Introduction

One of the central norms of the Uniform Commercial Code is “to make uniform the law among the various jurisdictions.” Nowhere in the Code, however, is the substance of the uniformity norm of commercial law explained or justified. Moreover, in the thirty years following the remarkable success of the codification enterprise in achieving formal uniformity – the widespread adoption of the Code in all American jurisdictions – there has been virtually no academic or judicial analysis of whether this grand experiment in the uniform codification of American commercial law has, in fact, produced the social benefits that are presumed to follow from uniformity. Instead, there is a broad consensus, uninformed by evidence or analysis, that formal uniformity has led as well to substantive uniformity, to the certainty, predictability and stability that are the bedrock desiderata of commercial law.

This uncritical acceptance of the notion that uniform codification best promotes the substantive goals of uniformity is puzzling. Large areas of commercial contract law and corporate law remain outside the Code and have evolved in a formally nonuniform fashion through the process of common law adjudication and statutory enactments in various states. In the case of corporate charters, a robust literature has focused on the substantive benefits inherent in jurisdictional diversity – stimulating a “race to the top” as states compete among themselves to capture the economic rents from incorporation.