Year: 1956
Type: article
Abstract: Article 8,G the issuer of a letter of credit under the provisions of Article 5,7 or a warehouseman or carrier governed by Article 7.9 But while solutions vary with institutional settings, they all deal with the same basic policy conflict.)Each of the Code's solutions to particular adverse claim problems thus represents a compromise between (1) the desire to maintain honesty in transactions involving commercial paper; (2) the policy of facilitating the use and negotiation of commercial paper: and (3) the need to avoid undue disruption of the flow of commercial transactions.In the adverse claim situation, these policies are invoked primarily by the claimant, the holder and the stakeholder, respectively.The claimant demands an opportunity to assert his equities against the holder; and, more than this, to assert his equities before the holder has dissipated the proceeds or the goods represented by the instrument.His claim is supported by the need to maintain honesty, an objective in both commercial and noncommercial transactions.However, only in the latter context is this goal untempered by competing demands.In the business context the need for honesty is no less urgent, but must be reconciled with the dictates of commercial expediency and ease of negotiability.'The holder, in demanding immediate payment, asserts the community's interest in facilitating the use of commercial paper.Supporting his claim is the well established premise that commercial transactions would be seriously impeded unless the law minimized the risks involved in the purchase and transfer of negotiable instruments.Those sections of the Code which set out the rights ownership.See, generally, Gilmore, The Commercial Doctrine of Good Faith Purchase, 63 YALE LJ. 1057 (1954).4. Article 3 replaces the UNIORM NEGOTIABLE INSTRUMENTS LAW (hereinafter cited as N.I.L.), which is now in force in every state except Pennsylvania.
Source: The Yale Law Journal
DOI: 10.2307/793907
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4231617687