Of Hidden Agendas, Naked Emperors, and a Few Good Soldiers: The Conference's Breach of Promise...Regarding Article 2 Damage Remedies
72 Pages Posted: 30 Jan 2016 Last revised: 28 Apr 2018
Date Written: 2001
The first draft of the Current Revision to Uniform Commercial Code Article 2 was issued in December, 1999. It looked not at all like the Original Revision. Its format reflected a return to the numbering system and structure of current Article 2. A perusal of its contents also clearly demonstrated that many, perhaps most, of the gains of the Original Revision had been discarded. The charge for the Current Revision had quite obviously been amended. At the two open meetings of the new drafting committee in February and March 2000, the Conference leadership stated on numerous occasions that no change in current Article 2 would be made without good reason being demonstrated. It was the apparent opinion of the leadership that many changes in the Original Revision were unjustified. The policy of making no change in current Article 2 law without good reason was emphasized by express assurances of Professors Gabriel and Henning to the membership of the American Law Institute at its May 2000 annual meeting. Presumably the reason for change would be drawn from existing case law under current Article 2, from the 1990 Study Group and ABA Task Force reports, and from the Original Revision of Article 2, and not from a personal agenda of principles and theories held by the drafters of the Current Revision. This article will demonstrate that, at least with respect to Article 2 remedies, the assurances of Professors Gabriel and Henning, and thus those of the Conference itself, were wholly hollow ones. The Current Revision seeks to restructure dramatically how Article 2 damage provisions work by permitting an aggrieved party always to recover supracompensatory damages based on market price in derogation of the basic damages principle of mitigation and of the Code's current compensation principle. This attempt is in opposition to recommendations of the Study Group, the ABA Task Force, and the provisions of the Original Revision of Article 2. It even contravenes basic and clearly stated principles of the common law of contract and of international law as codified in the Convention on the International Sale of Goods. The attempt, however, is reflective of the published writings of Professors Gabriel and Henning and, presumably, of their own personal goals as drafters of the Current Revision.
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