robert a. zadek edwin e. smith - americanbar.org filejuly 1999 2 commercial law newsletter join the...

July 1999 Commercial Law Newsletter

Katherine S. Allen – Co-Editor Steven O. Weise – Co-EditorMESSAGE FROM THE CHAIR:COMMERCIAL FINANCIAL SERVICES COMMITTEE

By Robert A. ZadekBuchalter, Nemer, Fields & Younger

San Francisco, CA

Lots of stuff going on with the Committee. Wehave formed a new Subcommittee dealing withInternational Commercial Financial Transactions;Mike Carsella and Marcy Cohen will be co-chairs. Please advise me by email if you wish tojoin and I will have you appointed.

George Fogg is moving along with postings ofour State Law Survey to the home page - no dateyet for the initial draft but it should be soon.

The Annual Meeting will be in Atlanta. The ABAhas mailed out registration forms. Our hotel isthe Atlanta Hilton and Towers, downtown.

We will meet in Toronto on November 3, 1999 inconnection with the Annual Convention of theCommercial Finance Association. TheConvention and our meeting will be at theSheraton Center (or is it Centre?) Hotel. Usuallyrooms go pretty fast so be sure to register early.

Please check the Committee home page for allmaterial concerning each meeting.

MESSAGE FROM THE CHAIR:UNIFORM COMMERCIAL CODE COMMITTEE

By Edwin E. SmithBingham Dana LLP

Boston, MA

The 1999 Annual Meeting will be my lastmeeting as Chair of the Uniform CommercialCode Committee. With my four-year termexpiring in August, Linda Rusch will besucceeding me as Chair.

In building upon the work of predecessorChairs, such as Amy Boss and Fred Miller, andin working with all of you, I have found it both apleasure and an honor to serve as Chair of theCommittee. The projects tackled by theCommittee during this four-year period havebeen many and varied, and the successeshave been the result of hard work by the broadCommittee leadership and the active membersof the subcommittees and task forces.

But there is still much work to be done. Thereare the mature projects that need the guidanceof the Committee. UCC Revised Article 9 isbeing introduced in legislatures throughout thecountry to meet the July 1, 2001, uniformeffective date deadline. Revisions to UCCArticles 2 and 2A are scheduled to beapproved in July by the National Conference ofCommissioners on Uniform State Laws, as isthe much anticipated Uniform ElectronicTransactions Act. The Uniform Computer

July 1999 2 Commercial Law Newsletter

JOIN THE UCC COMMITTEE AT THE 1999 ANNUALMEETING IN ATLANTA, AUGUST 6-10, 1999

By Linda Rusch, Chair-ElectProfessor of Law

Hamline University School of Law

The UCC Committee has a full schedule ofmeetings on Saturday, Sunday and Monday atthe ABA Annual Meeting in Atlanta. Comeand learn about what is happening in the UCC,as we approach the end of the revisions thathave been taking place over the course of thelast decade. Revised Article 9 was finished in1998 and is currently being presented in thestates. Revised Articles 2 and 2A havereceived final approval from the ALI and are upfor final approval at the Annual Meeting ofNCCUSL in July 1999. Former Article 2B, nowthe Uniform Computer InformationTransactions Act, and the Uniform ElectronicTransactions Act are also slated for finalapproval at the NCCUSL Annual Meeting thissummer. Article 1 is still in the revisionprocess and is scheduled for completion in thenext year or two.

Mindful of the upcoming turn of thecentury/millennium and Year 2000 issues,Stephanie Heller has arranged for ThomasBaxter, Federal Reserve Bank of New York, topresent a short program on “Y2K and the UCC:What Every Commercial Lawyer Should Know”during the UCC Committee meeting onSaturday, from 2:30-4:00 p.m. In addition, thefollowing programs are sponsored by the UCCCommittee:

♦ Sunday: 2:30-4:30 p.m. Commercial FinanceAnnual Appellate Argument (co-sponsored byCommercial Financial Services, AmericanCollege of Commercial Finance Lawyers,Business Bankruptcy and Uniform CommercialCode)

♦ Monday: 8-10 a.m. Revised Article 2: MajorChanges and Their Significance

♦ Monday: 2:30-4:30 p.m. Overcoming 10Potential Pitfalls of Electronic Contracting

The UCC Committee is also sponsoring a firsttimer’s reception on Sunday from 5-6 p.m.This is a great time to connect with old friendsand make some new friends. So come andjoin in the fun in Atlanta. I look forward toseeing you there.

Message from the UCC Chair, Con’t.

Information Transactions Act will also beconsidered by the National Conference thissummer and may also meet with Conferenceapproval. Moreover, the United States Senatemay consider the UNIDROIT FactoringConvention and the UNIDROIT Convention onInternational Financial Leasing.

There are also the projects that are nearingcompletion and for which the Committee’sinput remains as crucial to the success of thelegislation. These include revisions of UCCArticle 1, the Consumer Leases Act, theFederal Intellectual Property Security Act, theUNIDROIT Convention on internationalsecurity interests in mobile equipment and theUNCITRAL Convention on cross-borderreceivables.

And there are the projects that are in the mindsof many of us as worthy of a statutory focus.The creative energies and leadership of thisCommittee in the area of commercial lawshould never be underestimated.

So, with gratefulness to my predecessorChairs, the Committee leadership and all ofyou, with some pride in the accomplishmentsof the Committee during these last four yearsand with great expectations for future work ofthe Committee, I will turn the leadership overto Linda. I have every faith the Linda will makea superb Chair for the years ahead.


ISP98: NEW STANDBY RULES

By Professor James E. Byrne*Montgomery Village, MD

After more than five years of preparation, theInternational Standby Practices (ISP98)became effective on 1 January 1999.Designed specifically for the US$700 billionstandby market, ISP98 addresses issueswhich have long caused unnecessarynegotiation and drafting and have led tolitigation and unexpected loss. ISP98 isendorsed by the International FinancialServices Association (formerly the USCIB) andthe Commission on Banking Technique andPractice of the International Chamber ofCommerce (ISP98 has been designated ICCPublication no. 590). ISP98 is expected to beused widely, and indeed, standbys havealready been issued subject to it. It hasalready received international acclaim for themanner in which it resolves long-standingissues in standby practice and there are wide-spread reports that the language of ISP98 isalready being used not only in standbys buteven in commercial LCs.

Need For Separate Rules. In the course of thediscussions surrounding the formulation of theUN Convention on Independent Guaranteesand Stand-by Letters of Credit, it became

* Professor Byrne is Director of the Instituteof International Banking Law & Practice, Inc. P.O. Box2235, 20405 Ryecroft Ct., Montgomery Village, MD.20886. Tel. (301) 869 - 9840, Fax. (301)926 - 1265, e-mail: [email protected]. Professor Byrne served asReporter for the ISP Project and Chairs the Council onInternational Standby Practice. Further information onmaterials discussed in this article and others is availableon the ISP’s website: www.isp98.com, or directly fromthe Institute of International Banking Law & Practice,Inc.

apparent that there was a serious lack ofunderstanding in many parts of the world ofstandby practices and of the potential uses ofstandbys. Despite the fact that many standbysare issued subject to the Uniform Customs andPractice for Documentary Credits (UCP), it wasonly of minimal help. Its focus is uponcommercial letters of credit and many of itsprovisions are inappropriate for standbys (as isimplied in UCP 500 Article 1) and it is variedregularly. For example:

♦ UCP Article 17 (Force Majeure) isunacceptable to most standby beneficiarieswho are not prepared to bear the risk ofunexpected issuer closure on the expirydate.

