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Prof. Michael Rustad, Prof. Stephen Michael McJohn, Mr. TBA,
3 credits day; 3 credits evening. Professor McJohn: 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. Professor Rustad: It is taught through a problems approach. The course is a
comprehensive introduction to payments systems and the material is presented in separate, self-
contained assignments. Each assignment is designed to provide adequate material for one class.
Unlike many other law-school classes, this course emphasizes how the law interacts with
business. 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, trans fer 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.
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.
Elective Course
Meets Base Menu Requirement
Meets Financial Services Concentration Requirements
Recommended for the Mass Bar
Final Exam Required
Comparative Criminal Procedure