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Payment Systems

Prof. Jason Kilborn

Spring 2009 Syllabus

I.          Course Summary, Class Structure, and Course Goals

            This course will generally introduce you to the mechanisms by which actors in commercial transactions (business deals) make payments (e.g., by cash, check, credit/debit card, wire transfer, etc.).  In this course, we will learn how these payment transactions occur (i.e., what pieces of “commercial paper” are traded among the parties and how) and how state and federal law governs the rights and obligations of the parties to a payment transaction.  We will spend a good deal of time on the checking system, including the rules governing how banks processes checks, but we will also discuss other important systems, such as credit and debit cards, electronic payments and wire transfers, letters of credit, and even investment securities holdings (don't worry--you'll know what all of this is by the end of the course!). 

            The state law governing this area is found primarily in Articles 3, 4, 4A, and 5 of the Uniform Commercial Code (“UCC”)—as enacted by the legislatures of Illinois and every other state—and one of our main goals in this course will be to guide you in locating and interpreting various provisions of the UCC.

            In making our way through the coursebook, we will spend most of our time working through problems to see how these rules apply to fact scenarios that you might encounter in practice or in your private life.  The cases in the book are for illustration only--I will generally NOT discuss them or ask you to discuss them in class.  To maximize the potential for productive classroom discussion, I will try to limit the length of assignments, and you should be thoroughly prepared to work the problems.  I suggest that, the first time the coursebook calls for reference to a section of the UCC or other law, you read the section carefully and at least skim the official comments in the UCC.  These comments, while not “law” per se, are often helpful to an understanding of the provision of law, and courts often rely on them in interpreting difficult or ambiguous sections of the UCC.  If, for whatever reason, you feel as though you are not able to participate effectively in class discussion, please let me know (with a note or quick comment) before class.  You may excuse yourself from class discussion as often as necessary, but keep in mind 1) I will focus on those who have opted out of the previous class discussion in the next class meeting, and 2) your grade for this class may be affected by your performance in class discussion (see below in “Evaluation”).

 II.  Required Materials

1)  Mann, Payment Systems and Other Financial Transactions (4th ed., Aspen Law & Business 2008), ISBN 978-0-7355-7647-6.

2)  The official text and comments of the Uniform Commercial Code, as well as the Consumer Credit Protection Act and Federal Reserve Board Regulations CC, E, J, and Z (I have ordered for the bookstore one particularly good statutory supplement that contains all of these materials, Comprehensive Commercial Law Statutory Supplement (Ronald J. Mann, Elizabeth Warren, Jay Lawrence Westbrook eds., Aspen Law & Business 2008), ISBN: 978-0-7355-7208-9, but virtually any similar recent UCC supplement will do).

III.  Evaluation

            You will be evaluated based on a combination of quality of class participation and a final examination.  As mentioned above, class participation is especially important in this course, and I reserve the right to adjust your final grade up or down by a + or - based on the quality (not necessarily quantity) of your contribution.  You do not necessarily have to announce the correct answer immediately to receive an upward adjustment--concerted and reasoned efforts to grasp the materials, and especially voluntary and well-reasoned responses to questions posed in class, may lead to an upward adjustment.  Extreme absenteeism, frequent requests to be excused from class discussion, and failure to be prepared for the next class after being excused from class discussion, will provide the basis for a downward adjustment.

            The bulk of your final grade will be based on a final examination.  The exam will most likely consist of a series of multiple choice questions generally of the type discussed in class.  You may bring with you and refer to during the exam anything that is neither alive nor disturbing to other students.

IV.  Assignments