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Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms

University of Pennsylvania Law Review, 1996.

Posted: 4 May 1998  

Lisa Bernstein

University of Chicago - Law School

Abstract

In the spirit of the Code and Karl Llewellyn, this Article begins by looking at merchant practice. It presents a case study of the private legal system created by the National Grain and Feed Association to resolve contract disputes among its members. The study pays especially close attention to the willingness of NGFA's industry-expert adjudicators to take trade usage, course of dealing, and course of performance into account in deciding cases. It finds that despite their industry expertise, NGFA arbitrators are reluctant to look to these indicia of immanent business norms. The Article then challenges the idea that courts should seek to discover and apply immanent business norms in deciding cases. It demonstrates that while the drafters of the Code sought to incorporate these norms into the law in an effort to make commercial law more responsive to and reflective of commercial reality, they failed to recognize that this approach would fundamentally alter the very reality they sought to reflect, and would do so in ways that would have undesirable effects on commercial relationships and would undermine the Code's own stated goals of promoting flexibility in commercial transactions and "permit[ting] the continued expansion of commercial practices through custom, usage and agreement of the parties."

JEL Classification: K29

Suggested Citation

Bernstein, Lisa, Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms. University of Pennsylvania Law Review, 1996.. Available at SSRN: https://ssrn.com/abstract=10104

Lisa E. Bernstein (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

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