COMMERCE DEPARTMENT The DEPARTMENT OF COMMERCE DOC is an agency of the EXECUTIVE BRANCH of the federal government that promotes international trade, economic growth, and technological ad
Trang 1broadcasting involving intrastate activity may be subject to local taxation
A state may impose a nondiscriminatory tax for the use of its highways by motor vehicles
in interstate commerce if the charge bears a fair relation to the cost of the construction, maintenance, and regulation of its highways
The commerce clause does not prohibit a state from imposing a tax on a natural resource that is produced within its borders and that is sold primarily to residents of other states In Commonwealth Edison Co v Montana, 453 U.S
609, 101 S Ct 2946, 69 L Ed 2d 884 (1981), the U.S Supreme Court upheld a 30 percent
SEVERANCE tax levied by Montana on the production of coal, the bulk of which was exported for sale to other states The amount of the tax was challenged as an unconstitutional burden on interstate commerce The Court reasoned that the commerce clause does not give the residents of one state the right to obtain resources from another state at what they consider a reasonable price, for that right would enable one state to control the development and depletion of natural resources in another state
If that right were recognized, state and federal courts would be forced to formulate and to apply a test for determining what is a reasonable rate of taxation on legitimate subjects of taxation, tasks that rightfully belong to the legislature
In 2005 the Supreme Court reviewed the imposition of a motor vehicle fee by the State of Michigan Under the Michigan law, motor carriers were required to pay a flat fee of $100 for a permit to transport property within the state This fee applied both to motor carriers that limit their operations in the state and to those that engaged in both interstate and intrastate operations The fee did not depend upon the number of miles traveled within the state, the number of trips taken within the state,
or the portion of the time that a carrier spent traveling between states or within states other than Michigan The MCA requires payment
of other fees as well The statute requires all carriers that are registered in Michigan and that operate exclusively in interstate commerce to pay a $100 fee Additionally, all motor carriers that are registered outside the state must pay
a registration fee of $10
In an opinion by Justice STEPHEN G BREYER, the majority concluded that nothing in the
Michigan statute offended the commerce clause because the fee only affected activities taking place within the borders of the state of Michigan Moreover, the Court rejected arguments that the state imposed the fee in a manner that burdened interstate commerce (American Truck-ing Ass’ns v Michigan Public Serv Commission,
545 U.S 429, 125 S Ct 2419, 162 L Ed 2d 407 [2005])
In a 2008 decision the Court ruled that the commonwealth of Kentucky could exempt its residents from paying tax on the interest
of municipal BONDS issued by the common-wealth and its cities, counties, and other political subdivisions, while taxing them for interest on municipal bonds issued by other states (Department of Revenue of Kentucky v Davis, _ U.S _, 128 S Ct 1801, 170 L
Ed 2d 685[2008]) The Court determined that this long-standing practice was justified in ways that did not implicate the commerce clause
Crimes Involving Commerce
Congress may punish any conduct that inter-feres with, obstructs, or prevents interstate and foreign commerce, whether it occurs within one state or involves a number of states The MANN ACT, which outlaws the transportation of any woman or girl in interstate or foreign commerce for the purpose ofPROSTITUTION, debauchery, or other immoral acts, is a constitutional exercise
of the power of Congress to regulate commerce (18 U.S.C.A §§ 2421-2424 [1910]) The COUN-TERFEITING of notes of foreign corporations and bills of lading is a crime against interstate commerce Under federal statutes, the knowing use of aCOMMON CARRIERfor the transportation
of OBSCENE matter in interstate or foreign commerce for the purpose of its sale or distribution is illegal This prohibition applies
to the importation of obscene matter even though it is for the importer’s private, personal use and possession and not for commercial purposes
The Anti-Racketeering Act (18 U.S.C.A
§ 1951 [2000]) makes RACKETEERING by ROBBERY
or personal violence that interferes with inter-state commerce a federal offense The provi-sions of the CONSUMER CREDIT PROTECTION ACT
(15 U.S.C.A § 1601 et seq.[2000]) prohibiting
EXTORTION have been upheld, as extortion is deemed to impose an undue burden on
Trang 2interstate commerce Anyone who transports
stolen goods of the value of $5,000 or more in
interstate or foreign commerce is subject to
criminal prosecution pursuant to the National
Stolen Property Act (18 U.S.C.A § 2311 et seq
[2000])
FURTHER READINGS
Cauthorn, Kim 1995 “Supreme Court Interprets Scope of
Congressional Authority under Interstate Commerce
Clause ” Houston Lawyer 33-AUG (July-August).
