The survey that follows highlights the most important developments of 2015 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title, investment securities, and secured transactions. Along with the usual descriptions of interesting judicial decisions in these areas, which are highlighted in the survey, there has also been important legislative progress. The 2010 amendments to U.C.C. Article 9 have been adopted in all fifty states, the District of Columbia, and Puerto Rico. Those revisions were summarized in the Introduction to the 2009 survey. Additionally, the 2012 amendments to U.C.C. Article 4A, which address issues related to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, have been adopted by forty-four states and the District of Columbia, and introduced in Connecticut, Delaware, and Oklahoma

Barnes, Wayne

Marks, Colin P.

Martin, Jennifer S.

English

Texas A&M University School of Law

Texas A&M University School of LawTexas A&M Law ScholarshipFaculty Scholarship2016The Uniform Commercial Code Survey:IntroductionJennifer S. MartinColin P. MarksWayne BarnesTexas A&M University School of Law, wbarnes@law.tamu.eduFollow this and additional works at: https://scholarship.law.tamu.edu/facscholarPart of the Contracts CommonsThis Article is brought to you for free and open access by Texas A&M Law Scholarship. It has been accepted for inclusion in Faculty Scholarship by anauthorized administrator of Texas A&M Law Scholarship. For more information, please contact aretteen@law.tamu.edu.Recommended CitationJennifer S. Martin, Colin P. Marks & Wayne Barnes, The Uniform Commercial Code Survey: Introduction, 71 Bus. Law. 1243 (2016).Available at: https://scholarship.law.tamu.edu/facscholar/1092The Uniform Commercial Code Survey:IntroductionBy Jennifer S. Martin, Colin P. Marks, and Wayne Barnes*The survey that follows highlights the most important developments of 2015dealing with domestic and international sales of goods, personal property leases,payments, letters of credit, documents of title, investment securities, and securedtransactions. Along with the usual descriptions of interesting judicial decisionsin these areas, which are highlighted in the survey, there has also been importantlegislative progress. The 2010 amendments to U.C.C. Article 9' have beenadopted in all fifty states, the District of Columbia, and Puerto Rico.2 Those re-visions were summarized in the Introduction to the 2009 survey.' Additionally,the 2012 amendments to U.C.C. Article 4A, which address issues related to theimplementation of the Dodd-Frank Wall Street Reform and Consumer Protec-tion Act of 2010, have been adopted by forty-four states and the District ofColumbia, and introduced in Connecticut, Delaware, and Oklahoma. 4Other legislative initiatives have seen modest adoptions. In 2011, the UniformLaw Commission completed a new Uniform Certificate of Title for Vessels Actthat is designed to harmonize state certificate of title laws with federal laws re-garding vessels, and with Article 9 to impede theft and facilitate boat financing.5This has been adopted by the States of Virginia and Connecticut and the District* Jennifer S. Martin is a Professor of Law at St. Thomas University School of Law in Miami Gar-dens, Florida. Colin P. Marks is a Professor of Law at St. Mary's University School of Law in San An-tonio, Texas. Wayne Barnes is a Professor of Law at Texas A&M University School of Law in Ft.Worth, Texas. Professors Martin, Marks, and Barnes are the editors of this year's Uniform Commer-cial Code Survey.1. See NAT'L CONFERENCE O COMM'RS ON UNIF. STATE LAws, AMENDMENTS TO UNIFORM COMMERCIAL CODEARTICLE 9 (2010), http://www.uniformlaws.org/shared/docs/ucc9/ucc9-amlO-notstyled.pdf.2. See UCC Article 9 Amendments (2010), Legislative Tracking, UNIFORM L. COMMISSION, http://www.uniformlaws.org/LegislativeFactSheet.aspx?title UCC%20Article%209%20Amendments%20 (2010)(last visited May 13, 2016).3. Russell A. Hakes & Stephen L. Sepinuck, The Unijorm Commercial Code: Introduction, 65 Bus.LAw. 1205, 1205-08 (2010).4. See UCC Article 4A Amendments (2012), Legislative Tracking, UNIFORM L. COMMISSION, http://www.uniformlaws.org/LegislativeFactSheet.aspx?title UCC%20Article%204A%20Amendments%20(2012) (last visited May 13, 2016).5. The final act approved at the 2011 annual meeting of the Uniform Law Commission can be ac-cessed at http://www.uniformlaws.org/shared/docs/certificate of title for vessels/ucotav-prestylefinal-jull .pdf (last visited May 13, 2016).12431244 The Business Lawyer, Vol. 71, Fall 2016of Columbia and is under consideration in Alabama.6 Adoption of the 2003 re-visions to Article 7 continues, with the revisions having been adopted by the Dis-trict of Columbia and forty-nine states and are under consideration in Missouri.7There were also significant and instructive judicial developments in 2015. Therewere interesting developments under Article 2, including a formation decision ap-plying section 2-207 in a case involving a seller that submitted a proposal for adryer system where the buyer responded with its own purchase order that was"expressly made conditional on assent to the terms." When a dispute arose con-cerning the quality of the dryer, the court denied summary judgment, findingthat the buyer's purchase order was not an acceptance but, rather, was a counter-offer and that further proceedings would determine when the contract arose.sThe survey of cases under the United Nations Convention on International Salesof Goods ("C.I.S.G.") covered cases decided in 2015. One notable case raised mul-tiple issues under the C.I.S.G., including formation, finding that the rules of sec-tion 2-207 governing terms that materially alter the offer do not apply, as theC.I.S.G. provisions are