi Senate on February 10 and the Mississippi House on March 9, and Governor Haley Barbour signed it into law on April 13. Mississippi SB 2419, which adopts uniform Revised § 1-201(b)(20), defining good faith as "honesty in fact and the observance of reasonable commercial standards of fair dealing," takes effect on July 1.
As introduced on January 22, 2010, Wisconsin SB 472 initially included uniform Revised 1-201(b)(20), but was subsequently amended to substitute the pre-revised § 1-201(19) "honesty in fact in the conduct or transaction concerned" definition in existing Wisconsin law. So amended, SB 472 passed the Wisconsin Senate on April 13 and the Wisconsin Assembly on April 22, and Governor Jim Doyle signed it into law on May 12. Wisconsin Act 320 (née SB 472) should take effect on August 1.
As of July 1, the effective date for Mississippi SB 2419 and the delayed effective date for last year's Indiana SB 501 (which I previously discussed here and here), which replaces the existing "honesty in fact in the conduct or transaction concerned" good faith definition in Indiana's version of Revised Article 1 with the uniform Revised 1-201(b)(20) definition, will tilt the balance in favor or uniform Revised 1-201(b)(20) -- as opposed to retaining the pre-revised 1-201(19) definition -- to 28-10 in favor of uniform Revised 1-201(b)(20). When it takes effect on August 1, Wisconsin Act 320 will tilt the balance back slightly to 28-11 in favor of uniform Revised 1-201(b)(20).
As introduced on January 11, 2010, Mississippi SB 2419 initially included a choice-of-law provision similar to the original version of Revised § 1-301 that every enacting state has rejected and that the ALI and NCCUSL replaced in 2008. Subsequently amended to replace the introduced version of § 1-301 with language tracking the now-official version, SB 2419 passed the Mississippi Senate on February 10 and the Mississippi House on March 9, and Governor Haley Barbour signed it into law on April 13. Mississippi SB 2419, which adopts uniform Revised § 1-201(b)(20), defining good faith as "honesty in fact and the observance of reasonable commercial standards of fair dealing," takes effect on July 1.
As introduced on January 22, 2010, Wisconsin SB 472 initially included uniform Revised 1-201(b)(20), but was subsequently amended to substitute the pre-revised § 1-201(19) "honesty in fact in the conduct or transaction concerned" definition in existing Wisconsin law. So amended, SB 472 passed the Wisconsin Senate on April 13 and the Wisconsin Assembly on April 22, and Governor Jim Doyle signed it into law on May 12. Wisconsin Act 320 (née SB 472) should take effect on August 1.
As of July 1, the effective date for Mississippi SB 2419 and the delayed effective date for last year's Indiana SB 501 (which I previously discussed here and here), which replaces the existing "honesty in fact in the conduct or transaction concerned" good faith definition in Indiana's version of Revised Article 1 with the uniform Revised 1-201(b)(20) definition, will tilt the balance in favor or uniform Revised 1-201(b)(20) -- as opposed to retaining the pre-revised 1-201(19) definition -- to 28-10 in favor of uniform Revised 1-201(b)(20). When it takes effect on August 1, Wisconsin Act 320 will tilt the balance back slightly to 28-11 in favor of uniform Revised 1-201(b)(20).
Tuesday, March 2, 2010
UCC Legislative Update
It has been a fairly quiet eight months on the UCC legislative front since my last update.
Revised Article 1
As of March 1, 2010, Revised Article 1 was in effect in thirty-seven states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.
State legislatures continue to grapple with the definition of "good faith," although the uniform § R1-201(b)(20) definition has the upper hand. Of the 37 enacting states, 26 have adopted the uniform definition, while 11 have retained the pre-revised definition that, in conjunction with § 2-103(1)(b), imposes a different good faith standard on merchants and non-merchants. Effective July 1, 2010, one of those eleven minority states (Indiana) will join the majority as SB 501, enacted in 2009 primarily for the purpose of amending Articles 3 and 4, also revises Ind. Code § 26-1-1-201(19) to require all parties to act honestly and to observe reasonable commercial standards of fair dealing. (At present, Indiana's Revised Article 1 requires only “honesty in fact.”) This change will take effect July 1, 2010, and further tip the balance among enacting states in favor of the unitary good faith definition in uniform R1-201(b)(20).
With many state legislatures occupied with more pressing issues of the moment, 2009 yielded only three new adoptions -- Alaska, Maine, and Oregon -- down from five in 2008, and seven in 2007. While a downward trend in new enactments eventually becomes inevitable once two-thirds of the states have signed on, 2009's three enactments were the fewest in a year since 2003 (when Idaho became the third state overall to enact Revised Article 1).
As of March 1, only two states -- Mississippi and Wisconsin -- appear to be serious candidates to enact Revised Article 1 in 2010.
Mississippi SB 2419, introduced and amended (to replace a choice-of-law provision that appeared to have derived from the original § R1-301 that all 37 enacting states have declined to adopt and the ALI and NCCUSL have disavowed with one that reflected the substitute § R1-301 the ALI and NCCUSL promulgated in 2008) in January, unanimously passed the Mississippi Senate on February 10. It is presently before the House Judiciary Committee.