Conant, Michael 2008 The Constitution and Economic
Regulation: Objective Theory and Critical Commentary.
New Brunswick, N.J.: Transaction.
McJohn, Stephen M 1995 “The Impact of United States v.
Lopez: The New Hybrid Commerce Clause.” Duquesne
Law Review 34.
Prentice, E Parmalee, and John G Egan The Commerce
Clause of the Federal Constitution Littleton, Colo.: F B.
Rothman.
Ramaswamy, M 1948 The Commerce Clause in the
Con-stitution of the United States New York: Longmans,
Green.
Weaver, Russell L 2009 Inside Constitutional Law: What
Matters and Why New York: Aspen.
CROSS REFERENCES
Civil Rights; Federalism; Interstate Commerce Commission;
Preemption; States’ Rights; Telecommunications.
COMMERCE DEPARTMENT
The DEPARTMENT OF COMMERCE (DOC) is an
agency of the EXECUTIVE BRANCH of the federal
government that promotes international trade,
economic growth, and technological
advance-ment It performs many activities related to
business, trade, and technology Its numerous
divisions work to foster business growth and to
create jobs; to prevent UNFAIR COMPETITION in
foreign trade; to distribute economic statistics
and studies for use by businesses, the
govern-ment, and the general public; to support and
conduct scientific, engineering, and
technologi-cal research and development; and to promote
foreign trade and U.S exports As part of its
broad mission, the DOC administers the
Bureau of the CENSUS, the Bureau of Economic
Analysis, the National Oceanic and
Atmospher-ic Administration, the National Weather
Service, the U.S PATENT AND TRADEMARK OFFICE,
the National Institute of Standards and
Technology, and several other major
govern-ment agencies or bureaus (As of 2009, twelve
were under the purview of the Commerce
Department.)
Originally part of the Department of Com-merce and Labor, which was created in 1903, the Department of Commerce was established
as a separate entity by law on March 4, 1913 (U.S.C.A § 1501) The secretary of commerce sits on the president’s cabinet along with the secretaries of the 13 other executive agencies
of the federal government and other selected executive officials
Although the activities of the Department
of Commerce are not always prominent in the American consciousness, the department’s efforts in administering economic programs have a major effect on the average citizen
Under the administration of President GEORGE
H.W.BUSH, the Department of Commerce admi-nistered a number of programs designed to enhance economic growth and to stimulate economic progress in the wake of a recession
Economics and Statistics Administration
The Economics and Statistics Administration (ESA), supervised by the undersecretary for economic affairs, advises the president on economic developments and macroeconomic and microeconomic policy It also makes economic forecasts and presents current eco-nomic data to the public through the National Trade Data Bank and the Economic Bulletin Board The office oversees the Bureau of the Census and the Bureau of Economic Analysis
The Bureau of the Census was officially established as a permanent office on March 6,
1902 (32 Stat 51), although the ESA remains its parent agency Its major duties are authorized
by the Constitution (which requires that a census of the U.S population be conducted every ten years) and by laws codified in Title 13
of the U.S CODE By law, the census data collected from individuals must be kept confi-dential However, statistics collected from the data are published for use by Congress, the executive branch, and the general public
The Bureau of the Census collects data on housing, agriculture, state and local govern-ments, business, industry, and international trade The bureau also publishes projections
of future population trends For a fee, the bureau will search records and furnish certifi-cates to individuals who require evidence of age, relationship, or place of birth The headquarters of the bureau is located in
COMMERCE DEPARTMENT 9
Trang 3Suitland, Maryland, and the bureau operates 12 regional offices
The Bureau of Economic Analysis, formerly the Office of Business Economics, was estab-lished on December 1, 1953, and also falls under the ESA The bureau prepares and interprets statistics on the gross domestic product (GDP), personal income, foreign trade, and many other national accounts
relating to commerce It makes statistics available through numerous media and pub-lications, including the monthly Survey of Current Business
Bureau of Industry and Security
The Bureau of Industry and Security, with its offices of Export Administration and of Export Enforcement, directs the nation’s export control
Department of Commerce
Secretary
Deputy Secretary
Chief of Staff
Chief Economist
Under Secretary
and Administrator Under Secretary for
International Trade International Trade Administration
Under Secretary for Industry and Security Bureau of Industry and Security
Under Secretary for Economic Affairs Economics and Statistics Administration
Director National Institute of Standards and Technology
Under Secretary for Intellectual Property and Director
Assistant
Secretary for
Oceans and
Atmosphere
and Deputy
Administrator
Assistant Secretary for
Trade Promotion
and DG of the
U.S Foreign &
Commercial
Services
Assistant Secretary for
Market Access and
Compliance
Assistant Secretary for Import Administration
