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 (7th ed. 2006)
2005 Selected Commercial and Debtor-Creditor Statutes (Foundation 2005) (or any similar statutory supplement containing the 1990 version of Articles 3 & 4). Revisions to Articles 3 & 4 were proposed in 2002 but have not yet been widely adopted.
Note – Your book will contain two versions of UCC Article 1. We will use and Whaley’s book will refer to the the “Unrevised” 2000 version contained in Appendix D of the 2005 edition – not the 2001 revised version.
Note – Your book will also contain three (that’s right – 3) versions of UCC Article 3, and two versions of UCC Article 4. These amendments have not yet been widely adopted. Accordingly, we will use and Prof. Whaley’s book will refer to the 1990 version. Fortunately, the 2005 version is nearly identical to the 1990 version. However, for references to a few sections, you will have to consult Appendix I. Most of the changes are minor, such as the addition of several definitions in 3-102 (and the resulting re-numbering of subsections), and the substitution of the word “record” for “writing” in §§ 3-106 and 3-312, 4-212. The most significant changes are those to UCC § 3-602 and in particular 3-605, which we will study in connection with the materials pp. 131-142 on Feb. 14, 2006. Still, it will be a good idea to quickly check the amendments in Appendix I to determine if any of the material in the 2005 version of Article 2 was affected by the 2002 amendments.
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. Your grade will depend on your performance on a final exam given at the end of the semester. During the exam you will be permitted to have with you and use your copy of the assigned course materials and any notes or outlines prepared by you personally.
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 7th ed (6th ed) |
Probs 7th ed (6th ed) |
|
1-1/10 |
Introduction to Payment Law: Types of Instruments |
1-7 |
1-3 |
|
2-1/11 |
Negotiability Cont’d |
7-18 |
4-7 |
|
3-1/13 |
Negotiability Cont’d |
18-25 (19-27) |
8-11 |
|
4-1/17 |
Transfer & Negotiation of Instruments |
27-32 |
12-15 |
|
5-1/18 |
Effect of Forged Endorsement |
32-34 |
16-19 |
|
6-1/20 |
Holder in Due Course Status: Holder & Value |
35-39 |
20-23 |
|
7-1/24 |
Holder in Due Course Status: Good Faith & No Notice |
39-59 Assn 7) |
24-26 |
|
8-1/25 |
HDC Status cont’d: Good Faith & No Notice |
59-69 |
27-29 |
|
9-1/27 |
HDC Status: Shelter Rule |
69-77 (67-76) |
30-32 |
|
10-1/31 |
HDC Rights: Freedom from Defenses |
77-85 (76-85) |
33-36 |
|
11-2/1 |
HDC Rigihts: Freedom from Defenses cont’d |
85-100 |
37-40 |
|
12-2/3 |
Defenses against an Assignee who is not an HDC & Jus Tertii |
100-108 |
41 |
|
13-2/7 |
Liability of the Parties: The Underlying Obligation |
109-116 |
42-44 |
|
14-2/8 |
Liability of the Parties: On the Instrument - Makers & Endorsers |
116-120 |
45-48 |
|
15-2/10 |
Liability of the Parties: On the Instrument - Sureties |
120-130 |
49-52 |
|
16-2/14 |
Liability of the Parties: On the Instrument - Suretyship & Accomodation Party Defenses |
130-138 |
53-55 |
|
17-2/15 |
Liability of the Parties: On the Instrument: Suretyship & Accomodation Party Defenses cont’d |
138-142 |
56-58 |
|
18-2/17 |
Liability of the Parties: Drawers - Secondary Liability |
142-150 |
59-60 |
|
19-2/21 |
Liability of the Parties: Drawers - Excuse |
150-153 |
61-62 |
|
20-2/22 |
Liability of the Parties: Drawees |
153-160 |
63-64 |
|
21-2/24 |
Liability of the Parties: Signatures of Agents |
160-168 |
65-68 |
|
22-2/28 |
Banks & their Customers: Properly Payable Checks |
169-173 |
69-73 |
|
23-3/1 |
Banks & their Customers: Wrongful Dishonor |
173-185 (186-198) |
74-76 |
|
24-3/3 |
Banks & their Customers: Stop Payment |
185-194 |
77-80 |
|
25-3/7 |
Banks & their Customers: Stop Payment cont’d |
194-201 |
81-82 |
|
26-3/8 |
Banks & their Customers: Bank Statements & Funds Availability |
201-216 |
83-86 |
|
27-3/10 |
Banks & their Customers: Check Truncation |
216-222 (Assn 27) |
|
|
28-3/14 |
Check Collection Process: Final Payment |
223-225 (225-228) |
90-93 |
|
29-3/15 |
Check Collection Process: Final Payment cont’d; Return of Dishonored Checks & Charge-back |
226-238 (228-252)
|
94-96 Ass’n 29) |
|
30-3/17 |
Check Collection Process: Undoing Final Payment |
238-240 |
97-99 (94-95; 97) |
|
31-3/28 |
Check Collection Process: Restrictive Endorsements; Priorities in Bank Accounts |
240-244 |
100-102 |
|
32-3/29 |
Wrongdoing & Error: Forged Endorsements - Warranty |
245-250 |
103-107 |
|
33-3/31 |
Wrongdoing & Error: Forged Endorsements - Conversion |
250-257
|
108-112 |
|
34-4/4 |
Wrongdoing & Error: Forged Drawer’s Name |
257-267 (272-282) |
113-115 |
|
35-4/5 |
Wrongdoing & Error: Validation of a Forgery |
267-276 |
116-121 |
|
36-4/7 |
Wrongdoing & Error: Validation of a Forgery cont’d |
276-293 |
121-128 |
|
37-4/11 |
Wrongdoing & Error: Validation of a Forgery cont’d |
293-303 |
129-135 |
|
38-4/12 |
Wrongdoing & Error: Material Alteration of an Instrument |
303-305 |
136-139 |
|
39-4/14 |
Electronic Banking: Electronic Funds Transfer Act |
307-316 |
140-147 |
|
40-4/18 |
Electronic Banking: Wire Transfers |
316-322 |
148-151 |
|
41-4/19 |
Electronic Banking: Wire Transfers cont’d |
322-339 (335-354) |
152-153 |
|
42-4/21 |
Electronic Banking: Wire Transfers cont’d |
339-346 (354-362) |
154-155 (151-152) |
|
Review Session |
|
|
|
These additional materials, contained in the 7th edition, but not in the 6th edition, are available on TWEN in the “Course Materials” Forum for this class.