Wisconsin AB 687, introduced on January 25 and amended on February 16 to replace the uniform R1-201(b)(20) "good faith" definition with the pre-revised 1-201(19) version, received the Assembly Committee on Financial Institutions's unanimous approval on February 26. It is presently before the Assembly Rules Committee.
Two other bills, Massachusetts HB 89 and Washington SB 5155, seem less likely to produce results.
Massachusetts HB 89, the fifth attempt to enact Revised Article 1 in the Commonwealth, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action had been reported as of March 1, 2010.
Washington SB 5155, introduced on January 15, 2009, appeared to be drawn directly from the language of official Revised Article 1 circa 2001, including the original version of § R1-301. At an initial public hearing on January 23, 2009, all those testifying in support of and in opposition to the bill opposed the choice-of-law provision. The Washington Senate appears to have taken no further action except to "reintroduce and retain [the bill] in present status" on January 11, 2010.
Article 2 and 2A Amendments
As of March 1, 2010, only three state legislatures (Kansas, Nevada, and Oklahoma) have considered bills proposing to enact the 2003 amendments to UCC Articles 2 and 2A. The Kansas and Nevada bills died on the vine.
In 2005, Oklahoma amended Sections 2-105 and 2A-103 of its Commercial Code to add that the definition of “goods” for purposes of Articles 2 and 2A, respectively, “does not include information,” see 12A Okla. Stat. Ann. §§ 2-105(1) & 2A-103(1)(h) (West 2009), and amended its Section 2-106 to add that “contract for sale” for purposes of Article 2 “does not include a license of information,” see id. § 2-106(1). The net effect is similar to having enacted Amended §§ 2-103(k) & 2A-103(1)(n), both of which exclude information from the meaning of “goods” for purposes of Article 2 and 2A, respectively. Otherwise, no state has enacted any of the 2003 amendments.
While the list of states enacting any of the 2003 amendments may not change in the near future, the number of amendments Oklahoma enacts may. Introduced on February 1, 2010, Oklahoma HB 3104 proposes amendments to forty-nine sections of Article 2 and four sections of Article 2A. The bill includes neither the reformulation of Sections 2-206 and 2-207 nor the addition of Sections 2-313A and 2-313B included in the 2003 Article 2 amendments. Many of the amendments appear designed to facilitate electronic signatures and transactions and to accommodate the terminology surrounding them that grows out of UETA, E-SIGN, and Revised UCC Articles 1 and 7, or to otherwise align Article 2 and 2A terminology with that used in Revised Articles 1 and 7. That is not to say that HB 3104 proposes only cosmetic changes to Oklahoma's versions of Articles 2 and 2A. Several of the proposed amendments alter existing substantive rights, obligations, or remedies. Some of those alterations (e.g., raising the § 2-201 floor from $500 to $5,000) do not seem to be inherently controversial; some (e.g., granting/recognizing a right to cure after a justifiable revocation) may or may not be controversial depending on how courts have interpreted the current Article 2; and some (e.g., giving sellers the right to recover consequential damages) do seem inherently controversial. More on this if the bill progresses.
Article 3 and 4 Amendments
As of March 1, 2010, the 2002 amendments to Articles 3 and 4 were in effect in eight states: Arkansas, Kentucky, Minnesota, Nevada, New Mexico, Oklahoma (for a second time), South Carolina, and Texas. They will take effect in Indiana on July 1, 2010.
As of March 1, 2010, the only pending Articles 3 and 4 bill is Massachusetts HB 90, which has been languishing for more than a year.
Revised Article 7
As of March 1, 2010, Revised UCC Article 7 was in effect in thirty-six states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, and West Virginia.
Additional bills are currently pending in Georgia, Massachusetts, Washington, and Wisconsin; but only the Wisconsin bill appears to be making any progress.
First introduced on February 18, 2009, Georgia HB 451 won unanimous approval in the Georgia House on March 12, and the Senate Judiciary Committee recommended passage on March 26. However, the legislature adjourned on April 3 without a third reading and final action in the senate. HB 451 was "recommitted" to the Georgia Senate on January 11, 2010. No further action has been reported.
Massachusetts HB 89, which also proposes adopting Revised Article 1, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action has been reported.
Washington SB 5154 was introduced on January 15, 2009, scheduled for a public hearing on January 23, 2009, and then stalled, like its Revised Article 1 counterpart, but without as compelling a reason. It was "reintroduced and retained in present status" on January 11, 2010. No further action has been reported.
Wisconsin AB 688 was introduced on January 25, 2010. On February 22, the Assembly Committee on Jobs, the Economy and Small Business unanimously recommended passage. The bill is now before the Assembly Rules Committee.
Revised Article 1
As of March 1, 2010, Revised Article 1 was in effect in thirty-seven states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and West Virginia.