Assistant Secretary for Export Administration
Assistant Secretary for Export Enforcement
National Director Minority Business Development Agency
Assistant Secretary for Manufacturing and Services
Assistant Secretary for Economic Development Economic Development Administration
Assistant Secretary for Communications and Information National Telecommunications and Information Administration
Director National Technical Information Service
Director Bureau of the Census
Director Bureau of Economic Analysis
General Counsel
Inspector General
Chief Financial Officer and Assistant Secretary for Administration Assistant Secretary for Legislative and Intergovernmental Affairs Chief Information Officer
Office of Public Affairs
Office of Business Liaison
Executive Secretariat
Office of Policy and Strategic Planning
Office of White House Liasion
United States Patent and Trademark Office
National Oceanic and
Atmospheric
Administration
ILLUSTRATION BY GGS
CREATIVE RESOURCES.
REPRODUCED BY
PERMISSION OF GALE,
A PART OF CENGAGE
LEARNING.
Trang 4policy, including the processing of export
license and applications as well as treaty
compliance It assesses whether export controls
should be imposed upon specific products,
with particular regard for the potential danger
to U.S national security that may result if the
products are exported This office works with
U.S allies to advocate for better ways of
controlling strategic exports Export
Enforce-ment investigates violations of export-control
laws, including possible diversions of exports to
countries that are forbidden to receive
particu-lar products
Economic Development Administration
The Economic Development Administration,
established in 1965, works to generate economic
and job growth in the United States, including
developing the economies of distressed areas
and/or local communities experiencing high
unemployment; low income levels; or sudden,
severe economic hardship It funds
public-works projects for public, private nonprofit,
and American Indian groups, including
indus-trial parks, roads, water and sewer lines, and
airports It also provides technical assistance
and grants in order to promote business
development
International Trade Administration
Created in 1980, the International Trade
Admi-nistration (ITA) works to improve the
interna-tional trade position of the United States by
striving to strengthen the competitiveness of
American industries and workers The ITA
oversees nonagricultural trade operations of
the U.S government and supports the efforts
of theOFFICE OF THE U.S.TRADE REPRESENTATIVE It
includes the offices of International Economic
Policy, Import Administration, and Trade
Development, and the U.S and Foreign
Com-mercial Service The last agency produces and
markets services and products to promote U.S
exports, including seminars and conferences on
international trade
Minority Business Development Agency
Formerly the Office of Minority Business
Enterprise, the Minority Business Development
Agency was established in 1979 It helps to
develop minority-owned businesses The agency
operates a network of six regional offices and
four district offices that provide technical
and managerial assistance to business owners and entrepreneurs
National Oceanic and Atmospheric Administration
The National Oceanic and Atmospheric Ad-ministration (NOAA) was formed in 1970 It is authorized to explore and to map the global ocean and its living resources; to analyze and predict conditions of the atmosphere, ocean, sun, and space; to monitor and issue warnings regarding destructive natural events such as hurricanes, tsunamis, and tornadoes; and to assess the changing condition of the environ-ment Included in this wide mandate are such activities as protection of marine species;
preparation of nautical and aeronautical charts and geodetic surveys; prediction of ocean tides and currents; satellite observation of the atmo-sphere and oceans; and management of ocean coastal zones Offices of the NOAA include the National Weather Service; the National Marine Fisheries Service; the National Environmental Satellite, Data, and Information Service; the National Ocean Service; and the Office of Oceanic and Atmospheric Research
National Telecommunications and Information Administration
The National Telecommunications and Infor-mation Administration (NTIA) was formed in
1978 It is responsible for advising the president
on telecommunications policy; developing and presenting national plans at international com-munications conferences; managing federal use
of the radio frequency spectrum; and adminis-tering the National Endowment for Children’s Educational Television Offices of the NTIA include the Public Telecommunication Facilities Program, which provides grants to extend delivery of public telecommunications services
to as many citizens as possible, and the Institute for Telecommunication Sciences, which oper-ates a research and engineering laboratory in Boulder, Colorado
Patent and Trademark Office
The U.S PATENTand Trademark Office (PTO) awards patents, which give inventors exclusive rights to their inventions, and registers TRADE-MARKS, which provide businesses and organiza-tions with rights to symbols and other features that distinguish their products or services The PTO issues three types of patents: design
COMMERCE DEPARTMENT 11
Trang 5patents, plant patents, and utility patents.
