Untangling the Web of Consignment Law: The Journey from the Common Law and Article 2 to Revised Article 9
William & Mary Business Law Review, Vol. 10, 2018
70 Pages Posted: 8 May 2019
Date Written: August 16, 2018
This Article examines and analyzes the law of consignments from the common law through Revised Article 9 with a goal towards identifying and analyzing the uncertainties and confusion that have persisted throughout the transition from the common law to the UCC. The law of consignments has abounded with uncertainty since its genesis under common law. In an attempt to clarify the persistent confusion and disarray surrounding the law, the UCC enacted Section 2-326; but, the statute was not a model of clarity engendering increased uncertainty and confusion. Courts wrestled with how to interpret the provision consistent with the intent of the UCC drafters. In 2001, the UCC moved consignments from Article 2 to Article 9 and made substantial revisions to both Articles to provide greater clarity. While Article 9 provides a much more comprehensive legal framework for consignments; in many respects it is a reformulation of former Article 2-326. Thus, many of the uncertainties concomitant with the Article 2 coverage of consignments continue to persist under Article 9. And the revisions to Article 9 have generated new issues on which courts are split creating even more confusion. In August 2017, the Permanent Editorial Board drafted a Commentary in which it proposed certain amendments to resolve some of the uncertainties surrounding the Article 9 revisions. The commentary and the amendments provide much needed clarity, but they leave unresolved several significant issues in which uncertainty persists and on which courts are split. The goal of this Article is to identify and analyze the various uncertainties that have arisen from the common law through Revised Article 9 and to propose revisions that include removing consignments from the definitional provision of Article 9 to its own separate provision in Article 9 to resolve more extensively the persistent and burgeoning uncertainties identified throughout this Article.
Keywords: consignment, consignments, sale or return, bailment, Article 2, Article 9, common law, Section 9-102 (a) (20), Section 2-326, consignee, consignor, consigned goods, perfection, attachment, priority, bankruptcy, trustee, secured party, debtor, generally known by creditors, raw materials
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