article 1 amendments and article 2 revisions and UCC and speidel

Those who have taught and studied Sales Law in the last five years have come face to face with a dilemma. The two UCC articles most relevant for the law of sales are Articles ("A") 1 (general provisions) and 2 (sales), but each of them was in the process of revision in the 1990s and early 2000s. While the revisions for A 1 were accepted more quickly by NCCUSL and the ALI and the process was shorter (1998-2001), A 2 faced a much more contentious process. A drafting committee for A 2 was appointed in 1989, which proposed what was known as a "hub and spokes" model for sales/leases (in which the central principles would be articulated and then the three "spokes" of sales, leases and information would receive separate treatment). This model was scrapped with some acrimony in the mid-1990s and, under industry pressure, "computer information" was removed from consideration of the revisers in the late 1990s. Then, they decided to call the changes to A 2 "revisions" rather than "amendments" (note that it is "amended Article 1") because revisions were not considered to be as thoroughgoing as amendments. Finally, by 2003 a few revisions to A 2 were accepted by both bodies, and ready to be presented to state legislatures. A 1 has been accepted in about 10 jurisdictions now, even though changes to proposed 1-301 were accepted in none and the definition of good faith only in some of the 10. But A 2 has sort of "hit the wall" and, to date, has not been adopted anywhere.

Now you see what many law professors call "the dilemma." What do you teach? More than a decade has gone into revising A 2. In addition, you have a closely allied article on "computer information transactions" now contained in its own uniform law (UCITA) that is no longer involved in "sales." And, you have the amendments to A 1 which have only been accepted in a large handful of states to date. Rather than seeing this as a dilemma, I think this is a gift, a sort of hidden blessing to students and teacher alike. Why? Because it gives us insight into the way experienced minds work as they try to frame a code that captures and describes the reality of sale of goods in our age. Rather than just learning a two-dimensional "code" which seemingly is a series of disembodied principles applied dispassionately by courts, we have the privilege of going from one version to the next of each article, isolating differences between the two, searching out why changes were made, getting into the heart of the debates that actuated those who worked on changes. We learn how difficult it is in our day to formulate a uniform law on something so vast as sales, and we see how the legal drafting process consists of dealing with stakeholders of varying degrees of influence. One of the reasons in retrospect that A 2 revision never got off the ground, according to Professor Speidel, the Reporter until 1999, is that there were very few advocates, apart from law professors, for reform. Industry, in general, fought reform tooth and nail. Well, I am getting into the particulars of the story now, which isn't the purpose of this essay. Rather, in the remaining words I want to illustrate how understanding the "flow" of the revisions can aid our understanding of law.

A Simple Change

Let's illustrate change through a very simple example. Old A 1 had a definition of "conspicuous." Since it appeared in A 1, it meant that its definition applied to all the articles of the code. The definition in "Old" A. 1 (1-201(10)) was:

"A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is 'conspicuous' if it is in larger or other contrasting type or color. But in a telegram any stated term is 'conspicuous.' Whether a term or clause is 'conspicuous' or not is for decision by the court.

The Comment on this definition is very brief. By the time you get to A 1 revision in 2001, however, you have this definition "cleaned up" as follows:

"'Conspicuous', with reference to a term, means so written, displayed, or presented that a reasonable person agaainst which it is to operate ought to have noticed it. Whether a term is 'conspicuous' or not is a decision for the court. Conspicuous terms include the following: .....[the discussion buttresses and cleans up the discussion in the pre-2001 version, and there is a longer comment].

The changes between the two A 1's were mostly cosmetic. But then you come to A 2. There was no definition of the term in the pre-revised A 2, which meant that the A 1 definition would control. By the time you get to 2003 and revised A 2, you have the following. In revised 2-103, a definitions and index of definitions section, you have at least 200 words defining the concept of "conspicuous" (2-103(1)(b)). What is at work here is the recognition of a technological change that has entered our lives not simply between 1989 and today, but arguably between 1998 (when the amendments to A 1 began) and today. Let's look at the first part and see the change.

"'Conspicuous', with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. A term in an electronic record intended to evoke a response by an electronic agent is conspicuous if it is presented in a form that would enable a reasonably configured electronic agent to take it into account or react to it without review of the record by an individual.....(new words in italics)

Then, in the new second subpart, we learn that conspicuous terms include:

"for a person or an electronic agent, a term that is so placed in a record or display that the person or electronic agent may not proceed without taking action with respct to the particular term" (2-103(1)(b)(ii)).

What is the "new reality" that A 2 seeks to incorporate? Of course, it is "e-commerce." The first passage seems to talk about the problem of "configuration" of computers. Something is conspicuous if it is so on my screen, and not simply in the program of the sender. Then, the second quotation seems to refer to the "I Accept" buttons that we all have clicked numerous times.

Conclusion

I guess I don't have space to illustrate other changes here. Suffice it to say that even this rather minor change provokes questions. What does the language specifically mean? Does the fact that e-commerce grew from nothing to a multi-year business before we had "law" on the issue mean that law basically plays a "catch up" function in our society? Why does A 1 only have a general definition and A 2 a specific one?

Before we leave this idea, I would also mention that a study of successive Code versions is helpful not only to mark changes that happen but sometimes to understand why certain changes did not happen. For example, there was a heated debate over removing the "basis of the bargain" language in 2-313 (on express warranties). Those who wanted to remove the language failed in their attempts. Therein hangs a tale, which I can't tell now. But the existence of two codes or revisions helps us focus on the thinking process that went into changes and which sometimes left the Articles intact.

1646