A patent is valid for 20 years from the date when the application was filed The PTO also participates in LEGAL PROCEEDINGS involving patents or trademarks; advocates for strength-ening INTELLECTUAL PROPERTY protection world-wide; and maintains a roster of qualified patent agents and attorneys
National Technical Information Service
The National Technical Information Service helps businesses to develop technology that will increase their competitiveness in the marketplace It identifies and attempts to remove governmental barriers to the commer-cialization of U.S science and technology; helps
to identify priority technologies; monitors foreign competitors’ progress in technology;
advises the president on issues concerning commercial technology and related policy; and promotes joint efforts among business, govern-ment, educational institutions, and nonprofit organizations
It also collects and distributes scientific and technical information generated by the U.S government and foreign sources Its collection comprises over two million works
The NTIS Bibliographic Database is available
on CD-ROM or online through commercial vendors The Technology Administration produces the Federal Research in Progress Database, a summary listing of 140,000 federally funded research projects in progress The NTIS also licenses government-owned inventions, operates the FedWorld computer system, and makes available a major Japanese online infor-mation system The NTIS is a self-supporting agency, collecting its revenues through sales
of its research products The office also manages the National Medal of Technology Program, the president’s highest technology award
National Institute of Standards and Technology
The National Institute of Standards and Tech-nology (NIST) was founded in 1901 as the National Bureau of Standards and was renamed
in 1988 In addition to its traditional role as developer and protector of national standards of measurement, the institute has increasingly been called upon to help industry to use technology to improve product quality and reliability, improve manufacturing processes,
and more rapidly bring to market products that use new scientific discoveries The NIST administers the Malcolm Baldrige National Quality Award, first established in 1987, which recognizes outstanding quality achievement in business The institute operates a world-class center in Boulder, Colorado, for science and engineering research, including research in the fields of chemistry, physics, electronics, materials science, computing, and mathematics Its headquarters is located in Gaithersburg, Maryland
U.S Travel and Tourism Administration
Established in 1981, the U.S Travel and Tourism Administration formulates and imple-ments national policy relating to travel and tourism It develops trade and statistical re-search programs to assist the tourism industry, and aids small- and medium-sized travel and tourist businesses It operates regional offices in Amsterdam, Frankfurt, London, Mexico City, Milan, Paris, Sydney, Tokyo, and Toronto, as well as a Miami office that services South American markets
Web site: http://www.commerce.gov/ FURTHER READINGS
Commerce Department 2008 “Commerce Department FY
2009 Budget Highlights the President ’s Priorities and Commitments ” White House Office of Public Affairs Available online at http://www.commerce.gov/ssLINK/ PROD01_005145; website home page: http://www commerce.gov/ (accessed August 5, 2009)
U.S Government Manual Website Available online at www gpoaccess.gov/gmanual (accessed March 5, 2010) United States Department of Commerce 2008 Department
of Commerce: Condensed History, Duties, and Practical Operation Charleston, SC: BiblioBazaar.
