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Do Juries Add Value?: Evidence From An Empirical Study Of Jury Trial Waiver Clauses In Large Corporate Contracts, Theodore Eisenberg, Geoffrey P. Miller

Cornell Law Faculty Publications

We study jury trial waivers in a data set of 2,816 contracts contained as exhibits in Form 8-K filings by reporting corporations during 2002. Because these contracts are associated with events deemed material to the financial condition of SEC-reporting firms, they likely are carefully negotiated by sophisticated, well-informed parties and thus provide presumptive evidence about the value associated with the availability of jury trials. Only a small minority of contracts, about 20 percent, waived jury trials. An additional nine percent of contracts had arbitration clauses that effectively preclude jury trials though the reason for arbitration clauses need not specifically relate …

The Reemergence Of Restitution: Theory And Practice In The Restatement (Third) Of Restitution, Chaim Saiman

Working Paper Series

The ALI’s Restatement (Third) of Restitution provides one of the most interesting expressions of contemporary legal conceptualism. This paper explores the theory and practice of post-realist conceptualism through a review and critique of the Restatement. At the theoretical level, the paper develops a typology of different forms of conceptualism, and shows that the Restatement has more in common with the high formalism of the nineteenth century than with contemporary modes of private law discourse. At the level of substantive doctrine, the paper explains why labels in fact make a difference, and assesses which recoveries are more (and less) likely under …

Damages In Lieu Of Performance Because Of Breach Of Contract, John Y. Gotanda

Working Paper Series

In contract disputes between transnational contracting parties, damages are often awarded to compensate a claimant for loss, injury or detriment resulting from a respondent’s failure to perform the agreement. In fact, damages may be the principal means of substituting for performance or they may complement other remedies, such as recision or specific performance.

Damages for breach of contract typically serve to protect one of three interests of a claimant: (1) performance interest (also known as expectation interest); (2) reliance interest; or (3) restitution interest. The primary goal of damages in most jurisdictions is to fulfil a claimant’s performance interest by …

Greed And Pride In International Bankruptcy: The Problems And Proposed Solutions To “Local Interests”, John A. E. Pottow

Law & Economics Working Papers Archive: 2003-2009

From just-enacted (2005) chapter 15 of the U.S. Bankruptcy Code to the U.K. Enterprise Act of 2002, legislative reforms to international bankruptcy are on the rise. One of the thorniest issues facing scholars and policymakers alike in these efforts is what to do with the nettlesome problem of “local interests.” What exactly are these “local interests,” and what is it that we are we trying to protect? Literature to date has been elusive in pinning this down and has offered, for the most part, only undifferentiated anxiety that an international bankruptcy regime may impinge undesirably upon “local concerns.” This article …

The "Branding Effect" Of Contracts, D. Gordon Smith

Faculty Scholarship

In his case study of the MasterCard IPO and its predecessor piece on the Google IPO, Victor Fleischer claims to find evidence of a branding effect of legal infrastructure. The branding effect is not aimed at reducing the potential for opportunism by a counterparty to a contract, but rather at increasing the attractiveness of a product to present and future users or improving the image of a company in the eyes of regulators, judges, and juries. In this essay commenting on Fleischer's work, I endorse the notion that deal structures have branding effects and position Fleischer's work within a larger …

The Entrepreneur And The Theory Of The Modern Corporation, Charles R.T. O'Kelley

Scholarly Works

The foremost description of the classic entrepreneur, immediately prior to the Great Depression and now, was presented by Frank Knight in his seminal work, RISK, UNCERTAINTY, AND PROFIT. In this Article, I will explicate Knight's theory of the entrepreneur and show how it relates to both the Berle-Means Paradigm and the nexus-of-contracts theory of the corporation. My effort here is in part intellectual history and in part the tentative beginnings of a new positive account of the corporation. In the latter regard, this Article takes only the first step in what may prove a quite exhaustive effort to re-plow the …

Illegal Contacts And Efficient Deterrence: A Study In Modern Contract Theory, Juliet P. Kostritsky

Faculty Publications

This Article offers a unified theory that explains why courts, despite the compelling argument for deterrence, should not apply the no-effect rule of illegal contracts uniformly and why they should vary the type of relief according to the factual setting. It posits that a graduated relief structure will maximize efficient deterrence. An efficient deterrence scheme will preserve limited personal, judicial and societal resources without burdening legitimate transactions.