State legislatures continue to grapple with the definition of "good faith," although the uniform § R1-201(b)(20) definition has the upper hand. Of the 37 enacting states, 26 have adopted the uniform definition, while 11 have retained the pre-revised definition that, in conjunction with § 2-103(1)(b), imposes a different good faith standard on merchants and non-merchants. Effective July 1, 2010, one of those eleven minority states (Indiana) will join the majority as SB 501, enacted in 2009 primarily for the purpose of amending Articles 3 and 4, also revises Ind. Code § 26-1-1-201(19) to require all parties to act honestly and to observe reasonable commercial standards of fair dealing. (At present, Indiana's Revised Article 1 requires only “honesty in fact.”) This change will take effect July 1, 2010, and further tip the balance among enacting states in favor of the unitary good faith definition in uniform R1-201(b)(20).
With many state legislatures occupied with more pressing issues of the moment, 2009 yielded only three new adoptions -- Alaska, Maine, and Oregon -- down from five in 2008, and seven in 2007. While a downward trend in new enactments eventually becomes inevitable once two-thirds of the states have signed on, 2009's three enactments were the fewest in a year since 2003 (when Idaho became the third state overall to enact Revised Article 1).
As of March 1, only two states -- Mississippi and Wisconsin -- appear to be serious candidates to enact Revised Article 1 in 2010.
Mississippi SB 2419, introduced and amended (to replace a choice-of-law provision that appeared to have derived from the original § R1-301 that all 37 enacting states have declined to adopt and the ALI and NCCUSL have disavowed with one that reflected the substitute § R1-301 the ALI and NCCUSL promulgated in 2008) in January, unanimously passed the Mississippi Senate on February 10. It is presently before the House Judiciary Committee.
Wisconsin AB 687, introduced on January 25 and amended on February 16 to replace the uniform R1-201(b)(20) "good faith" definition with the pre-revised 1-201(19) version, received the Assembly Committee on Financial Institutions's unanimous approval on February 26. It is presently before the Assembly Rules Committee.
Two other bills, Massachusetts HB 89 and Washington SB 5155, seem less likely to produce results.
Massachusetts HB 89, the fifth attempt to enact Revised Article 1 in the Commonwealth, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action had been reported as of March 1, 2010.
Washington SB 5155, introduced on January 15, 2009, appeared to be drawn directly from the language of official Revised Article 1 circa 2001, including the original version of § R1-301. At an initial public hearing on January 23, 2009, all those testifying in support of and in opposition to the bill opposed the choice-of-law provision. The Washington Senate appears to have taken no further action except to "reintroduce and retain [the bill] in present status" on January 11, 2010.
Article 2 and 2A Amendments
As of March 1, 2010, only three state legislatures (Kansas, Nevada, and Oklahoma) have considered bills proposing to enact the 2003 amendments to UCC Articles 2 and 2A. The Kansas and Nevada bills died on the vine.
In 2005, Oklahoma amended Sections 2-105 and 2A-103 of its Commercial Code to add that the definition of “goods” for purposes of Articles 2 and 2A, respectively, “does not include information,” see 12A Okla. Stat. Ann. §§ 2-105(1) & 2A-103(1)(h) (West 2009), and amended its Section 2-106 to add that “contract for sale” for purposes of Article 2 “does not include a license of information,” see id. § 2-106(1). The net effect is similar to having enacted Amended §§ 2-103(k) & 2A-103(1)(n), both of which exclude information from the meaning of “goods” for purposes of Article 2 and 2A, respectively. Otherwise, no state has enacted any of the 2003 amendments.
While the list of states enacting any of the 2003 amendments may not change in the near future, the number of amendments Oklahoma enacts may. Introduced on February 1, 2010, Oklahoma HB 3104 proposes amendments to forty-nine sections of Article 2 and four sections of Article 2A. The bill includes neither the reformulation of Sections 2-206 and 2-207 nor the addition of Sections 2-313A and 2-313B included in the 2003 Article 2 amendments. Many of the amendments appear designed to facilitate electronic signatures and transactions and to accommodate the terminology surrounding them that grows out of UETA, E-SIGN, and Revised UCC Articles 1 and 7, or to otherwise align Article 2 and 2A terminology with that used in Revised Articles 1 and 7. That is not to say that HB 3104 proposes only cosmetic changes to Oklahoma's versions of Articles 2 and 2A. Several of the proposed amendments alter existing substantive rights, obligations, or remedies. Some of those alterations (e.g., raising the § 2-201 floor from $500 to $5,000) do not seem to be inherently controversial; some (e.g., granting/recognizing a right to cure after a justifiable revocation) may or may not be controversial depending on how courts have interpreted the current Article 2; and some (e.g., giving sellers the right to recover consequential damages) do seem inherently controversial. More on this if the bill progresses.
Article 3 and 4 Amendments
As of March 1, 2010, the 2002 amendments to Articles 3 and 4 were in effect in eight states: Arkansas, Kentucky, Minnesota, Nevada, New Mexico, Oklahoma (for a second time), South Carolina, and Texas. They will take effect in Indiana on July 1, 2010.
