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This Article proceeds as follows: Part I describes case law which uses a “penalty” interpretation for § 2-718(2) and (3). Part II describes case law in which courts do not apply a penalty. Part III offers a penalty-free interpretation for § 2-718(2) and (3) that remains true to the statutory language. These three parts make extensive use of numerical examples and explanations. Although the presentation may seem dense in parts, an appreciation of the numbers is essential to understanding both the problem and the solution.

Part IV describes the drafting history of § 2-718(2) and (3) to support the preferred interpretation. Understanding how we got here motivates the impetus for reform by revealing the complete lack of justification for the penalty interpretation. Part V explains that correcting the penalty interpretation has the potential to positively impact the lives of many low-income individuals, people for whom $500 is by no means a small calculation quibble. Here, structural concerns and system-design failures are discussed as important factors in favor of reform. The Article concludes in Part VI with a defense of a populist agenda for a non-uniform amendment to the UCC, including an appendix offering the simple statutory fix for proposal to state legislatures. It describes the kind of theory of legislation required to advocate for change despite the risk that such a change poses for uniformity in the law.



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