Toward Praxis, Emily Houh

Faculty Articles and Other Publications

This Essay, written for a 2005 symposium issue of the U.C. Davis Law Review, responds to an important question posed by the symposium organizers: What is the future of critical race feminism? In this Essay, I use a common law contractual good faith antidiscrimination claim, developed and proposed by me in a series of previously written articles, to help answer that question. While, in the past, my proposed good faith claim aimed principally to operationalize some recurring and foundational insights of critical race theory, such as the race crits' critique of the intentionality requirement in conventional antidiscrimination law, the Davis …

Survey Of The Law Of Cyberspace: Electronic Contracting Cases 2005-2006, Juliet M. Moringiello, William L. Reynolds

Faculty Scholarship

This article analyzes the judicial decisions involving Internet and other electronic contracts during the period from July 1, 2005 to June 30, 2006. The authors explain that this year's cases show a maturation of the common law of electronic contracts in that the judges are beginning to recognize the realities of electronic communications and to apply traditional contract principles to those communications unless the realities of the technology justifies a different result.

The Elasticity Of Contract, Martha M. Ertman

Faculty Scholarship

No abstract provided.

You Don’T Have To Be Ludwig Wittgenstein’: How Llewellyn’S Concept Of Agreement Should Change The Law Of Open-Quantity Contracts, Henry Allen Blair

Faculty Scholarship

In this article, Professor Allen Blair examines the preeminent role of exclusivity in open-quantity contracts under the Uniform Commercial Code (“UCC”). Although the text of the UCC does not mandate that open-quantity contracts be exclusive, the vast majority of courts considering the issue have held that exclusivity is necessary to prevent such contracts from failing for lack of mutuality of obligation. The Article traces the historic development of open-quantity agreements, focusing on pre-Code cases recognizing the commercial utility of such agreements but struggling with how to accommodate them under a classical model of contract formation. It was in this historic …

Go Out And Look: The Challenge And Promise Of Empirical Scholarship In Contract Law, David Snyder

Articles in Law Reviews & Other Academic Journals

This introduction to the symposium on Empirical Scholarship in Contract Law, sponsored in January 2006 by the Contracts Section of the Association of American Law Schools and published in the Tulane Law Review, pushes for an increased focus on the real world and argues that highly quantitative statistical analyses of published judicial opinions are no more empirical than simple case notes. While this short essay argues for increased rigor in empirical research, it also recognizes the limits of scientific methods for legal analysis and suggests that the seduction of scientific appearances, now as in the days of Langdell's legal science, …

Fiduciary Duties And Unincorporated Business Entities: In Defense Of The "Manifestly Unreasonable" Standard, Mark J. Loewenstein

Publications

This article wades into the debate between contractarians and anti-contractarians over the extent to which statutes on unincorporated business entities should limit the ability of the participants in those entities to contract around fiduciary duties. Statutes enacted in the past several years provide considerable, but not complete, freedom to limit fiduciary duties. Contractarians argue that statutory limitations are inefficient and unnecessary, while anti-contractarians take the view that the statutes provide too much freedom of contract. This article stakes out a middle ground, arguing that the drafters of the statutes got it right and that in the absence of statutory limitations …

Comparative Study Of The Formation Of Electronic Contracts In American Law With References To International Law, Roberto Rosas

Faculty Articles

No abstract provided.

Comparative Study Of The Formation Of Electronic Contracts In American Law With References To International Law, Roberto Rosas

Faculty Articles

An understanding of the basic principles that regulate contract formation is of great importance when deciphering the most appropriate ways of fom1ing a new contract or when assessing the legality of an already existing contract. While the basic rules of contract formation are generally applicable to all types of contracts regardless of the method utilized in their creation, there are some juridical rules that apply specifically to electronically created contracts.