As of March 1, 2010, the only pending Articles 3 and 4 bill is Massachusetts HB 90, which has been languishing for more than a year.
Revised Article 7
As of March 1, 2010, Revised UCC Article 7 was in effect in thirty-six states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, and West Virginia.
Additional bills are currently pending in Georgia, Massachusetts, Washington, and Wisconsin; but only the Wisconsin bill appears to be making any progress.
First introduced on February 18, 2009, Georgia HB 451 won unanimous approval in the Georgia House on March 12, and the Senate Judiciary Committee recommended passage on March 26. However, the legislature adjourned on April 3 without a third reading and final action in the senate. HB 451 was "recommitted" to the Georgia Senate on January 11, 2010. No further action has been reported.
Massachusetts HB 89, which also proposes adopting Revised Article 1, was assigned to the Joint Committee on Economic Development and Emerging Technologies on January 20, 2009. No further action has been reported.
Washington SB 5154 was introduced on January 15, 2009, scheduled for a public hearing on January 23, 2009, and then stalled, like its Revised Article 1 counterpart, but without as compelling a reason. It was "reintroduced and retained in present status" on January 11, 2010. No further action has been reported.
Wisconsin AB 688 was introduced on January 25, 2010. On February 22, the Assembly Committee on Jobs, the Economy and Small Business unanimously recommended passage. The bill is now before the Assembly Rules Committee.
Monday, December 7, 2009
Martin, Evans, Wright and More on Consumer Issues in New Lydian Payments Journal
A little self promotion and more. Take a look at the new Lydian Payments Journal. The December issue features:
- David Evans and Joshua Wright: How the Consumer Financial Protection Agency Act of 2009 Would Change the Law and Regulation of Consumer Financial Products
- Jennifer S. Martin: What You Should Know about the Debit Card in Your Wallet: Where the Federal Reserve's New Overdraft May Fall Short
- Francesc Prior Sanz and Javier Santomá: Banking the Unbanked Using Prepaid Platforms and Mobile Telephones in the U.S.
- Ulf Mattsson: Demystifying PCI Technologies
Happy reading! Yes, after reading all the examinations. I've got a stack of first year Contracts exams coming my way this afternoon.
- JSM
Sunday, December 6, 2009
Commercial Law Welcomes Glenys Spence!
Commercial Law is pleased to announce Professor Glenys Spence as our newest guest blogger. Professor Spence practiced civil litigation and immigration law both as a solo practitioner as well as with JBM Immigration Group. In her practice she has represented clients in family-based immigration and deportation defense since 2007. Glenys is an Assistant Professor at Phoenix School of Law. Professor Spence's research focuses on the United Nations Convention on the International Sale of Goods. We hope to hear her thoughts on the CISG and other commercial topics!- JSM
Tuesday, October 27, 2009
Toys R Us to Feature FAO Schwarz
Something to expect this holiday season, Toys R Us will now feature FAO Schwarz boutiques. See Toys R Us to Feature. When FAO went out of business, Toys R Us bought the rights to the name and now intends to use it in about 600 of its stores. Not only will there be in-store purchasing, but there is a website (fao.com) and a holiday catalogue coming. The concept, of course, is to offer different toys that aren't otherwise available. Yes, the prices may be higher in a year that consumers might be looking to cut back a bit. Toys R Us has bought up a number of other brands of late (eToys.com, babyuni- verse.com and the resource site ePregnancy.com). Always on the lookout for fun toys for my own kiddos, I found a set of World of Eric Carl Bath Squirty Toys that my boys will love. And, priced at just $7.99, very reasonable.Happy shopping!
- JSM
Thursday, May 28, 2009
Small business in action!
I wanted to share this "fun" commercial picture of a small businessman in action in Moscow, Russia. This kiosk is right near Red Square, but most of the kiosks were only lightly filled with shoppers. Tourism is certainly down in Moscow with hotels reporting occupancy down around 50%. That will make it a tough summer for small sellers. This kiosk owner did manage to relieve us of about 800 RUB for some nesting dolls for my children!
-JSM
Tuesday, March 24, 2009
Signs of a Troubled Airline
I am on the road this week looking for houses in Southern California, and one thing struck me on the plane ride. U.S. Air sold advertising space to Zicam on its fold down tables -- ALL OF THEM. Little billboards under your drink as you fly. Is this just a smart allocation of space or signs of an Airline in trouble? Also slightly troubling, U.S. Air is now charging for WATER, soda, snacks, and of course spirits. I did not see a pay slot for the restroom but perhaps that innovation is not too far away. Are these things signs of desperation that might make you think twice about flying with that airline or is the airline efficiently using its assets.
