A Complaint about Payment Law Under the U.C.C.: What You See is Often Not What You Get

Abstract

In this Essay, Professor Maggs observes that many provisions of U.C.C. Articles 3, 4, 4A, and 5 are misleading. Although the provisions express certain rules, these rules often actually do not apply because the parties have waived them, because the parties have no practical way to enforce them, or because they are predicated on unrealistic assumptions. Professor Maggs laments that this discrepancy between what the U.C.C. says and reality may have deceived the state legislatures that voted to enact the U.C.C., that it may impose costs on businesses and consumers, and that it clearly hinders the education of lawyers and law students. He suggests that the U.C.C. would be improved if it stated more candidly and accurately the rules that actually apply in real transactions.

Keywords: UCC, U.C.C., Uniform Commercial Code, default rules, consumer protection, legislative drafting

JEL Classification: K12, K2