It’S Not About The Money: The Role Of Preferences, Cognitive Biases And Heuristics Among Professional Athletes, Michael Mccann

Law Faculty Scholarship

Professional athletes are often regarded as selfish, greedy, and out-of-touch with regular people. They hire agents who are vilified for negotiating employment contracts that occasionally yield compensation in excess of national gross domestic products. Professional athletes are thus commonly assumed to most value economic remuneration, rather than the love of the game or some other intangible, romanticized inclination.

Lending credibility to this intuition is the rational actor model, a law and economic precept which presupposes that when individuals are presented with a set of choices, they rationally weigh costs and benefits, and select the course of action that maximizes their …

Formalism In American Contract Law: Classical And Contemporary, Mark L. Movsesian

Faculty Publications

It is a universally acknowledged truth that we live in a formalist era—at least when it comes to American contract law. Much more than the jurisprudence of a generation ago, today's cutting-edge work in American contract scholarship values the formalist virtues of bright-line rules, objective interpretation, and party autonomy. Policing bargains for substantive fairness seems more and more an outdated notion. Courts, it is thought, should refrain from interfering with market exchanges. Private arbitration has displaced courts in the context of many traditional contract disputes. Even adhesion contracts find their defenders, much to the chagrin of communitarian scholars.

This is …

The Limits Of Limiting Liability In The Battle Of The Forms: U.C.C. Section 2-207 And The “Material Alteration” Inquiry, Colin P. Marks

Faculty Articles

The “surprise or hardship” approach to UCC section 2-207 is the approach courts should use to determine the applicability of liability clauses in the battle of the forms. However, courts use varying approaches to decide whether clauses limiting liability materially alter the contract under UCC section 2-207. Courts have adopted three different approaches: (1) the per se material alternation approach; (2) the per se not material alternation approach; and (3) the “surprise or hardship” approach.

The per se material alteration approach focuses on the surprise or hardship factors found in comment 4 of section 2-207; however, that approach is flawed …

Penalty Defaults In Family Law: The Case Of Child Custody, Margaret F. Brinig

Journal Articles

This paper considers whether an amendment to state divorce laws that strengthens its joint custody preference operates as a traditional default rule, specifying what most divorcing couples would choose or as a penalty default rule the parties will attempt to contract around.

While the Oregon statutes that frame our discussion here, like most state laws, do not state an explicit preference for joint custody, shared custody is certainly encouraged by Section 107.179, which refers cases in which the parties cannot agree on joint custody to mediation and by Section 107.105, which requires the court to consider awarding custody jointly. In …

An Empirical Study Of Securities Disclosure Practice, Mitu Gulati, Stephen J. Choi

Faculty Scholarship

Using a dataset of sovereign bond offering documents and underlying bond contracts for ten sovereign issuers from 1985-2005, we examine the securities disclosure practices of issuers and attorneys. The sovereign bond market is comprised of sophisticated issuers with highly paid law firms. If anyone complies fully with federal securities disclosure requirements, we expect sovereign issuers and their attorneys to do so. On the other hand, network effects that determine what information issuers chose to disclose as well as the high cost of determining what information is required for disclosure may lead issuers to fail to meet their disclosure duties. We …

Judicial Incorporation Of Trade Usages: A Functional Solution To The Opportunism Problem, Juliet P. Kostritsky

Faculty Publications

Article 2 of the UCC directed courts to look to business norms as a primary means of interpreting contracts. Recently the new formalists have attacked this strategy of norm incorporation as a misguided one that will lead inevitably to significant error costs. Accordingly, they have embraced plain meaning as the preferred interpretive strategy. This article argues that the strategy of rejecting trade usages unless they are part of the express contract is too rigid. The rejection is premised on an overly narrow cost/benefit analysis that fails to account for the functional role that such usages may play in curbing opportunistic …

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

Articles

This Article is structured as follows. Part I compares the terms and conditions in the purchase orders of the Original Equipment Manufacturers (OEMs) and highlights important differences in the substance of these boilerplate provisions. It argues that these differences cannot be easily reconciled with the prediction that sophisticated parties draft the most efficient boilerplate terms. Part II examines how these forms are drafted, how their terms are negotiated, and how the OEMs guard their terms from erosion. It provides some insight on how tailoring occurs and how the internal organization of a party to a deal affects the terms that …