COMMERCE, ELECTRONIC Electronic commerce includes any sales trans-action that takes place via computer or over the Internet
In 1990 nobody would have predicted that
by the end of the twentieth century people could conduct nearly all of their commercial transactions electronically In the early twenty-first century, a person with anINTERNET connec-tion can purchase anything from clothing to books to jewelry to stereo equipment online It
is possible to purchase insurance, pay one’s telephone bill, and buy groceries over the Internet Banking transactions such as transfers
Trang 6from one account to another can be
accom-plished online quickly and efficiently Although
most commerce is still conducted in person,
more than one-third of adults in the United
States made at least one purchase online in
2002
ELECTRONIC COMMERCE (or e-commerce) has
its origins in the 1960s, with the introduction of
a computerized check-processing system called
the Electronic Recording Machine—Accounting
(ERMA) Banks used ERMA to process billions
of checks each year, making it possible for nine
employees to do the work of 50 During the
1970s, companies began using Electronic Data
Interchange (EDI) to process purchase orders,
invoices, and shipping notifications Although
EDI could save time and money, it was an
expensive and somewhat cumbersome system,
and small to mid-size businesses could not
afford it
The introduction of the Internet in the mid
1990s opened electronic processing to
compa-nies of all sizes; anyone with a computer could
connect to a global system that reached into
countless businesses and homes
The first major so-called virtual company to
appear on the Internet was Amazon.com,
founded by Jeff Bezos in Seattle Amazon.com
began DOING BUSINESS in July 1995 Its premise
was simple: People could purchase books online
through Amazon.com for less money than the
same books would cost at a local bookstore
Because Amazon.com had no actual retail stores
(the books were stored in a warehouse), it could
afford to keep prices lower than the
competi-tion If Amazon.com had a buyer’s order in
stock in its warehouse, it could be delivered
within two to three days In some bookstores, a
special order for an out-of-stock book could
take weeks Amazon.com has since expanded
and currently offers a wide variety of products
in addition to books.)
Not long afterward, in September 1995,
Pierre Omidyar and Jeff Skoll founded eBay, an
online auction service Basically, eBay allows
sellers and potential buyers to deal online; as
with a live auction, various buyers bid for an
item, and the seller accepts the highest bid
In the ensuing years, Amazon.com, eBay,
and similar virtual companies cropped up on
the Internet Established brick-and-mortar
companies also established an Internet
pres-ence In the early 2000s, the average person can
find the local lawyer, doctor, dry cleaner, and baker on the Internet along with companies such as Amazon.com and eBay Not every company offers online retail services; in truth, many smaller companies merely have one or two web pages on their site with a telephone number and a link to an E-MAIL address For some companies, the Internet has proven to be
a double-edged sword On the one hand, a growing number of consumers expect that the businesses they deal with will have a web site
Even many self-employed individuals have web sites for precisely this reason On the other hand, a web site that has nothing of substance to offer will simply drive potential customers away
Why do people shop online? One compel-ling advantage is convenience The idea of being able to sit in front of one’s computer, look at different objects, compare prices, enter some data, press a button, and wait for a package to arrive two or three days later is attractive to
a
Amounts are from 2006 due to a lack of sufficient data in 2007.
E-Commerce Revenue, by Select Service Industries, 2007
Revenue estimates (in millions of dollars)
Publishing
Telecommunications a
Online information services a
Travel arrangement and reservation services Motor vehicles and parts dealers Electronics and appliance stores Clothing and clothing accessory stores Sporting goods, hobby, book, and music stores Electronic shopping and mail order houses
$18,581
$4,435
$4,637
$7,308
$23,600
$1,301
$2,115
$1,686
$88,915
SOURCE: U.S Census Bureau, E-Stats, “Measuring the Electric Economy,”
available online at http://www.census.gov/econ/estats/index.html (accessed August 14, 2009).
0 20,000 40,000 60,000 80,000 100,000
ILLUSTRATION BY GGS CREATIVE RESOURCES REPRODUCED BY PERMISSION OF GALE,
A PART OF CENGAGE LEARNING.
COMMERCE, ELECTRONIC 13
Trang 7many people, especially if they do not live close
to major retail stores (A person on the East Coast can make an online purchase from a West Coast store.) Speed is another factor Most e-commerce retailers offer two- or three-day delivery (or next-day service for an additional fee) An online bookstore might be able to ship
a hard-to-find book to the buyer in less time—
and possibly for less money—than a small neighborhood bookstore that tries to track the book down
In 2008, according to the eighth annual UCLA Internet Report (released February 2009), 65 percent of Internet users buy online;
69 percent of Internet users who buy online said that online purchasing has reduced their buying in traditional retail stores somewhat or
a lot
Thanks to improved technology that allows information to be encrypted when it is sent from one computer to another, it is extremely difficult for an unauthorized person to obtain a consumer’s credit card number or SOCIAL SECURITY number (Proponents of e-commerce argue that it is no more dangerous to send one’s credit card number over the Internet than it is
to have it on a receipt that can be read by countless people.)
