Professor John Glover
Change in the world’s developed
Electronic communication and
computers replacing paper-based
Production of services, by value, is
eclipsing the value of goods
Effect on commercial law.
RMIT University Slide 2
The significance of title and ownership in
common law jurisdictions.
Reliable means of proving ownership is
an important feature of commercial law
How do you prove ownership of an
apartment, a car . . . or
RMIT University Slide 3
US Uniform Commercial Code (“UCC”)
and Uniform Electronic Transactions
Act 1999 –
Title = control of an electronic
document (including through agents).
A vague and indeterminate criterion?
RMIT University Slide 4
Can “control” of an electronic dealing
– a momentary sequence of
electrons – ever match the certainty
of documentary titles?
Do electronic transactions have any
hallmarks or distinguishing features?
Surely fraud in an “open” system will
RMIT University Slide 5
But the UCC electronic title protocol
will doubtless work effectively.
Many thousands of businesses now
rely on the new legal regime for
This is the realm of praxis – where
solutions have to work.
RMIT University Slide 6
Electronic commerce changes typified in
the UCC’s amended definition of “good
Requiring the “observance of reasonable
commercial standards of fair dealing”
in place or mere “honesty”.
More woolly words – or is the benchmark
for commercial interaction changing?
RMIT University Slide 7
More about electronic title systems:
Contrasting “closed” systems of
electronic title – where participating
members agree to play by the rules.
Systems of land title registration are
“going electronic” all over the
developed world – these are closed
RMIT University Slide 8
How the prevalence of “closed”
electronic title systems make the
UCC’s “open” system based in control
all the more remarkable.
But electronic money is different.
How “DigiCash” or “ECash” has not
become fully negotiable yet – like
notes and coins.
Legal doctrine is causing problems.
RMIT University Slide 9
What do these examples show?
• That the form of commercial
interaction is changing;
• Exchange is becoming more fluid;
• The system requires higher levels of
trust and reciprocity between
participants in order for it to work.
RMIT University Slide 10
Commercial law has adapted to the
new regime of production and
In structural terms:
standards and principles are taking
the place of rules and regulations in
common law commercial law
RMIT University Slide 11
“Mechanical jurisprudence” of rules is in
e.g., consider the size of the rule-book
needed for regulation of UCC
Rules could not cover all the
possibilities for fraud - requiring
“reasonableness and conduct-
evaluation are the only way that the
system could be policed.
RMIT University Slide 12
Ways of teaching commercial law and
argument in commercial courts has
Commercial lawyers reason
Legal outcomes are preferred
according as they advance or retard
RMIT University Slide 13
Changes in society and its commercial
law – accompanied by a moral
Is robust individualism dying?
Is there still a capitalist “right to be
Does the law increasingly require
people to make sacrifices and
RMIT University Slide 14
Legal norms have a more good-
The idea that justice inheres in
outcomes rather rules for action is
Max Weber wrote about the
phenomenon in the early 20th
RMIT University Slide 15
Weber believed that trusting was
increasingly required by modern
Weber said that regulation of
commerce had to be through
categories which expressed
meanings and intention – and not a
“mechanical jurisprudence” of rules.
RMIT University Slide 16
Vehicles for anti-formalism differ in
In the US, change in commercial law
led by statute.
In Britain, Australia etc caselaw has
been more significant.
RMIT University Slide 17
An example of US anti-formalism in
Article 242 of the UCC – the multi-
purpose “unconscionability” criterion
for disallowing commercial
The age of unrestrained self-interest
RMIT University Slide 18
How the commercial law in non-US
common law countries prohibits
aspects of transactions which are
e.g., estoppel doctrine require
commercial actors to be consistent and
not deceive others.
RMIT University Slide 19
e.g., the fiduciary relationship and
maintaining the social value of trust.
How this is even efficient –
well-ordered commercial systems
work better if clients trust attorneys,
suppliers can trust distributors etc
RMIT University Slide 20
Is this the “reclusive inner morality of
capitalism” – a “moral territory”
• commercial actors are regularly
acknowledged to be unequal.
• people regularly promise to act and
do business in the interests of
RMIT University Slide 21
RMIT University Slide 22