Marc (MLR)
Friday, March 20, 2009
State Business Court Specialization
There are currently sixteen states that have either ventured to create specialized forums for commercial litigation or have entertained the idea in some form. It seems that most of these courts are designed around the complex nature of the litigation, rather than the subject matter; specifically the expertise seems to be handling document intensive litigation. So is business court or commercial court division a misnomer? Do litigants expect that Judges hearing these matters have a greater expertise than an ordinary judge in accounting principles or transactional work. If there is a higher level of expertise in transactional matters, does that have a trickle down impact on negotiating to arbitrate disputes by the parties -- (there may be other reasons for preferring arbitration, like not wanting to risk the resolution of disputes on a jury trial, but putting that aside, does the creation of a specialized forum for business problems alter parties dispute resolution choices?). Do these courts have actual technical commercial expertise, or are they just better at handling document intensive litigations than their district court counterparts. I am curious to hear from anyone that has experience with these courts.
Marc (MLR)
Wednesday, March 18, 2009
The Death of [the] Contracts [Course]... Maybe that's a good thing
The AALS Contracts list-serve two months ago carried a stream of interesting comments around the question whether contracts should be taught in four or six hour blocks of time. These discussions have been brought by the need to inject other things into the first year curriculum, such as skills courses, constitutional law, etc... (which I am all for). However, I want to offer a different proposal than a mere reduction of hours -- maybe we shouldn't teach contracts to first year students at all. Instead perhaps we should teach students in the first semester Article 2 of sales. Here are my reasons, in no particular order of significance. By the way, you can disparage me in person if you are going to the Contracts Panel at SEALS this summer, as this will be the basics of my presentation...
1. Its a Legislative World and I'm a Legislative.... The same argument I consistently hear justifying common law contracts as a First Year Course is that it teaches students how to read cases. First, doesn't Torts, Property, Criminal Law, and Civil Procedure do equally fine jobs of teaching students how to read cases? Second, and more importantly, where in the first year curriculum are we teaching students how to read statutes and Codes. We are not, and as a result, when students come to take a code based course, they repeat their first year growing pains again by by having to learn how to read and analyze statutes. Sales provides a great opportunity to fill the legislative gap and still .....
2. Introduce Students to the basic principles of contracting. Offer, assent, parole evidence, statute of frauds, battle of the forms (of course) impossibility, remedies... Its all there. The difference is two fold: one, the material is in a more concrete format in the form of a code; and two, the material becomes more understandable because students have a familiar and definite context for understanding specific rules like parole evidence, statute of frauds exceptions and the battle of the forms. As I tell my UCC students, we have all bought candy bars by the time we get to law school and we know the essence of the process --I give you money and you give me a Snickers. We now are putting definite terms to that process.
3. Is Common Law Contracts that relevant anymore? Sure the basic principles of offer, acceptance, etc.... in some form stretch the gambit of contracting. But our legal system has created so many different types of contracts that each vary in nuanced ways from each other. Employment contracts are different from sales contracts which are different than construction contracts, which are different from licenses and so on and so on. The idea that we are teaching general principles that stretch through the curriculum falls apart when students learn that each of these different contracts have their own unique language and terminology that renders the common law of contracts at best a quaint introduction to the sport of creating obligations. Add to that fact that much of contracting gets reduced to form-negotiations and contracting as an art becomes mostly irrelevant. If contracting were taught as an exercise in transacting, I believe it would be far more effective. One of the comments from the contracts list-serve discussion that I really appreciated came from Peter Linzer, in which he said:
At a less abstract, but much more practical level, I have for a long time been advocating a shift from Contracts as a course in busted deals to a course in what real contracts lawyers do, advising clients, helping them to plan, and getting the plan on paper through good drafting. I’m still trying to slip a bit of that into my four-credit course, but I can’t really change much. Some parts of Contracts must be taught from the cases (interpretation, the parol evidence rule, remedies, the click-wrap issues (which, of course, are also part of the transactional part of the process)). But the real task of preparing students to be transactional lawyers needs to be taught differently, and can’t be covered well in a four credit course. I can teach a class of 100 how to draft, but I can’t review their work to raise them beyond the very basics. That has to be covered in a more advanced course. But if we can sensitize students to what contract lawyers really do, and the important role of drafting and planning, we can greatly improve the abysmally low level of quality among most business lawyers, especially those dealing with small businesses. That, however, needs much more time than is available in a four hour course.
I concur.
4. Teaching common law contracts does not necessarily prepare students for the bar exam. First of all, students rarely retain what the parole evidence rule is versus the statute of frauds between the end of their contracts course and the beginning of their second year (or they may just deny any knowledge of those things in class). Moreover, we have pretty well ceded bar preparation to Bar-Bri, Mishmash, or what ever other cram course students are willing to fork out $2500 to cram long-forgotten doctrines in their minds. Have we all of a sudden become less confident in bar-review's capacity to teach contract doctrine as well? It seems to me that most professors I talk to vehemently deny that they are teaching for the bar (which I do as well). So why would we teach a course on that basis.
5. For that matter, Sales does not prepare students for the bar exam either, but there is a trickle down effect. In the same way that contracts does not necessarily create a long-term knowledge of contracts doctrines, neither will Sales. Though, at least by teaching sales early, we open the door for other UCC courses to be more accessible to students. Students that take Article 9 or Article 3-4, are more likely to be prepared for courses like bankruptcy, debtor and creditor rights, taxation, and corporations. Getting students in the sales curriculum earlier rather than later aids that process.
