Freedom from Claims and Defenses: A Study in Judicial Activism under the Uniform Commerical Code

The suggestion that we might today learn something about the judicial process in such a staid area of private law may seem surprising. After all, has not the Federal Trade Commission repealed the holder in due course rule thus tossing negotiable instruments into the dust bin? Have not the remaining technical questions been answered by the detail and rigid precision of the Uniform Commercial Code so lamented by Professor Gilmore? Surely, the attentive observer of the role of the courts might conclude that there is nothing left for the judicial policy maker in the field of bills and notes. The thesis of this Article is that any such suppositions of passivity are wrong. The opinions written today show that, as in Judge Abbott\u27s or Justice Story\u27s time, the courts contend with significant commercial paper problems. Some of the issues they face might well give Chief Judge Abbott or Justice Story profound feelings of deja vu were they available to preside. The FTC preemption is easily disposed of--it is limited to certain consumer time obligations; not even consumer checks are affected. Nor have the courts been shackled by the UCC. The answers appellate courts give in commercial paper cases are frequently a product of judicial preferences rather than statutory directives. For better or worse, the contemporary opinions dealing with freedom from claims and defenses on negotiable instruments are remarkable for the judicial legislation they embody