As for missing out on the experience of actually seeing and touching an object before purchasing it, many web sites now have detailed information as well as photographs of the merchandise being offered for sale Even retailers that do not offer electronic purchases can do this Lenscrafters, the large optical chain that is famous for its one-hour glasses service, clearly cannot sell its wares over the Internet
The Lenscrafters web site has pictures of many
of its frames, as well as a guide to help visitors determine their facial shape and which frame would look best on them (According to the
2003 UCLA study, many Internet shoppers browse through their local retail stores to examine a product, and after that they look
on the computer to see whether they can order
it for less online.)
A major breakthrough in safe electronic transactions came with the passage of the Electronic Signatures in Global and National Commerce Act The statute, which was signed into law by President BILL CLINTON on June 30,
2000, is better known as the E-Sign Act It removes one of the most stubborn barriers to
e-commerce by making it safe for people to transmit personal information over their computer
The E-Sign Act authorizes legal recognition
of electronic (digital) signatures, contracts, and records It also provides a uniform framework for all of the states to follow A number of states had enacted their own laws, which made interstate electronic commerce cumbersome at best E-Sign can be quite useful for people who need to sign something by a deadline A person who wishes to purchaseHEALTH INSURANCEonline, for example, can do so over the computer instead
of having to fill out a form and mail it in and risk being presented with a rate increase that went into effect before the paperwork was received With an electronic SIGNATURE, the transaction is completed on the spot
In June 1998 the U.S DEPARTMENT OF COMMERCE issued a white paper that called for the creation of a not-for-profit corporation to help manage the Internet’s infrastructure This corporation became known as the Internet Corporation for Assigned Names and Numbers (ICANN) The best known function of ICANN
is its coordination of theDOMAIN Name Service (DNS) In other words, ICANN is responsible for overseeing the technology that allows Internet users to type in domain names (i.e., www.domainname.com) instead of long strings
of numbers This technology makes it easier for users to type in names of retail stores or online commerce sites ICANN also oversees the Uniform Domain-Name Dispute Resolution Policy (URDP) This policy governs the meth-ods by which corporate entities can choose and protect their domain names All URDP cases are arbitrated through the World INTELLECTUAL PROPERTYOrganization (WIPO), a group created
in 1970 to safeguard intellectual property rights Companies whose names are trademarked or who are well-known organizations are some-times forced to contend with individuals who try to use a similar domain name This practice
is known as cybersquatting One example of a company that was the victim of cybersquatting
is ABC Carpet Company, an established New York City-based retailer of rugs and other home accessories In 1998, ABC registered the name
“ABC Carpet & Home” (which it had begun using in 1995) with the U.S PATENT AND TRADEMARK OFFICE Two separate individuals tried
to use domain names with “ABC Carpet & Home” in them, and in both cases, WIPO
Trang 8ordered that ownership of the domain names in
question be transferred to the New York
company (ABC Carpet Co v Helen Gladstone
(WIPO Case No D2001-0521); ABC Carpet
Co v Tom Boltz and abccarpetandhome.com
(WIPO Case No D2001-0531)
One e-commerce question that has
gene-rated interest is whether states should be able to
tax sales conducted over the Internet
Techni-cally, Internet transactions are taxable, but a
1992 ruling by the U.S Supreme Court held
that states could only require sellers to collect
taxes if they have a physical presence in the
same state as the consumer In 1998 Congress
imposed a three-year moratorium against any
Internet taxes, which was renewed for two
years in 2001 Despite efforts by the National
Governors Association (NGA) to have Congress
repeal the physical presence requirement, by
2009 no legislation had passed Congress The
NGA first introduced the Streamlined SALES
TAXProject (SSTP) in 2000 to adopt uniform tax
rates among the 50 states By 2009, 23 states had
signed on, awaiting congressional approval
FURTHER READINGS
Kharif, Olga 2009 “The State of the Internet Sales Tax.”
Business Week, April 20.
Secretariat on Electronic Commerce 1997 The Emerging
Digital Economy Washington, D.C.: U.S Department
of Commerce.
UCLA Center for Communication Policy 2009 The 2009
UCLA Internet Report: Surveying the Digital Future Los
Angeles: UCLA.
