One of my favorite things about law school is that you learn a lot about how the world actually works. For example, I used to wonder how exactly corporations do business. Now, after nearly completing Bizzorg, I understand. I have a lot of respect now for transactional lawyers and that special kind of practical creativity they possess. Another example: just last year, I helped my wife resolve a dispute with a seller on eBay who did not want to give a refund after she offered to return a purse that he had described as navy and cream but was actually plain old black and white. We pulled out the UCC, and I explained to him that § 2-711(2)(a) is pretty clear that she gets her money back or we go to court (for the $50 she paid for the purse). He was pretty scared, so we settled out of court for an undisclosed amount.
Well, it has happened again. Recently, my wife's PayPal account got hacked into, and the villain charged up $200 worth of stuff. No biggie . . . except that the bank account tied to the PayPal account did not have $200 in it. So we got charged the $200 plus an NSF fee.* We easily got the money back from PayPal (they actually told us about the hacking in the first place), but the bank was a little tougher to deal with. At first, they said, "You don't get your NSF fee back because it wasn't our fault." My wife's a tough cookie, so she played hardball and we got our money back. Tonight, we were talking about it, and suddenly the mysteries of Article 4 came clear to me. Under § 4-401, we're not liable for the PayPal charges because they weren't authorized. If we're not liable for the PayPal charges, how can we be liable for the resulting NSF fees? It was beautiful.
Did I really just say that?
*Can you imagine that a bank she worked at in college tried to cover the entirety of its overhead from NSF fees? And they were pretty close, too.