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Commercial Law in the Legal Academy

posted by Adam Levitin

Brian Leiter's been running a poll about what areas of law and legal study deserve more attention from the legal academy. I was rather surprised by the choices in the poll: areas that I've always thought are well-covered like family law are included, while commercial law isn't even on the list. (One might express similar surprise about bankruptcy, which is a related, but distinct field, but that's another matter.) The poll includes "consumer law," but that's a pretty different area, as a lot of commercial law is about business-to-business transactions.   

While many of us on this blog teach commercial law courses and write on areas touching commercial law (secured credit informs all our work), there really aren't very many people actively writing in the classical commercial law areas of sales, payments, and secured lending or even in commercial finance more broadly. Larry Garvin's written a whole article about this.

Maybe Brian's perspective is shaped by having taught at two schools (Texas and Chicago) that are unusually well stocked with people writing in commercial law and related areas. And perhaps commercial law is getting (very wrongly) lumped together with corporate law. (Does anyone even mention Delaware in commercial law classes? And does anyone mention the ALI or ULC in corporate law classes?) I have certainly observed a tendency among my colleagues writing in other areas to lump all business law classes together under the rubric of "corporate law". This is sort of like lumping admin and fed courts together. 

My sense is that the decline of academic commercial law is partially responsible for some of the astounding confusion regarding what is required to foreclose and the interplay between UCC Article 3, Article 9, real estate recordation, and MERS (an ersatz UCC Aritcle 8 attempt). Commercial law classes used to be standard law school courses. They're not any more at many schools, not least to the supply of academics working in the area, and that may be having real consequences for our legal system.   


Commercial law--at least financing law--is alive and well in the big law firms and the bankruptcy courts. I'm not worried about the future of financing law, even though it appears to be withering in the academy.

Payment law, however, has become a recondite specialty of a few banking lawyers, mostly in-house. (A few biglaw firms active in banking know their derivatives law.) The bench has not kept up, and academia is as Adam described. Worse yet, the UCC isn't as useful as one could hope. There is little codified in the law of bank deposits, substantial deference to clearing house rules in UCC 4, 4A, and 8, no codification of new payment systems, and a lot of strange case law out there--with the older stuff being of higher intellectual quality but less conceptual relevance. (Back then, the good judges actually knew their payment law.) The "electronic records" codifications in the UCC and UETA are a conceptual disaster.

There is a real need for strong academic input to help the judges in payment law. This goes well beyond MERS. And the standard teaching approach to payment law isn't particularly helpful--way too much emphasis on checks.

I can't say anything intelligent about sales and leasing law.

Thanks for sharing the Gavin article. It was a quick and interesting read.

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