♦ While the requirement of UCP Article 21

that documents be not inconsistent withone another is sensible for commercialcredits, it is not sensible under standbyswhere there is less reason to expect thatdocuments will be consistent.

♦ The attempt to allude to standbys in UCP

Article 41 (Installment Shipments/Drawings)by adding the term “drawings” introducesdifficulties since the failure to make one ofa series of available drawings under astandby is not expected to result in theunavailability of future drawings.

♦ The UCP Article 43 provisions on latest

date for shipment protects against staledocuments of title but, in a commercialstandby, the documents are typicallyexpected to be stale.

♦ Transfer of commercial credits often

involves multiple partial transfers but isexpected to occur only once, whereas thetypical transferable standby contemplatesmultiple transfers but no partial transfers.


More significantly, many of the issues whichtrouble standby practice are not evenaddressed in the UCP, such as:

♦ Terms commonly used in connection withstandbys such as “evergreen”, “automatic”,“clean”, and “unconditional” want clarification.

♦ There is no standardization of requirementsregarding typical documents presented.

♦ It is unclear whether a demand to extend orpay should be treated as a documentarypresentation requiring examination and noticeof discrepancies.

♦ It is often unclear what is required when astandby calls for indications of sincerity ortruthfulness (solemnity, certification &affirmation) of statements contained indocuments.

♦ It is often unclear to an applicant that an issuerexpects to be able confidentially to discloseconfidential applicant financial informationwithout permission in participating out astandby. It may also be unclear that aparticipation does not affect the rights of thebeneficiary.

♦ It is often unclear whether a standby whichrecites or contains the text of an underlyingindependent local guarantee which it backs upalso requires a determination of compliancewith the independent guarantee or whether thedocuments presented under it must beexamined if they are forwarded.

♦ It is not uncommon for a legal successor to anamed beneficiary of an untransferred anduntransferable standby to make a drawing in itsown name and not that of the namedbeneficiary, but there is no guidance for such asituation.

♦ While standbys are frequently syndicated orparticipated out, there is no delineation ofvarious obligations and rights in suchsituations.

♦ There is no indication as to the limitations uponthe obligation of banks regarding anassignment of proceeds.

As a result of the absence of rules thatadequately address these common standbysituations and others, considerable time andenergy are unnecessarily wasted negotiatingprovisions, drafting language, correctingoversights and errors, and litigating disputes.Many of these difficulties could be avoided orreduced by standard rules. Even where theparties choose to vary them, such rules wouldprovide a starting point for negotiations. The argument that standbys are too complexto admit of such rule making or standardizationflies in the face of experience. Commercialcredits and the documents presented underthem are far more varied and complex thaneven a complicated financial standby and yetstandardized rules have evolved which simplifythe practice associated with them. The ISP Project.The ISP Project Since therewas no effort underway to formulate standbyrules and the ICC Banking Commission haddecided not to make any of the adjustments forstandbys requested by the U.S. letter of creditcommunity in the UCP 500 revision, the U.S.Department of State requested the U.S. letterof credit community coordinated by theInternational Financial Services Association(formerly the U.S. Council on InternationalBanking, Inc.) and the Institute of InternationalBanking Law & Practice, Inc. to take the leadin formulating standby rules in consultationwith letter of credit communities throughout theworld. In addition, the project has beensponsored by Citibank, N.A., The ChaseManhattan Bank, N.A., ABN AMRO, Baker &McKenzie, and the National Law Center forInter-American Free Trade. The process whichfollowed actively sought the participation ofevery segment of the letter of credit communityincluding bankers, users, attorneys, regulators,


rating agencies, government officials,international agencies, and academics. While the project began in the United States,the place of origin of the standby, it assumed atruly international character. Banks andbanking associations from all parts of the worldmet and provided comments and advice on thevarious drafts. Furthermore, the participationof the UNCITRAL Secretariat provided animportant link to non U.S. legal systems.Widespread participation and support led bythe U.S. standby community assures ISP98 astrong base from the outset. The extensiveparticipation of other countries opens thepossibility of a truly international system which,while not strictly speaking necessary, would behighly desirable. With the formation and workof the ICC Ad Hoc Task Force under theleadership of Gary Collyer, Vice President,Midland Bank (London), the experience andwisdom of the Banking Commission of theInternational Chamber of Commerce wasapplied to the finalization of the draft. At therecommendation of its Task Force, theBanking Commission endorsed the ISP inMarch 1998. ISP98. The present result of these efforts isISP98. ISP98 seeks to assure for standbypractice the same integrity from these self-standing rules as is provided for commercialcredits under the UCP and independentguarantees under the URDG. ISP98establishes generally accepted norms forstandbys which can either be accepted ormodified, using them as a starting point fornegotiations. Where different approaches existunder standby practice, the ISP follows themost widely accepted approach. Where theUCP contains a rule, the ISP was designed tofollow the UCP approach unless standbypractice required a different result. Even wherethe ISP rule tracks the UCP, however, it isoften drafted with more detail to addresssituations which have been problematic understandbys. The ISP also utilizes a style,

phraseology, and vocabulary which differsfrom that of the UCP. This approach reflects the need for standbyrules which past muster before ratingagencies, insurance commissioners,investment bankers, government procurementofficers, and sophisticated corporate partiesand their counsel. As a result, the ISP is moreprecise in


its language than the formulary language ofthe UCP and addresses matters in a moresystematic fashion. For example, although it isassumed that the document required under acommercial LC is to be an original unless theLC states otherwise, the UCP does notexpressly so provide. The ISP begins with thisfundamental proposition and then addressesthe problem of copies. ISP98 is organized to correspond with theprocessing of a standby. It begins with GeneralProvisions which contain information on scope,general principles, and definitions. Part 2addresses obligations including issuance,nomination, and amendment. Parts 3, 4 and 5include rules on presentation, examination,and notice, respectively. The other partsaddress transfer, assignment of proceeds,transfer by operation of law, cancellation,reimbursement, timing, andsyndication/participation. ISP98 is intended to supplement local law.While local law, of course, controls, it typicallydefers to standard international practice onmany of these issues. Two examples areRevised UCC Sections 5-112 and 5-114,which relate to transfer and assignment. ISP98 resolves the problems caused by theUCP provisions intended for commercial LCs.For example, ISP98 Rule 3.14 provides for anautomatic 30 day extension if the place forpresentation is closed on the last business dayfor presentation and permits the issuer todesignate another reasonable place forpresentation. ISP98 also addresses standby issues nottreated in the UCP. In the case of merger orname change of the issuer or confirmer, forexample, ISP98 Rule 4.14 permits thebeneficiary to use either name in any requireddocument. ISP98 Rules 4.16 - 4.19 providenorms for specific documents including

demands, statements of default, negotiabledocuments, and legal or judicial documents. Ongoing oversight will be provided by apermanent Council on International StandbyPractices which will be charged withformulating official responses to queries andwith revising the Rules. Implementing ISP98. With the adoption ofISP98, it is necessary for banks, governments,and corporate users to formulate a plan beforeusing it. While it will be necessary to determinewhether ISP98 is preferred (involvingoperational and legal consideration), it is alsonecessary to decide whether it is acceptableand, if used, what provisions should bemodified. Even if determined not to bedesirable, other parties (e.g., the issuer, thebeneficiary, or the applicant) may insist uponit. For example, even if a corporation shoulddecide to wait using it, they may be thebeneficiary of standbys issued subject to it ortheir major bank may make a policy decision touse it. In that case, the company will need todetermine whether to accept its use and seekmodifications or to resist it. In either case,familiarity with ISP98 is essential. Others whowork with standbys (e.g., attorneys) will needto acquaint themselves intimately with the ISP. The Official Commentary to ISP98 has beenwritten and published by the Institute ofInternational Banking Law & Practice, Inc. Atmore than 300 pages, it provides detailedinsights into the rules of ISP98, their origin,and the principles by which they are to beinterpreted and applied. The Institute alsoconducted seminars throughout the US,Europe and Asia in Fall 1998, with talks givenby a team of a banker and an attorney whowere involved in drafting ISP98 and areintimately familiar with its provisions. Conclusion. The formulation of the ISP marksthe coming of age of standby practice. ISP98


will increase the standardization of clausesand typical documents, decreasing the needfor lengthy negotiations over commonprovisions.