closer to the common law mirror image rule.9The leasing survey also includes a number of interesting cases. One case fromthe Eastern District of Michigan involved the characterization of a water supplyagreement to determine if the transaction contemplated by that agreement con-stituted a true lease. The facts considered by the court included, among otherthings, what might be considered a "bundled transaction," property that couldconstitute fixtures, and the respective rights and obligations of parties relatingto an agreement to which neither was an original party. ° In another case outof the Southern District of New York, the court considered a "hell or highwater" clause that barred a party from presenting the defenses of lack of consid-eration and lack of authority. The court cited authority that "hell or high water"clauses are enforceable against "sophisticated parties" and that such a clause con-stitutes a waiver of all challenged defenses (including lack of consideration andlack of authority). 1In the payments area, one of the reported decisions included in this year's sur-vey is a decision that reiterates the courts' reluctance to apply the discovery ruleto toll the statute of limitations in Article 3 and 4 actions. An elderly woman withAlzheimer's had been victimized by a check-forging thief for hundreds of thou-sands of dollars, but the court did not allow the eventual personal representa-6. See Certificate oj Title jor Vessels Act (2011), Legislative Tracking, UNIFORM L. COMMISSION, http://www.uniformlaws.org/Act.aspx?title Certificate%20of%2OTitle%20for%20Vessels%20Act (last vis-ited May 13, 2016).7. See UCC Article 7 Amendments (2003), Legislative Tracking, UNIFORM L. COMMISSION, http://www.uniformlaws.org/LegislativeFactSheet.aspx?title UCC%20Article%207,%20Documents%20of%20Title%20 (2003) (last visited May 13, 2016).8. See Jennifer S. Martin, Sales, 71 Bus. LAW. 1247, 1250-51 (2016).9. See Kristen David Adams & Candace M. Zierdt, International Sales oj Goods, 71 Bus. LAW. 1345,1353-54 (2016).10. See Edward K. Gross, Dominic A. Liberatore & Stephen T. Whelan, Leases, 71 Bus. LAW. 1263,1266-69 (2016).11. Id. at 9-10.The Uniform Commercial Code Survey: Introduction 1245tives of the woman's estate to utilize the discovery rule to toll the Code's three-year statute on account of either the woman's incapacity or the delay in the representative's discovery of the theft. Rather, short of actual concealment by thepayor bank, the statute would not be tolled. Acknowledging the "severe conse-quences" of the holding, the court nevertheless justified its strict ruling on theneed for certainty and uniformity in banking transactions. The case highlightsthe importance of careful attention to bank statements and activity and assistingthose who may be unable to do so for themselves. 12There were several decisions concerning letters of credit in 2015. One casedealt with a letter of credit clause requiring the presentation of the originalstandby letter of credit and arguably the presentation of original amendments,if any, as well. Such clauses are often included in letters of credit, althoughtheir benefits can be outweighed by the burden of compliance. The presentationat issue included the original standby letter of credit, but not every one of theamendments, and the issuer had dishonored the presentation. The decision up-held the requirement of presenting the original standby letter of credit in the faceof clear language, but held that the amendment originals were not similarly re-quired, as the language was ambiguous. The court thus erred on the side of notrequiring presentation of the amendment originals and also held that the presen-tation met the strict compliance standard of section 5-108(a). 13This year saw only a small amount of case law addressing Article 7, includingone case that addressed section 7-307's requirements of bills of lading for theestablishment of a carrier's lien, as well as section 7-209's requirements of ware-house receipts for the establishment of a warehouseman's lien. 14One of the most interesting developments in securities law involved sec-tion 8-115, which shields a broker, securities intermediary, or similar actorfrom liability to a third party for conversion arising out of the actions of the broker'sor intermediary's customer. The Eleventh Circuit looked hard at this provision asapplied against a dense fabric of facts, and ultimately a divided panel upheld ajury verdict holding the broker liable for conversion, notwithstanding the section8-115 shield, because the statute's exception for collusion was held to apply15While the amendments to Article 9 targeted specific commercial law issues,there were judicial decisions on others that continue to challenge lenders.One notable case took up the issue of whether an Article 9 lender with a per-fected security interest in accounts and payment intangibles could claim an in-terest in insurance proceeds of the debtor for business interruption after a tragicderailment accident, finding that Article 9 does not apply to claims under an in-surance policy where the loss was not for damage to collateral but was, instead,for lost business. 1612. See Stephen C. Veltri & Greg Cavanaugh, Payments, 71 Bus. LAw. 1279, 1295-96 (2016).13. SeeJames G. Barnes &James E. Byrne, Letters ojCredit, 71 Bus. LAw. 1299, 1300-1301 (2016).14. See Anthony B. Schutz, Article 7: Documents oj Title, 71 Bus. LAw. 1307, 1309-10 (2016).15. See Carl S. Bjerre, Investment Securities, 71 Bus. LAw. 1311, 1311-14 (2016).16. See Steve Weise & Stephen L. Sepinuck, Personal Property Secured Transactions, 71 Bus. LAw.1345, 1345-46 (2016).

The Uniform Commercial Code Survey: Introduction

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