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Contracts

University of Michigan Law School

Bargaining

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Boilerplate And Economic Power In Auto-Manufacturing Contracts, Omri Ben-Shahar, James J. White Jan 2007

Boilerplate And Economic Power In Auto-Manufacturing Contracts, Omri Ben-Shahar, James J. White

Book Chapters

This chapter examines the boilerplate contracts used by auto makers to procure parts from suppliers. It identifies drafting and negotiation techniques that are used to secure advantageous terms. It also explores some prominent specific arrangements as evidence that firms with bargaining power are exploiting their position to dictate self-serving but inefficient terms. Finally, it shows how standard contractual clauses solve the problem of ex-post hold-up by suppliers.


Preface: Or: A Boilerplate Introduction, Omri Ben-Shahar Jan 2007

Preface: Or: A Boilerplate Introduction, Omri Ben-Shahar

Book Chapters

It is tempting to open this volume with yet another "boilerplate" salute to the challenge that standard-form contracts pose for contract law doctrine. You may have seen many tributes to this fundamental problem. Ifi were to offer my own variation on this familiar introduction, I would have perhaps tried to come up with an original spin to induce you to read forward another paragraph or two. I would probably have talked about a major divide within contract law between the "law of negotiations" and "product regulation." The former is the body of doctrines that determine the legal consequences of bargaining …


The Return Of Bargain: An Economic Theory Of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses And Consumers, Jason Scott Johnston Mar 2006

The Return Of Bargain: An Economic Theory Of How Standard-Form Contracts Enable Cooperative Negotiation Between Businesses And Consumers, Jason Scott Johnston

Michigan Law Review

Among attorneys, judges, and legal academics, there is virtual consensus that the widespread use by business firms of standard-form contracts in their dealings with consumers has completely eliminated bargaining in consumer contracts. I believe that this perception is false, that rather than precluding bargaining and negotiation, standard-form contracts in fact facilitate bargaining and are a crucial instrument in the establishment and maintenance of cooperative relationships between firms and their customers. On this view, which I elaborate below, firms use clear and unconditional standard form contract terms not because they will insist upon those terms, but because they have given their …


The Strategy Of Boilerplate, Robert B. Ahdieh Jan 2006

The Strategy Of Boilerplate, Robert B. Ahdieh

Michigan Law Review

That boilerplate is pervasive is hardly surprising. In a variety of ways, standardized terms in day-to-day contracts serve an essential cost-saving function. By this measure, one might expect less frequent reliance on boilerplate in high-value contracts among sophisticated parties. Yet standard terms would appear to be no less widespread in contracts among the sophisticated. Notwithstanding their representation by able counsel, charged to craft comprehensive and detailed, but also particularized, contracts, such parties will commonly conclude agreements comprised heavily of traditional terms--contracting norms of a sort-rather than terms tailored to the distinct features of their particular bargain. Examples of seemingly suboptimal …


Hypothetical Bargains: The Normative Structure Of Contract Interpretation, David Charny Jun 1991

Hypothetical Bargains: The Normative Structure Of Contract Interpretation, David Charny

Michigan Law Review

The argument here amplifies the contract literature with respect to basic contract theory and its doctrinal applications. The argument extends and corrects the current understanding of contract theory in several respects. First, it clarifies the role of liberal and communitarian argument in constructing interpretive conventions for contract. As currently understood among lawyers, the predominant noninstrumental theories of contract are in large measure indeterminate as to the question of default rules. Nonetheless, as I shall explain, these theories do have limited implications for the ground rules that govern interpretive conventions. The argument here, then, clarifies the role of noninstrumental theory in …


The Strategic Structure Of Offer And Acceptance: Game Theory And The Law Of Contract Formation, Avery Katz Nov 1990

The Strategic Structure Of Offer And Acceptance: Game Theory And The Law Of Contract Formation, Avery Katz

Michigan Law Review

The purpose of this article is to promote a particular research program; namely, the use of game theory to analyze the law of contract formation. Although I will often simply speak of offer and acceptance in my discussion, I mean to refer to a broader set of issues than are commonly denoted by this doctrinal label. My program transcends the narrow issue of whether particular communications technically should be classified as offers and acceptances, and includes questions often analyzed under the rubrics of implication and interpretation. At its broadest, my argument addresses all legal rules that answer two types of …