Already S.W.I.F.T. has initiated efforts tocreate standard message types for standbys.All told, these developments will lead togreater certainty and availability of standbyswhich, in turn, will lead to greater use inmarkets and circumstances where there is aneed for a dependable means of payment.

UNIFORM ELECTRONIC TRANSACTIONSACT By C. Robert Beattie Oppenheimer, Wolff and Donnelly Minneapolis, Minnesota The Uniform Electronic Transactions Act(UETA) is expected to be finalized this summerand readied for consideration by statelegislatures in the upcoming legislativeseason. The drafting committee completed itswork this spring and is presenting a final draftof the act for approval at the annual meeting ofthe National Conference of Commissioners onUniform State Laws (NCCUSL) in Denver inlate July. The UETA is an enabling act, primarilyprocedural in nature, designed to foster broadacceptance of electronic signatures andrecords in commercial and governmentalsettings. The act’s principal provision statesthat a record, signature or contract may not bedenied legal effect or enforceability solelybecause it is in electronic form or was formedusing electronic means. If a law requires arecord or signature to be in writing, anelectronic record or signature satisfies thatlaw. The UETA is by its nature an "opt in" statute.No party is required to do businesselectronically, although an agreement to do somay be determined from the context sand


circumstances surrounding the transaction,including conduct of the parties. The scope of the act is broad, applying to theuse of electronic records and signaturesrelating to any transaction other than thosegoverned by laws relating to the creation ofwills, codicils and testamentary trusts, or otherlaws, if any, to be specifically identified bystate legislatures. In keeping with NCCUSL’S charge that theUETA be consistent with and not duplicative ofthe Uniform Commercial Code (UCC), the actwill not apply to transactions subject to certainportions of the UCC, notably those articlesdealing with the payment system (3, 4 and 4A)and documents of title (7), and those articleswhich have recently been revised and alreadyaddress issues of commerce in media neutralterms (5, 8 and 9). The UETA will also notapply to transactions subject to revised articles2 and 2A of the UCC or the Uniform ComputerInformation Transactions Act (formerly knownas Article 2B of the UCC) when those acts areadopted. The legal consequences of use of electronicrecords and signatures are generally left toother law. The UETA contains only a limitednumber of provisions that are substantive innature. The UETA gives guidance onsatisfying in an electronic mannerrequirements of other law as to the form ofsending or displaying information. It also setsforth rules on attribution and effect ofelectronic records, which look primarily to thecircumstances surrounding creation of thesignature or record. The act gives no specialweight to any particular form of electronicsignature or record, but clearly authorizes theuse of electronic agents (those computerprograms or other means of contracting that donot require review by an individual) in theformation of contracts.

The UETA contains provisions dealing withchanges or errors in electronic records,affording parties some degree of protection ifsecurity procedures designed to detect errorsor changes are employed, and allowingindividuals to undo "inadvertent" electronictransactions as long as the individual has notreceived the benefit of the considerationreceived and takes prompt steps to notify theother party to the transaction and to return ordestroy any consideration received. In other provisions, the UETA: ♦ allows for electronic notarization;

♦ permits the conversion of written records toelectronic records and the destruction of theunderlying written records, if the conversionproduces an accurate result that can beaccessed for later review;

♦ allows the use of electronic records andsignatures for evidentiary purposes even if theyare not originals or in their original form;

♦ provides rules for determining when anelectronic record is sent and received;

♦ permits the use of transferrable electronicnotes or documents of title, if the means existboth to demonstrate the party who has controlof the transferable record, and to allowidentification of the original record andpreclude revision of the original without theconsent of the party having such control;

♦ establishes a regimen for the use andacceptance of electronic records andsignatures by government agencies ;

The latest draft of the UETA can be found at theNCCUSL website for drafts of uniform and modelacts at www.law.upenn.edu/library/ulc/ulc/htm.


E-COMMERCE LAW PROJECTS SEEKPARTICIPANTS

By Jane K. WinnSouthern Methodist University

Dallas, Texas

Two working groups of the ElectronicCommerce Subcommittee of the CyberspaceLaw Committee of the Business Law Sectionhave projects underway that may be of interestto those looking to learn more about cuttingedge e-commerce applications and thecommercial law issues they raise. The work ofthese working groups will be conducted largelyby means of participation in e-mail listservdiscussions, with reference to works-in-progress posted to temporary websites untilthe output of the projects are finalized.Information about all the Cyberspace LawCommittee activities is available at theCommittee's website at: http://www.abanet.org/buslaw/cyber.

Electronic Negotiable Instruments. TheTransferability of Electronic Assets WorkingGroup is working on a white paperprovisionally titled "Can an electronicnegotiable instrument be created by contract?"This issue will be relevant if, as expected, thePermanent Editorial Board soon appoints astudy group to consider whether furtherrevisions are needed to UCC Article 3 topermit the use of electronic checks andpromissory notes. Some informed observersbelieve that a master trading partneragreement or clearinghouse agreement shouldbe sufficient to establish the electronicequivalent of a negotiable instrument. Otherinformed observers point to the language inthe comment 2 to §3-104, which states:"Although a writing cannot be made anegotiable instrument within Article 3 bycontract or conduct of its parties..." Theworking group hopes to have a draft of the

white paper completed by the Annual Meeting,and looks forward to a lively and informeddebate of these issues there.

Professor Jane Winn of SMU Law School inDallas, Texas and Professor Paul Shupack ofCardozo Law School in New York are the co-chairs of this working group. Anyoneinterested in joining the listserv once it hasbeen set up should contact Joanne Harrisonby email at [email protected] forinstructions on how to subscribe. Subscribersto the discussion group list will be giveninstructions by e-mail for finding the websitefor the draft white paper once it has beenposted. Professor Paul Shupack will be themoderator of the e-mail discussion group andcan be reached by email [email protected]. Professor Jane Winnwill be the webmaster for the work-in-progresswebsite.

Electronic Contract Clause Bank. TheElectronic Contracting Practices WorkingGroup is working on a "clause bank" that willassist attorneys working to update existingform contracts to take into account newelectronic contracting practices. The WorkingGroup plans to collect model contractprovisions, or if none can be found, to draftmodel contract provisions and annotate them,to assist attorneys in determining under whatcircumstances it might be appropriate to use aparticular clause. Examples of contractclauses that might need to be updated includeintegration clauses, provisions governingsignatures, provisions governing amendmentor modification of electronic contracts,standards for conspicuous notice in electroniccontracting, determination of the location ofparties to electronic contracts, ownership ofinformation captured from electronictransactions and privacy issues, or datastorage requirements.


