Modem payment law began precisely a quarter of a millennium ago, when Lord Mansfield decided Miller v. Race. After 250 years, we know little more than Mansfield, even with the analytic power of modern neoclassical microeconomics. Many of the simplest questions have no easy answer: What is a payment? (The U.C.C. has no definition.) What is payment finality, and why is it important? (There is no consensus, especially because payment finality was law long before bankers discovered its connection to systemic risk.) What is the normative rationale of the clearing and settlement rules in the U.C.C.? (Again, no consensus, and not even much commentary.) What is the proper scope of payment law? (Explain why U.C.C. Article 5 is in most payment casebooks, and the law of suretyship is not.)

Neoclassical microeconomics has been a general success in business law: a facile framework for difficult legal problems. But it has not worked in payment law, with a few exceptions such as the allocation of risk for fraud and mistake. Is there a reason for this? Read this commentary to find out.

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