How to Create a Commercial Calamity

Abstract:     
There are many ways to define a legal calamity. For example, a grossly unfair or inefficient law constitutes a legal calamity. A law that produces serious and deleterious unintended effects, such as effects opposite from those intended, is another kind of legal calamity. A law that is so imprecise and confusing that judges do not know how to apply it and lawyers do not know how to advise their clients is still another example of a legal calamity, which I focus on in this paper. Because this paper is a contribution to a symposium on commercial legal calamities, my example is Uniform Commercial Code (UCC) section 2-209, dealing with contract modification and waiver. But my goal is not to explain why 2-209 is a calamity of the third kind - everybody already knows that it is. I use the section to illustrate the kind of strategy of lawmaking that cannot fail to create a calamity of obfuscation. Section 2-209 illustrates what happens when lawmakers who boldly seek to reform the law cannot bring themselves to carry out their plan or never fully understand the ramifications of what they are doing. Instead, they waiver. The result is chaos - a commercial calamity.

Number of Pages in PDF File: 18

working papers series