Professor Jane Winn of SMU Law School inDallas, Texas and Professor Christine Kunz ofWilliam Mitchell Law School in Minneapolis arethe co-chairs of this working group. Anyoneinterested in joining the listserv once it hasbeen set up should contact Joanne Harrisonby email at [email protected] for


instructions how to subscribe. James BryceClark of Spolin & Silverman LLP in SantaMonica, California is the moderator of thelistserv and will be webmaster for the work-in-progress website. James Clark can bereached by email at [email protected].

The CFS Committee provides severalcorrections to its Leadership List as publishedin the March 1999 issue of The CommercialLaw Newsletter, as follows:

þ REAL ESTATE LENDING SUBCOMMITTEE

Steven Flessig, Vice-ChairFriedman Siegelbaum LLPSeven Becker Farm RoadRoseland, NJ 07068T (973) 992-1990F (973) [email protected]

þ INTELLECTUAL PROPERTY FINANCINGSUBCOMMITTEE

Peter Munoz, Co-ChairCrosby, Heafey, Roach & MayTwo Embarcadero Center, 19th FloorSan Francisco, CA 94111Telephone: (415) 543-8700Fax: (415) 391-8269E-mail: [email protected]

James Schulwolf, Co-ChairPepe & Hazard225 Asylum StreetGoodwin SquareHartford, CT 06103Telephone: 860-522-5175Fax: 860-522-2796Email: [email protected]

þ MEMBERSHIP SUBCOMMITTEE

James Schulwolf, ChairPepe & Hazard225 Asylum StreetGoodwin SquareHartford, CT 06103Telephone: 860-522-5175Fax: 860-522-2796Email: [email protected]

Chuck Cobbe, Vice-ChairCampbell & Cobbe, P.C.900 Jackson Street, Suite 120Dallas, TX 75202Telephone: 214-742-3600Fax: 214-742-5106

The UCC Committee provides the followinginformation:

ý UCC COMMITTEE CONTACT FOR THEUNIFORM CONSUMER LEASES ACT:

Michelle A. HughesClark & Stant, P.C.One Columbus CenterVirginia Beach, Virginia 23462-6762Telephone: 757-499-8800Telecopier: 757-473-0395Email: [email protected]

ý UCC COMMITTEE CONTACT FOR UCCARTICLE 2A— LEASES:

Lawrence F. Flick, IIBlank Rome Comisky & McCauley, LLPOne Logan SquarePhiladelphia, Pennsylvania 19103Telephone: 215-569-5556Telecopier: 215-569-5522Email: [email protected]

MAILBAG AND MISCELLANY


Please note the following additional changesand corrections:

. Catherine Bauer’s new e-mail addressis: [email protected]

. Walter Eccard’s new telephone numberis 202-691-3520.

. Dan Greenwood’s new e-mail addressis: [email protected].

. Meredith Jackson’s new address is:Irell & Manella LLP1800 Avenue of the Stars, Suite 900Los Angeles, CA 90067Telephone: (310) 203-7953Fax: (310) 556-5393email: [email protected]

. C. Robert Beattie’s new address is:Oppenheimer, Wolff and DonnellyPlaza VII45 South Seventh Street, Suite 3400Minneapolis, MN 55402-1609Telephone: (612) 607-7000Fax: (612) 607-7100e-mail [email protected]

♦ TRADES Regs. Walter Eccard reports thatthe U.S. Treasury Department’s Bureau ofthe Public Debt’s website (located atwww.publicdebt.treas.gov/cc/cctrades.htm)includes an article on RecentDevelopments with respect to Treasury’s“TRADES” Regulations. The articlesummarizes and explains the TRADES(Treasury/Reserve Automated Debt EntrySystem) regulations, for securities held inthe commercial book-entry system. It alsocontains citations for the similar regulations

adopted by various government-sponsoredenterprises (such as Fannie Mae andFreddie Mac). There is also a helpful list ofthe 50 states (and other jurisdictions) thatTreasury has determined have adoptedversions of revised UCC Article 8 of theUCC that are “substantially identical” to theuniform version.

♦ ABA Business Law Section:www.abanet.org/buslaw

♦ ABA Joint Committee on ElectronicFinancial Services:www.abanet.org/buslaw/efss/home.html

♦ UCC Revision Drafts:www.law.upenn.edu/library/ulc/ulc.htm

♦ UCC Revised Article 2:www.law.upenn.edu/library/ulc/ulc.htm#ucc2

♦ UCC Revised Article 9:www.law.upenn.edu/library/ulc/ucc9/ucc9woc.htm

♦ UCITA Drafts www.2bguide.com

♦ NCCUSL Meeting Schedule:

www.nccusl.org/meetings.html

♦ UNCITRAL draft convention on cross-border receivables assignments:www.abanet.org/ftp/pub/buslaw/home.html

♦ Uniform Electronic Transactions Act Drafts:www.abanet.org/nccusl/home.html

♦ UNIDROIT and UNCITRAL web pages forthe ongoing international commercial lawprojects: http://www.unidroit.org/ andhttp://www.uncitral.org/

INTERNET SITES OF INTEREST


CFS COMMITTEE LISTSERV

The Commercial Financial Services Committeeonly communicates with its members through aList Serve. If you are a member of theCommittee, and not a member of the list, youshould join immediately, by sending thefollowing email message [email protected]:

subscribe bl-cfsc [your email address] [Donot include the brackets.]

The List is the only way members can get lastminute meeting information, information aboutopenings in Committee Leadership, requestsfor speakers and presenters, and other timesensitive communications.

If you want to know if you are a member. sendthe following message to the listserver: whobl-cfsc. Within a few minutes you will receivea list of all subscribers, in no particular order.Just search the list (using your email searchlogic) for your email address.

WEST GROUP--UCCLAW-L LISTSERV

The UCC Committee does not yet have anofficial ABA listserv like the CFS Committeedoes, but many UCC Committee memberssubscribe to the UCCLAW-L listserv(sponsored by West Group, Publisher of theUniform Commercial Code Reporting Service,with assistance from WashLawWEB) andmoderated by the editors of the UCCBulletin/UCC Reporting Service.

To subscribe to the list, send an e-mailmessage to [email protected],leaving the subject line blank and includingonly the following message: subscribeUCClaw-L[your name

You will receive a welcome message andadditional instructions.

BUSINESS LAW TODAY

Got a great idea for a cutting edge story? Didyou know that you can simultaneouslycontribute an article to the Commercial LawNewsletter and to Business Law Today? It ispermissible so long as the submission to themagazine meets the BLT guidelines. For thedetails on what those guidelines are, go to theBusiness Law Today web site.

Still have questions?

E-mail Meg Milroy at [email protected].

NOTE:This Newsletter is published by the UniformCommercial Code Committee and theCommercial Financial Services Committee ofthe American Bar Association’s Section ofBusiness Law. The views expressed are theviews of the authors only, and are notnecessarily those of the ABA, the Section oreither Committee. Please contact KatherineS. Allen, Farris Warfield & Kanaday, PLC,Nashville, [email protected] or Steven O.Weise, Heller Ehrman White & McAuliffe,Los Angeles, [email protected] withcomments.


