LAW-2589 Commercial Paper

Prof. Stephen Michael McJohn,

3 credits day; 3 credits evening.


This course provides extensive coverage of post-revision Articles 3, 4, and 4A of the Uniform Commercial Code. Coverage of related areas such as law of credit cards, electronic funds transfers, Federal Reserve Board Regulations CC and J, and Internet payment systems is provided through cases and problems. Electronic payment system including the UNCITRAL draft model law on electronic funds transfers will be explored.


Faculty comments: This course covers the law of payment systems: checks, notes, credit cards, debit cards, wire transfers, and letters of credit. In commercial transactions, sellers want to be paid and buyers are willing to pay – if they get what’s promised. The course addresses how lawyers structure transactions to allocate risks between the parties. The class combines discussion of the legal materials and problem analysis, with class slides that provide an outline of the material, with some images related to the cases and problems. Class participation is not graded. There is an exam, which may vary in format from year to year.

Student participation is expected and enabled by assignments each week. This course covers electronic-based as well as paper-based payments systems. Students are also given some basic background in UCC Article 9 in the ways it interacts with UCC Articles 3 and 4. Attention is given to topics covered on the Massachusetts and other state bar examinations in commercial paper.

There is a limited open book. Students may bring their UCC Codebook into the examination with annotations. The examination is half multiple choice and half-essay modeled after the bar examination. This course features several in class practice examinations during class. Papers are not collected but the answers discussed in class.

Students are given a bump of a half letter grade for extraordinary participation. The areas of particular focus are UCC Article 3 and 4 topics such as credit enhancement by guaranty, protection for guarantors, transfer and enforcement of negotiable instruments, holders in due course, special rules for checking losses, and very recent developments in Regulation CC and the federalization of commercial paper law by the Federal Reserve Board. I use extensive diagrams and study aids to help students master the subject. I also use frequent reviews to reinforce the subject.


pointer    Elective Course

pointer    Meets Base Menu Requirement

pointer    Meets Financial Services Concentration Requirements

pointer    Recommended for the Mass Bar

pointer    Final Exam Required


<<Course Updated: March 22, 2016>>