CROSS REFERENCES
Justice Department; Internet; Taxation;
Telecommuni-cations
COMMERCIAL CODE
A colloquial designation for the body of law
known as the Uniform Commercial Code (UCC),
which governs the various business transactions
that are integral parts of the U.S system of
commerce The UCC has been adopted in virtually
all of the states
COMMERCIAL LAW
A broad concept that describes the substantive
law that governs transactions between business
entities, with the exception of maritime
transpor-tation of goods (regulated by admiralty and
maritime law) Commercial law includes all
aspects of business, including advertising and marketing, collections and bankruptcy, banking, contracts, negotiable instruments, secured transac-tions, and trade in general It covers both domestic and foreign trade; it also regulates trade between states
The term commercial law describes a wide body of laws that govern business transactions
The UNIFORM COMMERCIAL CODE (UCC), which has been adopted in part by every state in the United States, is the PRIMARY AUTHORITY that governs commercial transactions The UCC is divided into nine articles, covering a broad spectrum of issues that arise in commercial transactions These articles govern the follow-ing: sales of goods, leases of goods, negotiable instruments, bank deposit, fund transfers, letters of credit, bulk sales, warehouse receipts, bills of lading, investmentSECURITIES, andSECURED TRANSACTIONS
A number of other laws also govern business transactions For instance, although Article 4 of the UCC governs bank deposits, federal law in the form of statutes and regulations prescribe requirements for BANKS AND BANKINGin general
Likewise, federal law governs such issues related
to commercial law as BANKRUPTCY and debt collection Many of the federal laws related to commercial transactions are codified in title 15
of theU.S.CODE Although the UCC controls most aspects of domestic commercial law, the COMMON LAW of contracts, as well as other state laws, still applies
to some types of transactions that arise in business, such as contracts for services. INTERNA-TIONAL LAWis likewise an important component
of this area For instance, the UNITED NATIONS
Convention on Contracts for the International Sale of Goods has been ratified by approxi-mately 62 nations, representing two-thirds of the world’s trade
Though the business world undergoes constant change, commercial laws generally have remained static The COMMISSIONERS ON UNIFORM LAWS, in conjunction with the Ameri-can Law Institute and other organizations, periodically revises the articles of the UCC
However, the revision process of the UCC
is typically slow and deliberate Recent revi-sions to Article 2 (governing the sale of goods) and Article 9 (governing secured transactions) took several years to complete Thus, not only is commercial law substantially uniform
COMMERCIAL LAW 15
Trang 9throughout the United States, but also those who conduct business can proceed with com-mercial transactions with some degree of certainty as to the law that governs those transactions
CROSS REFERENCES Banks and Banking; Check; Contracts; Mercantile; Mer-chantable; North American Free Trade Agreement; Prom-issory Note; Sales Law; Uniform Commercial Code;
Warranty.
COMMERCIAL LAW LEAGUE
OF AMERICA The COMMERCIAL LAW LEAGUE OF AMERICA(CLLA) was founded in 1895 to elevate standards and improve the practice of COMMERCIAL LAW, to encourage an honorable COURSE OF DEALING
among its members and among the profession
at large, to promote uniformity of legislation in matters affecting commercial law, and to foster among its members a feeling of fraternity and mutual confidence Its members are lawyers, commercial agencies, and law list publishers
The Commercial Law League of America is the national association supporting and advo-cating for the interests of professionals practic-ing commercial law It is an organization of attorneys and other professionals actively en-gaged in the fields of commercial law,BANKRUPTCY, collections, finance, andINSOLVENCY The League has been a pioneer in standardizing commercial practice It continues to maintain and expand its program of activities in such areas as creditors’ rights, commercial laws and legisla-tion, and bankruptcy and reorganization In March 2003, the CLLA presented testimony and
a formal position paper before a U.S Congress subcommittee for meaningful bankruptcy re-form, relative to the pending Bankruptcy Abuse Prevention and CONSUMER PROTECTION Act of
2003, H.R 975, 108th Cong., 1st Sess
The CLLA maintains more than 40 com-mittees covering various areas of commercial law and other topics, such as world peace through law and world trade Its activities include educational programs on legal issues
of PUBLIC INTEREST and importance Along with the American Bankruptcy Institute, it also sponsors the American Board of Certification (ABC), a non–profit organization that serves to improve and certify attorneys belonging to bankruptcy and creditors’ rights bars
The CLLA has sections on commercial collection agencies and young members, as well
as committees on bankruptcy and theUNIFORM COMMERCIAL CODE It publishes the Commercial Law Journal ten times a year and holds annual meetings, often combining national conferences with those of other prominent organizations, such as the National Association of Credit Management and the Finance, Credit and International Business Association (FCIB) In
1998, the CLLA began holding international credit conferences as well This international exposure helped increase CLLA membership to more than 3,000 people worldwide as of 2009 Web site: www.ccla.org
FURTHER READINGS Commercial Law League of America Available online at www.clla.org (accessed November 20, 2009) Miller, Judith Greenstone 2003 “Bankruptcy Abuse Prevention and Consumer Protection Act of 2003 ” FDCH Congressional Testimony (March 4).
