Document Type

Article

Publication Year

2002

Journal Title

Oklahoma City University Law Review

Abstract

Article Extract:

It goes without saying that a national economy cannot function efficiently without a core set of commercial laws to provide a stable base. Can you imagine the added costs of doing business if common transactions were governed by truly idiosyncratic laws in the various states? We had just such a situation in secured-finance law before the widespread adoption of Article 9 of the Uniform Commercial Code. Creditors seeking to use personal property as security faced a bewildering array of devices-pledge, chattel mortgage, conditional sale, assignment of accounts receivable, trust receipt, equipment trust, factor's lien, etc. Some of the devices were statutory in origin while others sprang from the common law. Some nonpossessory devices required a public filing as a means of avoiding problems stemming from a debtor's ostensible ownership of collateral, others did not. The rules governing a particular device were often unclear, and the consequences of making a mistake, either in choosing or implementing a device, were draconian. The system routinely imposed high transaction costs on lenders. These costs were reduced dramatically by the nationwide success of a uniform law-Article 9 of the Uniform Commercial Code.

The need for uniformity does not mean that there is no room for states to assert their individual interests in matters that do not go to the core of a particular law. Federal legislation provides uniformity, but it must of necessity be one-size-fits-all. The genius of the uniform law process is that it creates general uniformity while providing the states with an escape valve for the promotion of local interests. It is my view that this process is essential to the functioning of our federalist system, particularly at a time when Congress, largely through its use of the commerce clause of the Constitution, has assumed extraordinarily broad legislative authority

I share the views expressed by Professor Miller regarding the strength of the uniform laws process as compared with the process by which legislation is developed at the federal level. However, the fact that the Conference turns out a superior product, while important, does not fully justify its existence as an organization. The greater justification, in my mind, stems from the Conference's role as a bulwark of federalism.

First Page

525

Last Page

530

Num Pages

6

Issue Number

2

FIle Type

PDF

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