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Saturday, August 12, 2006

Here's to Article 9 (Tastes Great! More Filing!)

I did not plan five minutes ago on starting this post this way, but if you can't be random and spontaneous on a blog post, where can you be?  But as I intend before I'm done to reflect on teaching Article 9, perhaps some random spontaneity will entertain those readers for whom the mere mention of the UCC has the same effect as hypoglycemia.  What prompted this was the observation that when you click on "Create a Post" for PrawfsBlawg in TypePad, the motto "Where Intellectual Honesty Has (Almost Always) Trumped Partisanship Since 2005" appears just before the window in which you compose (as I am now doing).  As most of the substantive discussion on this blog swirls around mighty and controversial issues of constitutional and criminal law, that seems to me to a prudent, if not intended, benefit of TypePad.  It reminds the author to be civil even when consumed by passion. 

This post, however,  started as an ode to Article 9 (the revised version, please), particularly when compared to Article 2.  The thought flashed through my mind whether my siding with Article 9 over Article 2 would constitute partisanship.    And while I have not consumed any alcoholic beverages since downing a Sierra Pale Ale in Indianapolis almost a week ago, I had an image of one of those  Miller Beer commercials with Dick Butkus and Bubba Smith, in which a bunch of law professors are sitting in a bar (Karl Llewellyn?  Richard Craswell?  Charles Fried?) passionately screaming at each other:  " Works Great! Less Efficient!"  But that's just me.

The intellectually honest part of this has to do with the fact that prepping for Secured Transactions has caused me to dig into Article 9 for the first time.  I taught Sales last year, and had been fairly steeped over the years in Article 2 (for example, I have a 2-207 flow chart that would make you plotz).  Article 9, it turns out, is conceptually easy in the big, big picture (attachment, perfection, priority, enforcement, bankruptcy) but full of knotty little problems in the execution.  More importantly, Article 2 was  a creation of the legal realists, who wanted the law to track the way transactions really worked with the idea perhaps that would be more efficient.  In my humble opinion, it manages to be neither realistic nor efficient.  All those "reasonables" and "seasonables" and "trade usages" and "courses of dealing."  Article 9, on the other hand, makes no bones about its arbitrariness.  You pays your money and you takes your chances.  And because it is newly created system laid on top of existing practices (versus Article 2 which attempts to incorporate existing practices, see Lisa Bernstein on this topic), it has, for the most part, like it or not, an internal logic.

Larry Ponoroff, a old pro at this, tells me it was better in the halcyon days before the most recent revision.  I don't know, but if you wanted to trade me Article 2 for Article 9, you'd have to throw in Ronald Coase, Guido Calabresi, and a legal positivist to be named later.

Posted by Jeff Lipshaw on August 12, 2006 at 03:45 PM in Legal Theory, Lipshaw | Permalink


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I'm looking for an A9 flow chart. Know where to get one?

Posted by: Art Neun | Sep 12, 2008 12:22:25 PM

People just look at me funny when I tell them Article 9 was one of my favorite courses in law school, and that I hope to teach it someday. A friend and I loved spinning strange hypotheticals with counterintuitive answers and tormenting each other with them. Even now, when I do research on directors, I very occasionally find something juicy in a filing--a director and CEO co-owning property, for instance--and it gives me a little frisson.

Posted by: Beth Young | Aug 14, 2006 8:30:51 PM

Is the fact that a "filed" financing statement is effective, even if the clerk misfiles it, something to be celebrated? Several of A9's provisions strike me as a cruel joke.

Yes, A9 offers certainty and predictability, but only to those who know the rules. More work for lawyers, I suppose.

Posted by: andy | Aug 13, 2006 5:59:28 AM

We are the few, the chosen, the annointed, the exalted. My name is Tim, and I love UCC Article 9. (Whew, how therapeutic that was for me.)

Posted by: tim zinnecker | Aug 12, 2006 7:24:19 PM

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