6. Wouldn't we all be happier teaching a perspectives-esque upper level course on the theory of contracts. Really isn't that what we all really want to teach anyway. This to me is the best use of the contracts course and one that often gets pushed aside for lack of hours or because students are not quite ready to understand these nuances. This is the art of preparing lawyers: equipping them with the intellectual tools to make rational decisions regarding how contracting should be undertaken. Forcing students to struggle through Law and Economics views of contracting, moral theory of contracting, etc... before they truly understand the contracting process seems to me to be reversed. Students will learn more and professors will be happier with the result.
The only upside to the contracts course is it might make the classic movie, The Paper Chase irrelevant, though I think I can live with that -- I think.
Marc (MLR)
Good Commercial Faith and the City
Thank you welcoming me into this space to talk out loud about some of the aspects of commercial behavior that I have been thinking of for sometime. I'm delighted to be blogging here. In addition to talking about my article on consumer behavior, I hope to write some on other aspects of consumer decision making. But today, I want to talk about commercial virtues.
One of the troubling aspects of commercial dealings today is the focus on ethics. Truthfully, I despise the topic (perhaps because I was never very good at the subject in either theological classes or law classes -- like professional responsibility for one). But the real reason I despise ethics, my own discordant academic performance in the subject aside, is I think we are often times asking the wrong questions. We assume that by ethics, we mean some form of social responsibility, but more often than not, that responsibility is defined by communities of interest, rather than greater social values. Consider the problem with UCC 1-201 and the definition of good faith. Do we really mean good faith is "honesty in fact" when we combine that with the observation of "reasonable commercial standards of fair dealing". Which takes precedence -- clearly the latter. The secured lender that tells only part of the story to his debtor (your income statement is a mere formality) has not been completely operating with "honesty in fact" though his actions may well fit within the constraint of reasonable commercial standards of fair dealing -- after all, fudging your income was hardly the act of just a few bad apples. The subjective element of good faith gives way to the relevant community that defines what good faith means.
Deirdre McCloskey in her defense of capitalism, aptly named, the Bourgeois Virtues, makes many debatable claims that Capitalism makes the world better 
It is the market -- the least overtly spiritual of contexts -- that delivers a profoundly spiritual message... The free market is the best means we have yet discovered... for creating a human environment of independence, dignity and creativity.
McCloskey's message of capitalism as a movement of social ingenuity is at its core the spiritual message of hope we find in some of our best religious literature. The prophet Jeremiah admonished the Israelites in Captivity:
This is what the Lord Almighty, the God of Israel says to all those I carried into exile from Jerusalem to Babylon: 'Build houses, settle down; plant gardens, eat what they produce, Marry and have sons and daughters; find wives for your sons and give your daughters in marriage so that they too may have sons and daughters. Increase in number there do not decrease. Seek the peace and the prosperity of the city to which I have carried you into exile. Pray to the Lord for it, for if it prospers, you too will prosper.
Ralph Waldo Emerson also saw that hope comes from capitalist engagement but only wh
The virtue of McCloskey's work is that Commerce (and capitalism) share a common goal of enhancing our social order, instilling the hope that we might reshape "the city" into an image that is not of ourselves as we currently stand, but of the selves that we might one day hope to be, both individually and collectively. And that actions should be weighed and measured against both of these standards. Whether we segregate capitalists from capitalist poets, we nonetheless, come to the same conclusion as Emerson and McCloskey -- that commerce creates the potential for humans to be good.
Which brings me back to 1-201. Do we really want good faith to be watered down by community constraints or is there a moment for reflection of the aspirational norms that commercial dealings might adhere to? I was much happier when good faith was simply "honesty in fact" without the burden of community differences, whatever that might mean -- even if the aspirational view of good faith was nearly impossible to enforce.
Marc (MLR)
Tuesday, March 10, 2009
Declines in university applications?
Bloomberg reported this week that applications are down this year at 7 of 8 top liberal arts colleges, some colleges down as much as 20%. Only Wellesley College was up, about 2%. What about law schools? Early reports are that law school applications are flat overall, but some schools are actually reporting increases. For instance University of Pennsylvania Law School is reporting an almost record increases in applications of 6%.So, what will happen to law school applications and enrollments by fall 2009? Normally we might expect more people to go to law school during hard economic times. But the current economic woes are pretty unprecedented. At the undergraduate level, it seems that private schools with the highest tuition are being hit the hardest in terms of application declines this year. Moreover, students looking for bargains may attend more state schools and make fewer applications. After all, law school is hardly an inexpensive endeavor. For instance, University of Pennsylvania at $41,960 for tuition is not exactly a bargain.
The high cost of law school, general economic uncertainty and the difficulty of getting loans would seem to favor some of the state schools that are bargain oriented. Early application numbers tell a mixed story. The good news is that law schools so far don't seem to be experiencing the deep declines present at the liberal arts colleges. The big problems at law schools may not be less applications, but rather lower budgets due to declining endowments and support from state revenues. At least at this point, these latter problems may have the greatest impact on law school education going forward.