SUBCOMMITTEE ON UCC ARTICLE 1

Sarah Howard Jenkins, ChairUniversity of Arkansas at Little Rock

Fred H. Miller, Vice-ChairUniversity of Oklahoma Law Center

At its Spring Meeting in San Francisco, theSubcommittee on UCC Article 1 deliberatedextensively the preemptive goals of theUniform Commercial Code as reflected inSections 1-102, 1-103, and 1-104 and theimpact these goals should have in the revision,if any, of Section 1-103. While the mereexistence of Section 1-103 may not defeat thepreemptive goals reflected in current Section1-102, the Subcommittee debated whether thelanguage of the text of current Section 1-103and its comment were harmonious with thesepreemptive goals. Furthermore, a questionwas raised on whether the limited purpose ofSection 1-104, prohibiting implied repeal of theAct by subsequent legislation, was properauthority to support any revision of Section 1-103 to limit supplementation of the Act byprinciples of common law and equity.

After much discussion of the policiesexpressed in Section 1-102 and the value ofthe 50 years of experience under the Act, theSubcommittee focused on the revision ofSection 1-103 in the September 1997 draft.Revised Article 1 merges the texts of currentSections 1-102 and 1-103.

SECTION 1-102. CONSTRUCTION OF ACTTO PROMOTE ITS PURPOSES AND POLICIES; APPLICABILITY OF SUPPLEMENTAL PRINCIPLES OF LAW.

(a) [The Uniform Commercial Code] must beliberally construed and applied to promote itspurposes and policies, which are:

(1) to simplify, clarify, and modernize thelaw governing commercial transactions;

(2) to permit the continued expansion ofcommercial practices through custom, usage,and agreement of the parties; and

(3) to make uniform the law among thevarious jurisdictions.

(b) Principles of law and equity may be used tosupplement [the Uniform Commercial Code],except to the extent that those principles areinconsistent with

(1) either the terms [Alternative A -- orthe purposes and policies of] [Alternative B --of, or the principles embodied by,] a particularprovision of [the Uniform Commercial Code]; or

[(2) the purposes and policies identifiedin subsection (a)].

Although approving, in general, theclarification of the role of supplemental law, thedesignation of supplementation as permissiverather than mandatory and the inclusion offactors for determining if supplementation isappropriate, the Subcommittee concluded thatsubstituting the term “inconsistent” for“displaced” and then deleting the illustrativeexamples of supplemental law, especially “lawmerchant,” created newer and perhaps morecomplicated problems.

Finally, the Subcommittee addressed therelationship, if any, between Section 1-103 andinternational commercial law. Given the statedpurposes and policies of the UCC (1) tosimplify, clarify and modernize the lawgoverning commercial transactions and (2) topermit the continued expansion of commercial

UCC SUBCOMMITTEE REPORTS


practices through custom, usage andagreement, the Subcommittee debated theneed, if any, to facilitate resort through Section1-103 to law merchant, especially tointernational law initiatives such as theUNIDROIT Principles.

For an elaborate discussion of these and otherissues pending before the subcommittee,watch for the Spring 2000 symposium issue ofthe SMU Law Review, Part I, dedicated toarticles on Revised Article 1, or visit theSubcommittee during the Annual Meeting ofthe ABA in Atlanta, Georgia. TheSubcommittee will convene on Saturday,August 7, 1999. A read through of the July-August 1999 draft of Revised Article 1 will bethe sole agenda item. Location of the meetingas well as copies of the draft may be obtainedfrom the Subcommittee website before themeeting. For additional information or toobtain an application for subcommitteemembership, contact Sarah Jenkins [email protected] or Fred Miller [email protected] or visit the Sub-committeewebsite:www.abanet.org/buslaw/cfs-ucc/ucc/subcommframe.html

SUBCOMMITTEE ON PAYMENTS

Stephanie A. Heller, ChairFederal Reserve Bank of New YorkNew York, NY

Paul S. Turner, Vice ChairLos Angeles, CA

Thanks to everyone who attended theSubcommittee meeting at the Spring Meetingin San Francisco. I think everyone will agreethat the panel discussion on intangibleinstruments was extremely timely andinformative. The discussion consideredwhether it is possible to have true intangible

negotiable instruments and, if it is possible,

how the UCC would need to be revised toaccommodate such instruments. If, as hasbeen rumored, NCCUSL establishes a draftingcommittee to consider revisions to Articles 3and 4 to address intangible instruments, theSubcommittee will establish a work group toprovide feedback to the drafters.

At the Annual Meeting of the ABA in Atlanta,the Subcommittee has invited a guest speakerto discuss the ways in which intellectualproperty rights can affect the development ofnew payment systems. Developments inintellectual property law in recent years,particularly in the area of patent law, make itessential that every payments lawyer be awareof fundamental IP principles. One needs onlyto look at the Wachovia check image patentsand the Financial Service TechnologyConsortium e-check patent to know thatintellectual property issues affect all of usinvolved in the development of new paymentproducts as well as the development of newbusiness methods for delivering establishedpayment products.

If time permits, Paul Turner, Vice Chair of theSubcommittee, will identify ambiguities in theliability provisions of Article 4A and solicit theviews of the Subcommittee on the need toresolve these ambiguities. One of these is theconflict between an apparently enforceablereporting provision in a funds transferagreement (e.g., the customer must reportfraudulent transfers within 30 days) andnonvariable liabilities of the bank under Article4A (e.g., the bank is liable for fraud when ithas not complied with an agreed-upon securityprocedure). Another issue is whether a bankcan enforce a disclaimer of liability for its ownerrors. A draft of a proposed PEB commentaryaddressing these issues and illustrations ofthese and other Article 4A ambiguities will be


posted to the Committee website prior to, anddistributed at, the Subcommittee meeting.

The Subcommittee Meeting is scheduled forAugust 8, 1999 at 10:00 am.

If there are any members of the Subcommitteeon Payments or the Uniform Commercial CodeCommittee that have new projects or issuesthat they wish the Subcommittee to entertain,please contact Stephanie Heller at 212-720-8198.

SUBCOMMITTEE ON LETTERS OF CREDIT

James E. Byrne, ChairMontgomery Village, MD

The International Standby Practices (ISP98), anew set of rules of practice specificallydesigned for standbys, has been the focus ofrecent meetings of the Letter of CreditSubcommittee and of a program at the recentSan Francisco Business Law Section SpringMeeting. Now that the rules are in place, theattention of the Subcommittee has shifted to ageneral interest in developments in the field.

The session at the August Annual Meeting willfeature a presentation by former Chair, JamesG. Barnes of Baker & McKenzie (Chicago), onthe problem of what constitutes an originaldocument. Since the UK decision in Glencore,there has been debate and confusion as towhether or not documents presented must bestamped "original" under UCP500 Article20(b). Subsequent UK decisions have addedto the confusion. To address the situation, theInternational Financial Services Association(the trade association of major banks involvedin LCs) has issued a paper outlining itspractice. In addition, the Technical Adviser tothe International Chamber of CommerceBanking Commission has proposed an

approach to the problem, which was recentlydiscussed at the Banking Commission meetingin April 1999. Jim Barnes will take the

Subcommittee through the variouspermutations of the problem and proposedsolutions and discuss practical steps to avoidproblems under the current regime.

In addition, the Subcommittee will discuss thestatus of Revised UCC Article 5 (including thenon-conforming amendments and the status ofthe revision in New York), implementation ofthe ISP and U.S. adoption of the UNConvention on Independent Guarantees andStand-by Letters of Credit. With the year wellunderway, cases to be considered for theAnnual Survey for The Business Lawyer alsorequire attention and several current cases willbe discussed.

