Giuliano Castellano & Andrea Tosato
Hasting Law Journal,
Hasting Law Journal,
Vol. 72, Issue (19 April 2021)
Abstract: Commercial law is not a single, monolithic entity. It has grown into a dense thicket of subject-specific branches that govern a broad range of transactions and corporate actions. When one of these events falls concurrently within the purview of two or more of these commercial law branches – such as corporate law, intellectual property law, secured transactions law, conduct and prudential regulation – an overlap materializes. We refer to this legal phenomenon as a commercial law intersection (CLI). Some notable examples of transactions that feature CLIs include bank loans secured by shares, supply chain financing, patent cross-licensing, and blockchain-based initial coin offerings.
CLIs present a complex and multi-faceted challenge. The convergence of commercial law branches is frequently beset with failures in coordination that both distort incentives for market participants and increase transaction costs. Crucially, in the most severe cases, this affliction deters business actors from entering into the affected transactions altogether. The cries of scholars, judges, and practitioners lamenting these issues have grown ever louder yet methodical, comprehensive solutions remain elusive.
This article endeavors to fill this void. First, it provides a comprehensive analysis of CLIs and their coordination failures. Drawing from systems theory and jurisprudence, it then identifies the deficiencies of the most common approaches used to reconcile tensions between commercial law branches, before advancing the concepts of “coherence” and “unity of purpose” as the key to addressing such shortcomings. Finally, it formulates a two-step interpretive method that unties the Gordian knot created by CLI coordination failures. Click here to read the full article. The article has been cited in the following policy documents: Cape Town Convention Academic Project,Guide on Best Practices For Electronic Collateral Registries (Cambridge, UK and Rome, Italy 2021); International Finance Corporation, Coordinating Prudential Regulation and Secured Transactions Frameworks: A Primer(Washington D.C., 2020); World Bank, Distributed Ledger Technology and Secured Transactions: Guidance Note 3 (Washington D.C., 2020).