Merchant Law in a Merchant Court: Rethinking the Code's Search for Immanent Business Norms

Abstract

This chapter draws on a case study of merchant law in a merchant court to reexamine, and, ultimately, to challenge, the fundamental premise of the Uniform Commercial Code's adjudicative philosophy, the idea that courts should seek to discover “immanent business norms” and use them to decide cases. It challenges the idea that courts should seek to discover and apply immanent business norms in deciding cases. The merchant-court system developed by the NGFA provides an unusual opportunity to empirically explore and reevaluate the Code's search for immanent business norms in a context where the concerns of litigation costs and institutional competence that have been the focus of the limited debate about the Code's adjudicative approach are conspicuously absent. It has identified a number of undesirable effects on commercial relationships between merchants created by the Code's search for immanent business norms.