SUBCOMMITTEE ON UCC LITIGATION

Jill S. Gelineau, ChairSchwabe, Williamson & WyattPortland, OR

Thanks to Michael Ferry. At our lastSubcommittee meeting, held at the BusinessLaw Section Spring Meeting in San Francisco,we had a great presentation by Michael Ferryfrom St. Louis, Missouri on the recentlyadopted Standards and Guidelines forLitigating and Settling Consumer ClassActions, adopted by the National Associationof Consumer Advocates. For those of you whocould not attend, I have a couple of extracopies of the Guidelines with a very interestingcommentary in my office and would be happyto forward one to anybody that is interested.


Upcoming Meeting in Atlanta. The BusinessLaw Section meets at the Annual Meeting inAtlanta on August 7 through 10. The UCCSubcommittee on Litigation does not meet but

the UCC Committee as a whole has someinteresting programs which will be of value tothose who are interested.

Thanks to Steve Sanford. Every other yearthe editors of The Business Lawyer ask alitigator from our subcommittee to prepare theUCC Litigation Survey for The BusinessLawyer. This year, Steven Sanford in SiouxFalls, South Dakota, prepared the article,which will be a survey of important UCClitigation cases that have been published in thelast two years. Keep an eye out for anupcoming edition of The Business Lawyer tosee Steve’s article.

Ideas for other Projects. Much of the efforts ofthe UCC Committee of the Business LawSection has been devoted to drafting revisionsto various articles of the Uniform CommercialCode. However, that work is coming to an endand there will be more focus on other aspectsof the Uniform Commercial Code, andespecially litigation. If any readers have anyideas for projects or ways we can use the skillsof our subcommittee, please give me a call.

TASK FORCE ON STORED-VALUE CARDS

Thomas C. Baxter, Jr., ReporterFederal Reserve Bank of New York

At the Spring Meeting in San Francisco, theTask Force on Stored Value Cards held itsfinal meeting. The Task Force, which wassponsored by the UCC Committee’s

Subcommittee on Payments, the Banking LawCommittee’s Subcommittee on Payments andElectronic Banking, and the Committee onCyberspace Law, was established to study thecommercial law issues associated with storedvalue products. The primary objective of theTask Force was to consider the extent to whichthe commercial law of the United States maybe applied to stored value products, assumingthat no contracts or regulations would governthe new payments products. In February1997, the Task Force issued a reportaddressing this issue, A Commercial Lawyer’sTake on the Electronic Purse: An Analysis ofCommercial Law Issues Associated withStored-Value Cards and Electronic Money, 52Bus. Law 653 (Feb. 1997).

Since the publication of the initial Task ForceReport, the Task Force considered the needfor a second report on the commercial lawissues associated with multifunction storedvalue cards. Due to the continuing evolution ofthese products, the consensus of the groupwas that a second report would be prematureat this time. The Task Force believes that theissues and principles articulated in the firstreport are as relevant for multiapplicationcards as they are for single function storedvalue cards.

Over the past two years, the Task Force has:(1) served as a clearinghouse for informationconcerning stored value products; and (2)provided input on state and federal law storedvalue initiatives. In this regard, the Task Forcedevoted part of each of its meetings to aroundtable discussion of stored valuedevelopments. The Task Force also providedNCCUSL with its views concerning the needfor a new uniform state law on stored valueproducts, the need for a rule on how storedvalue escheats, and the appropriateparameters with respect to stored value of auniform law on money transmitters.


At its meeting in Atlanta, the Task Forceconcluded that, given the current level ofactivity in the stored value area, there was nolonger a need to keep the Task Force active. Iwould like to take this opportunity to thankeveryone who participated in Task Forcemeetings and projects.


♦ Loan Workouts Subcommittee

SUBCOMMITTEE ON CREDITORS’ RIGHTS

Catherine E. Bauer, ChairBank of AmericaLos Angeles, CA

Philip Warden, Vice-ChairPillsbury, Madison & SutroSan Francisco, CA

The next meeting of the Creditors' RightsSubcommittee will be in Atlanta on Saturday,August 7, 1999 from 2:00 to 3:30 in Salon A ofthe Hilton Towers and Convention Center.This will be a joint meeting with the BankruptcyLitigation Subcommittee of the Business andCorporate Litigation Committee chaired byPhilip Warden of Pillsbury, Madison & SutroLLP, San Francisco.

We have a distinguished panel discussing"Hot Topics in Bankruptcy." Our panelists willbe the Honorable Stacey Cotton, Chief Judge,U.S. Bankruptcy Court, Northern District ofGeorgia, the Honorable Margaret A. Mahoney,Chief Judge, U.S. Bankruptcy Court, SouthernDistrict of Alabama, R. Neal Batson of Alston &Bird LLP, Atlanta, and H. Elizabeth Baird,Assistant General Counsel, Bank of America,S.A.

The Supreme Court's recent decision in the203 La Salle Partnership case and the hotly-debated bankruptcy legislation will be amongstour discussion topics.

All who are interested are invited to attend!

INTELLECTUAL PROPERTY FINANCINGSUBCOMMITTEE

Peter Munoz, Co-ChairCrosby, Heafey, Roach & MaySan Francisco, CA

James Schulwolf, Co-ChairPepe & HazardHartford, CT

The Intellectual Property FinancingSubcommittee held a successful meeting inSan Francisco on April 15,1999 at the SpringMeeting of the Business Law Section of theABA . Over 100 attorneys attended. Thetopics included:

♦ The Practical Issues of Lender Monitoring,Preserving and Recovering on a Website,Warren E. Agin (Swiggart & Agin, Boston, MA);

♦ Software Financing Issues, Leianne S.

Crittenden, (Senior Corporate Counsel, OracleCorporation);

♦ A report on the status of legislation dealing with

security interests in intellectual property, JohnMuller (Brobeck Phleger & Harrison, SanFrancisco, CA); and

♦ An update on In re Catapult Entertainment, Inc.

by Peter S. Munoz (Crosby Heafey Roach &May, San Francisco, CA).

Copies of the program materials on topics 2, 3,and 4 are available on the Subcommittee’swebsite. Due to copyright issues, WarrenAgin's program materials could not be posted,but he is willing to provide a hard copy via"snail mail," and can be contacted at (617)742-0110 or [email protected]. TheSubcommittee is planning on conductinganother meeting in Atlanta at the Annual ABAmeeting. One of the topics will cover further

CFS SUBCOMMITTEE REPORTS


developments in federal legislation to deal withthe Avalon and Peregrine decisions.

SECURED LENDING SUBCOMMITTEE

Jeffrey S. Turner, ChairBrobeck, Phleger Harrison LLPLos Angeles, CA

Meredith Jackson, ChairIrell & Manella LLPLos Angeles, CA

At the Joint Meeting of the Secured LendingSubcommittee of the Commercial FinancialServices Committee and the SecuredTransactions Subcommittee of the UniformCommercial Code Committee in SanFrancisco, four dynamic panelists revealedtheir insights into the changing creditenvironment in light of the recent marketvolatility.

Paul Phaneuf, Head of High Yield for CreditLyonnais Securities, Elizabeth Reno, SeniorBusiness Development Officer for FleetCapital, Eric Swanson, Co-Head of SeniorDebt Origination for Donaldson, Lufkin &Jenrette Securities Corporation, and PerryWhite, heading the west coast SyndicatedFinance Group at Nationsbanc MontgomerySecurities LLC were co-presenters.Considering the parameters for differentfinancing vehicles, the convergence of thecapital markets, the changing identities ofpurchasers who buy various financial productsand the structures of the deals that get done,the panelists addressed the credit crunch, theextent of revitalization of the market and theresulting changes.