What news for law schools going forward? Warren Buffet remarked recently that the economy “has fallen off a cliff.” The World Bank expects the world economy to contract in 2009. The market's pattern recently can best be described simply as one of uncertainty. The uncertainty/volatility in the markets will continue to affect the budgets available at law schools for some time to come. While this might seem grim in terms of university budgets, the impact may turn out to be harsh but manageable so long as law school applications remain somewhat stable. Like Americans generally, the law schools may simply find themselves tightening their belts to ride out lean budgetary times. As Franklin D. Roosevelt remarked:
When you come to the end of your rope, tie a knot and hang on.
Probably good advice for deans trying to balance the law school budget.
— JSM
Wednesday, November 19, 2008
Commercial Law Welcomes L. Ali Khan as Guest Blogger
Commercial Law is pleased to welcome L. Ali Khan as a guest blogger. Khan is a professor of law at Washburn University School of Law School where he teaches Payment Systems, Secured Transactions, International Law, International Business Transactions, Arbitration and Law and Human Rights. He has published books in the series Developments in International Law and much of his academic scholarship raises issues under Islamic law and conflicts involving Muslim communities. Ali also is the founder of the Islamiclawblog. One of his most recent articles, A Theoretical Analysis of Payment Systems, which will appear in the South Carolina Law Review, argues that modern payment systems, though different, should share a common theoretical basis.We welcome Ali's insights on payments doctrine, Muslim communities and other issues.
— JSM
Tuesday, November 4, 2008
Letterman's Top Ten Sarah Palin Excuses for Spending $150,000 on Clothes
In case you missed Letterman's top ten last week, here it is. With retailers struggling and worried about sales and already promoting holiday sales through discounting earlier in November than usual, Letterman could also add to the top of the list that she "wants to do her part for the economy!"
— JSM
Monday, November 3, 2008
The New Deal for the American People
Much about the economic issues of this election season is reflective of the pledge of "a new deal" made by Franklin D. Roosevelt (FDR) when he entered office in 1933. FDR's initiatives to tackle the Great Depression, including the creation of the Federal Deposit Insurance Corporation (FDIC), Tennessee Valley Authority (TVA), and the United States Securities and Exchange Commission (SEC) continue to have important roles in our economy today. Whether McCain or Obama wins the election tomorrow, the new President will face economic challenges that bear resemblance to FDR's time. The financial crisis will test the President from the outset and give him an opportunity to create lasting changes of the type that FDR initiated (see Crisis Creates Opening).The credit crisis has eased, but not gone away. Even with LIBOR rates declining and the numerous programs that the Federal Reserve has initiated (see my post on the Federal Reserve's Money Market Investor Funding Facility), banks nevertheless remain cautious and have imposed higher credit standards for consumer mortgages and credit cards. Couple this with the record $1.4 trillion that analysts expect the government will borrow over the next year alone. The credit crisis has put pressure on business enterprises, especially manufacturing which has faced a substantial downturn. Both Bernanke and Greenspan have warned us that substantial economic problems will remain for some time (see earlier posts of Bernanke and Greenspan speeches)
The economy has been much on the minds of voters. Political rhetoric aside, we all want to know the details of who will do what and how. This is the part that is lacking during a political season. One of the early signals to the economy about direction that the business and financial reforms will take is what key cabinet members the President will choose to address these critical problems. FDR's words remind us that economic problems are much of our own creation:
While they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.
The economy will have to wait a short time to see who the next President will be. Let's hope that action is decisive and effective.
— JSM
Wednesday, October 29, 2008
We Didn't Start the Fire
What would a Twenty-First Century version of Billy Joel's 1989 hit "We Didn't Start the Fire" would sound like? Certainly, the state of things now, as when Joel wrote the song, have their roots in events well into the past.
— JSM
Friday, September 19, 2008
The One Thing Markets Hate Worse Than Losses?
The last two days offer a vivid illustration of the raison d'être of the UCC (and commercial law generally). The one thing that markets hate worse than losses is . . . uncertainty.
The Dow has risen 779 points--over 7%--over the past two days (really, the past day-and-a-half), with financial stocks enjoying impressive gains (from the CNN story: "Merrill rose 28%, Bank of America gained 17%, AIG rose 51%, Morgan rose 25%, Goldman rose 20% and WaMu rose 28%."). All this on news that these very financial companies are going to be allowed to sell their worst assets to a newly created federal entity at a huge loss. Wait, can that be right? Hooray for losses???
The CNN story quotes one financial expert as saying that "the fundmentals have changed and that's going to support markets going forward." What fundamentals could this odd loss-accelerating proposal implicate?
