The Irregular Issuance of Warehouse Receipts and Article Seven of the Uniform Commercial Code
The draftsmen of Article Seven were well aware of the problems caused by irregular issuance of warehouse receipts and there will be fewer problems of irregularity under the Code for two reasons. First, the Code’s formal requirements for issuance of warehouse receipts are less stringent than are those imposed by the UWRA, thereby lessening the chances of any irregularity occurring. Second, the Code contains two sections which aim to minimize the consequences of any irregularities which may occur. In this article I will discuss the types of defects that have been troublesome over the years, focussing on the ways in which they have arisen, but also discussing some of their particularly troublesome consequences; then I shall consider the ways in which the Code affects these irregularities and their consequences.