CAPITAL UNIVERSITY LAW SCHOOL

COMMERCIAL PAPER
  PROF. FERRIELL - SPRING 2009

SYLLABUS

INTRODUCTION

Welcome to Commercial Paper, known now at some schools as “Payment Systems”.

In this course you will study the law of Negotiable Instruments under UCC Article 3 (primarily checks and promissory notes); the Check Collection Process under UCC Article 4, certain Federal Reserve Board Regulations, and the Expedited Funds Availability Act; and Electronic Funds Transfers under UCC Article 4A and the Federal Electronic Funds Transfer Act.

REQUIRED MATERIALS

Douglas Whaley, Problems and Materials on Payment Law (8th ed. 2008) ISBN13 978-0-7355-6566-1  ISBN10: 0-7355-6566-X

2008 Selected Commercial and Debtor-Creditor Statutes (Foundation 2008) (or any similar statutory supplement containing the 1990 version of UCC Articles 3 & 4).  Revisions to Articles 3 & 4 were proposed in 2002 but have not yet been widely adopted. ISBN 978-1-59941-526-0

NotePre-2001 Version of UCC Article 1.  Your statutory supplement will contain two versions of UCC Article 1.  Prof. Whaley's citations are to the pre-2001 version and those are what we will use. It appears in Section 3 of Part 1 of the assigned statutory supplement, beginning at p. 1049.  If you're unsure which version of Article 1 you are consulting, see if § 1-201 is divided into 1-201(a) and (b)(1)-(47) (the new version) or 1-201(1)-(46) (without an (a) or (b)) (the pre-2001 version).  About half of the states have adopted the new version of Article 1; the other half still have the pre-2001 version.  One of my jobs this, as an Ohio NCCUSL Commissioner, is to try to get revised Article 1 adopted in Ohio. To see if any particular state has adopted the new version see the NCCUSL web site at www.nccusl.org

Note 1990 Version of UCC Articles 3 & 4.  Your book also contains two versions of UCC Articles 3 and 4. The 2002 revisions to articles 3 & 4 have been adopted in only a few states, not including Ohio, but are currently pending in New York, a significant banking state. Prof. Whaley’s book refers to the pre-revision, 1990 version and that is what we will use.  Note that an appendix to his book contains the 1990 version of UCC § 3-605, that is still applicable in Ohio and most other states.

COURSE REQUIREMENTS

Course requirements will include: 1) class preparation, attendance, and participation; 2) a final exam.

Attendance. I expect you to attend every regularly scheduled class session unless circumstances beyond your control make this impracticable (Cf. UCC 2-615). 

Preparation. I expect you, as well, to prepare for every class and participate in class discussions on a volunteer basis and when called upon.   

Final Exam. Unless limited due to excessive absences, your grade will depend on your performance on a final exam given at the end of the semester.  The final exam will be closed book. You may not have any materials with you during the exam.

READING ASSIGNMENTS

These assignments include any relevant statutory provisions mentioned in the textual material, including annotations associated with those statutory provisions (e.g., Official Comments to the U.C.C.) contained in the statutory supplement.

Class-Date

Topic

Pages

Probs

1-1/13

Introduction to Payment Law: Types of Instruments

1-7

1-3

2-1/15

Negotiability Cont’d

7-18

4-7

 1/16 No Class Class Cancelled - Make-up Review Session in Late April or early May Before the Exam    

3-1/20

Negotiability Cont’d

18-25

8-11

4-1/22

Transfer & Negotiation of Instruments

27-32

12-15

5-1/23

Effect of Forged Endorsement

32-34

16-19

6-1/27

Holder in Due Course Status: Holder & Value

35-39

20-23

7-1/29

Holder in Due Course Status: Good Faith & No Notice

39-59

24-26

8-1/30

HDC Status cont’d: Good Faith & No Notice

59-69

27-29

9-2/3

HDC Status: Shelter Rule

69-77

30-32

10-2/5

HDC Rights: Freedom from Defenses

78-86

33-36

11-2/6

HDC Rigihts: Freedom from Defenses cont’d

86-100

37-40

12-2/10

Defenses against an Assignee who is not an HDC & Jus Tertii

100-109

41

13-2/12

Liability of the Parties:  The Underlying Obligation

111-118

42-44

14-2/13

Liability of the Parties: On the Instrument - Makers & Endorsers

118-122

45-48

15-2/17

Liability of the Parties: On the Instrument - Sureties 

122-133

49-52

16-2/19

Liability of the Parties: On the Instrument - Suretyship & Accomodation Party Defenses

133-140

53-55

17-2/20

Liability of the Parties: On the Instrument: Suretyship & Accomodation Party Defenses cont’d

140-145

56-58

18-2/24

Liability of the Parties: Drawers - Secondary Liability

145-153

59-60

19-2/26

Liability of the Parties: Drawers - Excuse; Drawee Liability

153-163

61-64

20-2/27

Liability of the Parties: Signatures of Agents

163-171

65-68

21-3/3

Banks & their Customers: Properly Payable Checks

173-177

69-73

22-3/5

Banks & their Customers: Wrongful Dishonor & Death of a Customer

178-184

74-77

23-3/6

Banks & their Customers: Setoff & Right to Stop Payment

184-199

78-81

24-3/10

Banks & their Customers: Stop Payment cont’d

199-207

82-83

25-3/12

Banks & their Customers: Bank Statements & Funds Availability

207-221

84-87

26-3/13

Banks & their Customers: Check Truncation

221-228

88-90

27-3/17

Check Collection Process: Final Payment

228-231

91-94

28-3/19

Check Collection Process: Final Payment cont’d; Return of Dishonored Checks & Charge-back

231-251

95-97

29-3/20

Check Collection Process: Undoing Final Payment

251-253

98-100

30-3/31

Check Collection Process: Restrictive Endorsements; Priorities in Bank Accounts

253-257

101-103

31-4/2

Wrongdoing & Error: Forged Endorsements - Warranty

259-264

104-108

32-4/4

Wrongdoing & Error: Forged Endorsements - Conversion

264-271

109-113

33-4/7

Wrongdoing & Error: Forged Drawer’s Name

271-85

114-116

34-4/9

Wrongdoing & Error: Validation of a Forgery

285-294

117-122

35-4/10

Wrongdoing & Error: Validation of a Forgery cont’d

294-311

123-129

36-4/14

Wrongdoing & Error: Validation of a Forgery cont’d

311-322

130-136

37-4/16

Wrongdoing & Error: Material Alteration of an Instrument

322-323

137-140

38-4/17

Electronic Banking: Electronic Funds Transfer Act

323-334

141-148

39-4/21

Electronic Banking: Wire Transfers

334-340

149-152

40-4/23

Electronic Banking: Wire Transfers cont’d

340-357

153-154

41-4/24

Electronic Banking: Wire Transfers cont’d

358-365

155-156

42-TBA Review Session    

Final Exam 5/5

Final Exam 9-12

1-365

1-156