The Subcommittees intend to continuefollowing recent developments in the securedlending arena.

SUBCOMMITTEE ON REAL ESTATE FINANCING

Thomas A. Snow, ChairCarlton FieldsTampa, FL

The Real Estate Financing Subcommittee helda very successful Spring Meeting in SanFrancisco this past April. Our featuredspeakers were Jim Chadwick of Patten Bond,Dallas, Nancy Little of McGuire Woods inRichmond, and Jack Murray, VicePresident and Special Counsel for FirstAmerican Title Insurance Company ofChicago. Our panelists discussed the legaland practical issues involved in “syntheticleasing.”

Our next meeting will be held on Saturday,August 7, Noon-2:00 p.m. at the annual ABAmeeting in Atlanta. The topic of ourpresentation in Atlanta will be the use ofenvironmental liability insurance and otherlegal and practical solutions to dealing withactual or potential environmental liability oncecontamination is discovered in the process ofloan closing due diligence. Our discussion willbe led by Laurel Lockett, of the Tampa office ofCarlton Fields.

Should any subcommittee members also wishto present short reports concerning currentcase law, please contact Tom Snow at(813)229-4201 or via e-mail [email protected].

Remember theUCC/CFS Committee Joint

Website:http://www.abanet.org/buslaw/cfs-

ucc/home.html


ARTICLE 1 - GENERAL PROVISIONS

ARTICLE 1 - GENERAL PROVISIONSLatest Draft:September, 1997Status: Drafting Committee's next meeting notscheduled.UCC Committee Contact: Sarah Howard Jenkins(501) 324-9937 or Fred Miller (405) 325-4699.

ARTICLE 2 – SALES

ARTICLE 2 – SALESLatest Draft: Annual MeetingDraft July 1999Status: ALI approved draft at annual meeting,May 1999. Up for final approval at NCCUSL July1999 annual meeting.UCC Committee Contact: David J. Frisch(302) 477-2119.

ARTICLE 2A – LEASES

ARTICLE 2A – LEASESLatest Draft: AnnualMeeting Draft July 1999Status: ALI approved draft at annual meeting, May1999. Up for final approval at NCCUSL July 1999annual meeting.UCC Committee Contact: Lawrence F. Flick, II(215) 569-5555.

ARTICLE 5 - LETTERS OF CREDIT

ARTICLE 5 - LETTERS OF CREDITLatest Revision1995. Revised Article 5 is being presented to thestates for adoption, and has been adopted by atleast 38 states.UCC Committee Contact: James G. Barnes(312) 861-2854.

ARTICLE 7 - DOCUMENTS OF TITLE

Latest Draft: No draft.Status: The Article 7 Task Force has beenreactivated. NCCUSL has asked the Task Forceto prepare a report on the issues that an Article 7revision would likely address. The Task Force isopen to anyone who wants to participate. TheTask Force hopes to have a report to NCCUSL bySummer 2000.

UCC Committee Contact: Drew L. Kershen (405)325-4784.

UCC SCORECARD -- REVISIONS


ARTICLE 8 – INVESTMENT SECURITIES

Latest Revision 1995: Revised Article 8 is nowbeing presented to the states for adoption, andhas been adopted by all states other than RhodeIsland and South Carolina.UCC Committee Contact: Sandra M. Rocks (212)225-2780.

ARTICLE 9 – SECURED TRANSACTIONS; SALES OFACCOUNTS AND CHATTEL PAPER

ARTICLE 9 – SECURED TRANSACTIONS; SALES OFACCOUNTS AND CHATTEL PAPER Latest Revision:1998 Final Official DraftStatus:. Revised Article 9 is approved and is beingpresented to the states for adoption. It has beenintroduced in ten states.UCC Committee Contact: Steven O. Weise (213)244-7831.

UNIFORM ELECTRONIC TRANSACTIONS ACT

UNIFORM ELECTRONIC TRANSACTIONS ACTLatestDraft: Annual Meeting Draft July 1999.Status: Up for final approval at NCCUSL AnnualMeeting, July 1999UCC Committee Contact: C. Robert Beattie, (612)607-7000

UNIFORM CONSUMER LEASES ACT

UNIFORM CONSUMER LEASES ACTLatest Draft:April 1999Status: Drafting Committee’s next meeting notscheduled.UCC Committee Contact: Michelle Hughes (757)499-8800.

UNIFORM COMPUTER INFORMATION TRANSACTIONSACTLatest Draft: Annual Meeting Draft July 1999.(Formerly UCC Article 2B.)Status: Up for final approval at NCCUSL AnnualMeeting, July 1999UCC Committee Contact: Donald A. Cohn(302) 773-3521.


BUSINESS LAW SECTION PUBLICATIONS

The Portable UCC: Second Editionedited by Corinne Cooper

The Portable UCC is in a compact, convenient size, and includes the complete text of theUCC as amended through 1995, including revised Articles 5 and 8. Best of all, it has anextremely comprehensive and easy to use subject index. (Priced from $17.95 to $29.95,depending on the number of copies ordered.)

♦ The ABCs of the UCCSeries edited by Amelia Boss

These primers on each article of the UCC are written for both practitioners and students.Each book cuts out the footnotes and convoluted discussions that often accompany legalliterature to provide just the basic UCC concepts and operation of the Code -- in a simple,straightforward style. (Each costs $29.95 for Business Law Section members and $14.95for students.)

Article 1: General Provisions, by Fred H. Miller and Kimberly J. Cilke

Article 2: Sales, by Linda J. Rusch and Henry D. Gabriel

Article 2A: Leases, by Amelia H. Boss and Stephen T. Whelan

Article 3: Negotiable Instruments and Article 4: Bank Deposits and Collections, byStephen C. Veltri

Article 4A: Funds Transfers, by Thomas C. Baxter, Jr. and Stephanie A. Heller

Article 5: Letters of Credit, by James G. Barnes, James E. Byrne and Amelia H. Boxx

Article 8: Investment Securities, by Sandra M. Rocks and Carl S. Bjerre

Article 9: Secured Transactions, by Russell A. Hakes

New:Related and Supplementary Consumer Law, by Fred H. Miller and Cindy Hastie

A Commercial Lawyer’s Take on the Electronic Purse: An Analysis of CommercialLaw Issues Associated with Stored-Value Cards and Electronic Money, byStephanie Heller, Thomas Baxter, Jr. and the Task Force on Stored Value Cards

To order, call the ABA Service Centerat 1-800-285-2221


UCC SCORECARD

50 State Survey of Adoptions ofRevised Official Text of the UCC

AS OF May 3, 1999

STATESArticle 2A1

(1990)Articles 3&4

(1990)Article 5(1995)

Article 62

(1989)Article 8(1994)

Article 9(1998)

Alabama Enacted '92 Enacted '95 Enacted '97 REPEAL '96 Enacted '96 No Action

Alaska Enacted '93 Enacted '93 Intro HB 79 REPEAL '93 Enacted '96 No Action

Arizona Enacted '92 Enacted '93 Enacted '96 REVISE '92 Enacted '95 Intro HB 2235

Arkansas Enacted '93 Enacted '91 Enacted '97 REPEAL '91 Enacted '95 No Action

California Enacted '91 Enacted '92 Enacted '96 REVISE '90 Enacted '96 Intro SB 45