Well, the most important fundamental, apparently: certainty, or at least the lack of obvious uncertainty. On Wednesday, the bailout of AIG created not certainty that the end of this crisis was nigh, but fears about which financial giant would be next on the Fed's discount shopping spree through Wall Street. No one knew who would be the next victim of uncertainty with respect to the value of the mortgages and mortage-backed securities at the heart of this problem. Beginning with rumors yesterday and confirmed today, the market finally started to glimpse the light at the end of the tunnel. If we have to run over hot coals barefooted to get to that light, so be it, but just tell us when we've hit rock bottom! Though the details remain shrouded in secrecy, the thrust of the plan is to drill down to bedrock by goosing some sort of market mechanism that will force banks and investors to admit once and for all how depressed the value of their mortgage-related assets really is (i.e., auctions to see who can offer these toxic assets to the Feds for the lowest price--I'll sell for 50% face value; no I'll sell for 40% . . . what a spectacle that will be!). Once the culprits of the housing crisis are forced to eat crow and turn over these assets, one hopes the feds will follow the FDIC-IndyMac example and start responsibly writing down the principle on overvalued mortgages, keeping people in their homes, and stopping the downward spiral in home prices. The end is near . . . . ?
O.K., O.K., another fundamental is involved here, too, I guess: liquidity. A Fed purchase of these uncertain payment streams will result in a huge infusion of liquidity into the market, having the double benefit of easing fears about the value of the assets and dousing loan markets with the cash that they have so desperately needed to get back to financing business and consumption on reasonable loan terms. That being said, my sense is that the infusion of certainty is much more central to this recovery (one hopes, long-term) than the expected infusion of liquidity.
It's hard for us to offer ready examples to students of why the certainty of HIDC status or Article 9 so facilitated the growth of commerce in the olden days, so let's point out the amazing effects of the promised exorcism of uncertainty this week.
The Dow has risen 779 points--over 7%--over the past two days (really, the past day-and-a-half), with financial stocks enjoying impressive gains (from the CNN story: "Merrill rose 28%, Bank of America gained 17%, AIG rose 51%, Morgan rose 25%, Goldman rose 20% and WaMu rose 28%."). All this on news that these very financial companies are going to be allowed to sell their worst assets to a newly created federal entity at a huge loss. Wait, can that be right? Hooray for losses???
The CNN story quotes one financial expert as saying that "the fundmentals have changed and that's going to support markets going forward." What fundamentals could this odd loss-accelerating proposal implicate?
Well, the most important fundamental, apparently: certainty, or at least the lack of obvious uncertainty. On Wednesday, the bailout of AIG created not certainty that the end of this crisis was nigh, but fears about which financial giant would be next on the Fed's discount shopping spree through Wall Street. No one knew who would be the next victim of uncertainty with respect to the value of the mortgages and mortage-backed securities at the heart of this problem. Beginning with rumors yesterday and confirmed today, the market finally started to glimpse the light at the end of the tunnel. If we have to run over hot coals barefooted to get to that light, so be it, but just tell us when we've hit rock bottom! Though the details remain shrouded in secrecy, the thrust of the plan is to drill down to bedrock by goosing some sort of market mechanism that will force banks and investors to admit once and for all how depressed the value of their mortgage-related assets really is (i.e., auctions to see who can offer these toxic assets to the Feds for the lowest price--I'll sell for 50% face value; no I'll sell for 40% . . . what a spectacle that will be!). Once the culprits of the housing crisis are forced to eat crow and turn over these assets, one hopes the feds will follow the FDIC-IndyMac example and start responsibly writing down the principle on overvalued mortgages, keeping people in their homes, and stopping the downward spiral in home prices. The end is near . . . . ?
O.K., O.K., another fundamental is involved here, too, I guess: liquidity. A Fed purchase of these uncertain payment streams will result in a huge infusion of liquidity into the market, having the double benefit of easing fears about the value of the assets and dousing loan markets with the cash that they have so desperately needed to get back to financing business and consumption on reasonable loan terms. That being said, my sense is that the infusion of certainty is much more central to this recovery (one hopes, long-term) than the expected infusion of liquidity.
It's hard for us to offer ready examples to students of why the certainty of HIDC status or Article 9 so facilitated the growth of commerce in the olden days, so let's point out the amazing effects of the promised exorcism of uncertainty this week.
Wednesday, September 10, 2008
In Memoriam: Richard E. Speidel (1933-2008)
The fields of contracts and commercial law (as well as ADR) lost an important scholar and a wonderful gentleman Saturday. At the time of his death, Dick Speidel was the Beatrice Kuhn Professor Emeritus at Northwestern University School of Law and a half-time professor at the University of San Diego School of Law. A longtime collaborator of James J. White and Robert Summers, with whose UCC hornbook and treatise I assume all our readers are familiar, Dick served from 1991-1999 as reporter for Revised UCC Article 2 — an experience he recounted in Revising UCC Article 2: A View from the Trenches, 52 Hastings L.J. 607 (2001). Among his many other books and articles are Studies in Contract Law (7th ed. 2008), which he co-authored with Ian Ayres (and previously with the late Edward J. Murphy), Commercial Transactions: Sales, Leases, and Licenses (2d ed. 2004), which he co-authored with Linda J. Rusch (who served from 1996-1999 as associate reporter for Revised Article 2).
USD Law Dean Kevin Cole posted this brief tribute.
USD Law Dean Kevin Cole posted this brief tribute.
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