James W. Bowers


Contractual relations frequently involve multiple transactions, which might give rise either to a single aggregate debt, or else to multiple differing obligations. This conflict creates the application of payments problem. Unsurprisingly, the common law developed long-standing rules for the application of partial payments to multiple, but remedially distinguishable debts. The subject is made timely again by the recent enactments of the 1999 revision of Article 9 of the Uniform Commercial Code. Article 9 instructs courts how to solve the application of payments problem when some partial payments might satisfy “purchase money” security interests. The enactments repealed the common law application of payment rules for consumer purchase money transactions, and invited courts to reinvent consumer payment application rules from scratch. This article uses Williams v. Walker Thomas Furniture Company, a classic aberrant consumer contract case, to provide the first rough economic cut at the impact of the new enactments to Article 9 and to illuminate the challenges the courts will face as they approach the new task of developing consumer payment application rules.