March 21-23, 2025
JW MARRIOTT DESERT SPRINGS
Palm Desert
The Outer Fringes of Commercial Law: Suretyship, Choice of Law Issues, Uneven Adoption of the 2022 Article 9 Amendments, and the
New World of Electronic Promissory Notes
The Financial Lawyers Conference is pleased to announce that the 2025 Seminar will be led by Professor Neil Cohen, Distinguished Research Professor of Law at Brooklyn Law School. Professor Cohen currently serves as the Director of Research of the Permanent Editorial Board for the Uniform Commercial Code. In addition, he has been a member of several drafting committees for revising various articles of the Uniform Commercial Code, including the three most recent revisions of Article 9, and has served as an adviser for several projects of the American Law Institute, including Principles of Software Contracts and the Restatement of the Law of Conflict of Laws. He was the Reporter for Revised Article 1 of the Uniform Commercial Code and for the American Law Institute's Restatement of the Law of Suretyship and Guaranty as well as the recent ALI-ELI Principles of the Law for a Data Economy.
The Uniform Commercial Code (UCC) has been enacted in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Since its widespread enactment in the 1960s, the UCC has been periodically revised to address changes in commercial practices.
The 2025 Seminar will address four important topics on the “outer fringes” of commercial law that a financial lawyer should understand: suretyship and guaranty law, choice-of-law issues in interstate and international transactions, problems resulting from the uneven enactment of the 2022 amendments to the Uniform Commercial Code, and the new world of electronic promissory notes.
- Suretyship and guaranty law. Extensions of credit—whether secured or unsecured—are frequently backed up by guarantees or suretyship arrangements. The law governing these arrangements, which is largely outside the Uniform Commercial Code, and the effect of events occurring after the extension of credit on the rights of the creditor are exceeding complex. Moreover, it is not always obvious what types of arrangements trigger the application of suretyship and guaranty law, with the result that creditors may find themselves without a claim (or with a reduced claim) against a party on whose creditworthiness they were relying. This portion of the Seminar will address the range of transactions to which suretyship and guaranty law applies, the effect of post-closing events on the rights of the parties, and how creditors can protect themselves from inadvertently reducing or eliminating important rights.
- Choice of law. A very high proportion of financial transactions touch more than one state, and an increasing number of such transactions have connections to other nations as well. Moreover, even though we tend to think that the law governing financial transactions does not vary significantly from state to state, in fact the law from state to state can differ in outcome-determinative ways, both because of non-uniformities of the “Uniform” Commercial Code and variation as to doctrines outside the Code. Furthermore, it is possible that a rule of law in one state will be viewed as contravening a fundamental policy of another state. As a result, determinations as to which state or nation’s law will govern various aspects of a financial transaction are critical, and the ability to ascertain or control in advance which state or nation’s law will govern those aspects may be essential for risk reduction. This portion of the Seminar will address determinations of applicable law, both within the Uniform Commercial Code and outside of it, and the extent to which parties can control which law will be applicable.
- The uneven enactment of the 2022 amendments to the Uniform Commercial Code. As of November 17, the 2022 amendments to the Uniform Commercial Code, adding a new Article 12, significantly amending Article 9, and making important changes to several other Articles, have been enacted by 24 states and the District of Columbia. As a result, important packages of rights may be characterized differently in different states, and the transition rules built into the amendments may work in surprising ways. This portion of the Seminar will address the maze of issues created by this non-uniformity in the Uniform Commercial Code and discuss strategies to minimize risk.
- The new world of electronic promissory notes. Debt obligations are frequently evidenced by promissory notes, both negotiable and non-negotiable. Historically, a key element of those promissory notes, and a prerequisite to the application of the rules governing them, was the existence of a writing. Yet, as was seen during the mortgage crisis that followed the financial meltdown that began in 2007, storing those writings, locating them when needed, transferring possession of them when appropriate, obtaining indorsements, etc., has become increasingly difficult. Law reforms (including the Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act, and the 2022 amendments to the Uniform Commercial Code) have brought about significant reform in this area that can facilitate the use of electronic equivalents of promissory notes. Because New York law differs in an important respect from the law of other states, however, there are still traps for the unwary. This portion of the Seminar will provide analysis and guidance about the use electronic equivalents of promissory notes.
A few weeks before the seminar, FLC will email attendees written course materials, including discussion questions and problems that will form the basis for the seminar discussions, as well as assigning each attendee to a specific issue. Because the seminar materials will be distributed via email, please be sure to provide your email address on your seminar application.
The weekend will include approximately eleven hours of roundtable discussion, which has been approved for Minimum Continuing Legal Education credit by the State Bar of California.