CROSS REFERENCES Bankruptcy; Uniform Commercial Code.
COMMERCIAL PAPER Commercial paper is a written instrument or document such as a check, draft, promissory note,
or a certificate of deposit, that manifests the pledge
or duty of one individual to pay money to another
COMMERCIAL PAPER is ordinarily used in business transactions, since it is a reliable and expedient means of dealing with large sums of money and minimizes the risks inherent in using cash, such as the increased possibility of theft
One of the most significant aspects of commercial paper is that it is negotiable, which means that it can be freely transferred from one party to another, either through endorse-ment or delivery The terms commercial paper and NEGOTIABLE INSTRUMENT can be used inter-changeably
Since commercial paper constitutesPERSONAL PROPERTY, it is transferable by sale or gift and can
be loaned, lost, stolen, and taxed Commercial paper is a specific type of property primarily governed by article 3 of theUNIFORM COMMERCIAL CODE(UCC), which is in effect in all 50 states, the District of Columbia, and the Virgin Islands Although Louisiana has not enacted all the articles of the UCC, it has adopted article 3
Trang 10Types of Commercial Paper
The UCC identifies four basic kinds of
com-mercial paper: promissory notes, drafts, checks,
and certificates of deposit The most
fundamen-tal type of commercial paper is a PROMISSORY
NOTE, a written pledge to pay money A
pro-missory note is a two-party paper The maker is
the individual who promises to pay whereas
the payee or holder is the person to whom
payment is promised The payee can be either a
specifically named individual or merely the
bearer of the instrument who has it in his or her
physical possession when he or she seeks to be
paid according to its terms A note payable to
“bearer” can be paid to the person who presents
it for remuneration Such an instrument is said
to be bearer paper
A promissory note that is payable on
demand can be redeemed by the payee at any
time, whereas a time note has a date for payment
on its face that establishes the date when the
holder will have an enforceable right to receive
payment under it There is no obligation to pay
a time note until the date designated on its face
The ordinary purpose of a promissory note
is to borrow money Promissory notes should
not be confused with credit or loan agreements,
which are separate instruments that are usually
signed at the same time as promissory notes,
but which merely describe the terms of the
transactions
A promissory note serves as DOCUMENTARY
EVIDENCEof a debt It can be endorsed and sold
at a discount to other parties, and each
subsequent endorser becomes secondarily liable
for the amount specified on the face of the
instrument A number of CONSUMER CREDIT
dealings are funded through the use of
promis-sory notes
Certain types of promissory notes are sold at
a discount, such as U.S savings bonds and
corporation bonds Such an instrument is sold
for an amount below its FACE VALUE and can
subsequently be redeemed on the due date or
date of maturity for the entire face amount The
interest obtained by the holder of the
instru-ment is the difference between the purchase
price and the redemption price In certain
instances, bonds that are not redeemed
imme-diately upon maturity accumulate interest
following the due date and are ultimately worth
more than their face value when redeemed at a
later time If such bonds are cashed in before maturity, the holder receives less than the face value
A draft, also known as aBILL OF EXCHANGE, is
a three-party paper ordering the payment of money The drawer is the individual issuing the order to pay, while the drawee is the party to whom the order to pay is given As in the case of
a promissory note, the payee is either a specified individual or the bearer of the draft who is to receive payment according to its terms The draft is made payable on demand or on a certain date A common example of a draft is a cashier’s check
A draft is often used in business to obtain payment for items that must be shipped over long distances Drafts are often the preferred method of payment for purchasers who want
to examine goods prior to payment or who do not have the necessary funds available at the time of sale The vendor might have reserva-tions concerning the buyer’s credit and desire payment as soon as possible The procedure ordinarily followed in such instances is that upon shipment of the goods, the seller receives a
BILL OF LADINGfrom the carrier The bill of lading
Checks are considered
a type of commercial paper, as well as a specific kind of bank draft.
DENNIS DEGNAN/ CORBIS.
COMMERCIAL PAPER 17