Llewellyn Has Left the Building: The Growing Irrelevance of the UCC to 21st Century Sales Law

Abstract

This paper highlights a growing gap between American sales law “in the books” and American sales law “in action” in global markets, including those that operate within the geographical boundaries of the United States. Decades of disruptive technological innovation and trade liberalization have lowered barriers to institutional innovation. The result is the migration of private enterprise out of contract law as a public framework of market organization organized by the nation state to private frameworks operating as platforms in global markets. “Platform” in this sense refers to multi-sided markets as described by the economist Jean Tirole. Professor Clayton Christensen described something similar when he recently commented on the need for more “market producing innovations” to address the current crisis of business underinvestment in advanced market economies. The idea of “opting out” of default rules provided by law is well developed in American commercial and contract law, but the idea of using contract law to opt out of the legal institutions of the nation state is less well developed. It is related to the notions of privatization, deregulation and outsourcing government functions in administrative law, and has been described by some commentators as “global legal pluralism” or “global lex mercatoria.” Examples include the process of opting out of national sales law generally and into private legal orders include the use of vendor managed inventory and iterated business forecasts in lieu of requirement and output quantity terms; using “master supply agreements” in lieu of the Battle of the Forms; using continuous improvement processes in lieu of warranties; and using technical standards and certification marks in lieu of usage of trade.