Colorado Enacted '91 Enacted '94 Enacted '96 REPEAL '91 Enacted '96 No Action

Connecticut Intro HB 5135 Enacted '91 Enacted '96 REPEAL '93 Enacted '97 No Action

Delaware Enacted '92 Enacted '95 Enacted '98 REPEAL '96 Enacted '97 No Action

District ofColumbia

Enacted '92 Enacted '94 Enacted '97 REVISE '97 Enacted '97 No Action

Florida Enacted '90 Enacted '92 No Action REPEAL '93 Enacted '98 No Action

Georgia Enacted '93 Enacted '96 No Action No Action Enacted '98 No Action

Hawaii Enacted '91 Enacted '94 Enacted '96 REPEAL '98 Enacted '97 Intro SB 1582HB 1626

Idaho Enacted '93 Enacted '93 Enacted '96 REPEAL '93 Enacted '95 No Action

Illinois Enacted '91 Enacted '91 Enacted '96 REPEAL '91 Enacted '95 No Action

Indiana Enacted '91 Enacted '93 Enacted '96 REVISE '97 Enacted '95 Intro SB 409

Iowa Enacted '94 Enacted '94 Enacted '96 REPEAL '94 Enacted '96 No Action

Kansas Enacted '91 Enacted '91 Enacted '96 REPEAL '92 Enacted '96 No Action

Kentucky Enacted '90 Enacted '96 No Action REPEAL '92 Enacted '96 No Action

Louisiana No Action Enacted '92 No Action REPEAL '91 Enacted '95 No Action

Maine Enacted '92 Enacted '93 Enacted '97 REPEAL '92 Enacted '97 Intro LD 2245

Maryland Enacted '94 Enacted '96 Enacted '97 No Action Enacted '96 Enacted '99

Massachusetts Enacted '96 Enacted '98 Enacted '98 REPEAL '96 Enacted '96 No Action

Michigan Enacted '92 Enacted '93 Enacted '98 REPEAL '98 Enacted '98 No Action

Minnesota Enacted '91 Enacted '92 Enacted '97 REPEAL '91 Enacted '95 No Action

Mississippi Enacted '94 Enacted '92 Enacted '96 REPEAL '94 Enacted '96 No Action

Missouri Enacted '92 Enacted '92 Enacted '97 No Action Enacted '97 Intro SB 506

Montana Enacted '91 Enacted '91 Enacted '97 REPEAL '91 Enacted '97 Enacted '99

Nebraska Enacted '91 Enacted '91 Enacted '96 REPEAL '91 Enacted '95 Intro LB 550


STATESArticle 2A1

(1990)Articles 3&4

(1990)Article 5(1995)

Article 62

(1989)Article 8(1994)

Article 9(1998)

Nevada Enacted '91 Enacted '93 Enacted '97 REPEAL '91 Enacted '97 Intro SB 62

NewHampshire

Enacted '93 Enacted '93 Enacted '98 REPEAL '93 Enacted '98 No Action

New Jersey Enacted '94 Enacted '94 Enacted '98 REPEAL '94 Enacted '97 No Action

New Mexico Enacted '92 Enacted '92 Enacted '97 REPEAL '92 Enacted '96 No Action

New York Enacted '94 No Action No Action No Action Enacted '97 No Action

North Carolina Enacted '93 Enacted '95 Intro SB 245 Intro SB 129 Enacted '97 No Action

North Dakota Enacted '91 Enacted '91 Enacted '97 REPEAL '93 Enacted '97 No Action

Ohio Enacted '92 Enacted '94 Enacted '97 REPEAL '96 Enacted '97 No Action

Oklahoma Enacted '91 Enacted '91 Enacted '96 REPEAL '97 Enacted '95 Intro SB 249

Oregon Enacted '89 Enacted '93 Enacted '97 REPEAL '91 Enacted '95 No Action

Pennsylvania Enacted '92 Enacted '92 Intro SB 805 REPEAL '92 Enacted '96 No Action

Puerto Rico3 No Action Enacted '95 Enacted ‘97 Not Applicable Enacted '96 No Action

Rhode Island Enacted '91 No Action No Action No Action No Action No Action

South Carolina Intro SB 293 No Action No Action No Action No Action No Action

South Dakota Enacted '891 Enacted '94 Enacted '98 REPEAL '93 Enacted '98 No Action

Tennessee Enacted '93 Enacted '95 Enacted '98 REPEAL '98 Enacted '97 No Action

Texas Enacted '93 Enacted '95 Enacted '99 REPEAL '93 Enacted '95 Intro SB 1058

Utah Enacted '93 Enacted '93 Enacted '97 REPEAL '96 Enacted '96 No Action

Vermont Enacted '94 Enacted '94 Enacted '98 REPEAL '94 Enacted '96 Intro HB 25

Virginia Enacted '91 Enacted '92 Enacted '97 REVISE '97 Enacted '96 No Action

Washington Enacted '93 Enacted '93 Enacted '97 REPEAL '93 Enacted '95 No Action

West Virginia Enacted '96 Enacted '93 Enacted '96 REPEAL '92 Enacted '95 Intro SB 662

Wisconsin Enacted '92 Enacted '96 No Action No Action Enacted '98 No Action

Wyoming Enacted '91 Enacted '91 Enacted '97 REPEAL '91 Enacted '96 No Action

Please note that the Enactment Date does not necessarily reflect the effective date. Please refer to theapplicable statute for the relevant effective date._____________________Our thanks to John McCabe and Katie Robinson at the National Conference of Commissioners on UniformState Laws for their help in compiling the information above. These revisions are based on the informationavailable as of May 3, 1999._____________________

1 South Dakota has adopted only 1987 Official Text without the 1990 Amendments.

2 States which have repealed Article 6 are identified by indicating "Repeal" next to the state name; states adopting the revisionssuggested in Alternative B to the 1989 Official Text are identified by indicating "Revise" next to the state name.

3 In addition to the enactments noted, Puerto Rico has only adopted the following Articles: Article 1, Article 4A, the original versions ofArticle 5 and Article 7, and the 1972 version of Article 9.


Section of Business Law Application for Membership

¨ I, am applying for membership in the ABASection of Business Law and enclose $ as my annual membershipdues for the year 1999-2000. I understand that Section dues include $20 for a basicsubscription to The Business Lawyer for one year and $14 for a basic subscription toBusiness Law Today for one year; these subscription charges are not deductible fromthe dues, and additional subscriptions are not available at these rates.

Dues:

$45 for an ABA member FREE for a member of the ABA Law Student Division

Membership in the American Bar Association is a prerequisite to enrollment in the Section ofBusiness Law.

¨ Please send me an application to join the American Bar Association.¨ Please send me information on joining the UCC Committee.¨ Please send me information on joining the CFS Committee.

Complete and return to:

ABA Section of Business Law750 N Lake Shore DriveChicago, IL 60611

For further information, call (312) 988-5588

ABA member ID: Date: Name: Firm: Address: City: State: Zip: Phone: Business ( ) Home ( ) ¨ Payment enclosed. (Make check payable to American Bar Association.)¨ VISA ̈ MasterCard ̈ American ExpressCard No. Exp. Date Signature

Please sign and date this applicationNOTE: Membership dues in the American Bar Association and ABA Sections, Divisions and Forums are notdeductible as charitable contributions for federal income tax purposes. However, such dues may be deductible asbusiness expenses.

robert a. zadek edwin e. smith - americanbar.org filejuly 1999 2 commercial law newsletter join the...

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