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Full-Text Articles in Law
Two Visions Of Contract, Hanoch Dagan
Two Visions Of Contract, Hanoch Dagan
Michigan Law Review
A Review of Justice in Transactions: A Theory of Contract Law. by Peter Benson.
A Complete View Of The Cathedral: Claims Of Tortious Interference And The Specific Performance Remedy In Mergers And Acquisitions Litigation, Luke Nikas, Paul B. Maslo
A Complete View Of The Cathedral: Claims Of Tortious Interference And The Specific Performance Remedy In Mergers And Acquisitions Litigation, Luke Nikas, Paul B. Maslo
Michigan Business & Entrepreneurial Law Review
A bank promises to lend several billion dollars to fund a buyer’s purchase of a target company. The buyer enters into a merger agreement with the target. Thereafter, the economy plummets, and the bank decides that breaching its contract with the buyer will cost less than performing. The buyer seeks specific performance. The target also sues the bank, alleging tortious interference with the merger agreement. Billions of dollars are on the line. This is the reality lived by many investment banks that committed to fund leveraged buyouts during the recent economic downturn. Most of these matters were resolved in private …
A Comparative Fault Defense In Contract Law, Ariel Porat
A Comparative Fault Defense In Contract Law, Ariel Porat
Michigan Law Review
This Article calls for the recognition of a comparative fault defense in contract law. Part I sets the framework for this defense and suggests the situations in which it should apply. These situations are sorted under two headings: cases of noncooperation and cases of overreliance. Part II unfolds the main argument for recognizing the defense and recommends applying the defense only in cases where cooperation or avoidance of overreliance is low cost.
Why Breach Of Contract May Not Be Immoral Given The Incompleteness Of Contracts, Steven Shavell
Why Breach Of Contract May Not Be Immoral Given The Incompleteness Of Contracts, Steven Shavell
Michigan Law Review
There is a widely held view that breach of contract is immoral. I suggest here that breach may often be seen as moral, once one appreciates that contracts are incompletely detailed agreements and that breach may be committed in problematic contingencies that were not explicitly addressed by the governing contracts. In other words, it is a mistake generally to treat a breach as a violation of a promise that was intended to cover the particular contingency that eventuated.
Could Breach Of Contract Be Immoral?, Seana Shiffrin
Could Breach Of Contract Be Immoral?, Seana Shiffrin
Michigan Law Review
Some scholars defend the contract law's ban on punitive damage awards on the grounds that breach of contract, in itself, is not morally wrong. In this Article, I offer two responses. First, I refute one prevalent argument of Steven Shavell's in support of this view. Shavell argues that contractual breach is not immoral in those cases in which the legal regime would offer expectation damages because the contracting parties would not have agreed to require performance had they explicitly deliberated about the circumstances occasioning the breach. I criticize his argument for failing to justify this hypothetical-contract approach and, in any …
Is U.S. Ceo Compensation Inefficient Pay Without Performance?, John E. Core, Wayne R. Guay, Randall S. Thompson
Is U.S. Ceo Compensation Inefficient Pay Without Performance?, John E. Core, Wayne R. Guay, Randall S. Thompson
Michigan Law Review
In Pay Without Performance, Professors Lucian Bebchuk and Jesse Fried develop and summarize the leading critiques of current executive compensation practices in the United States. This book, and their highly influential earlier article, Managerial Power and Rent Extraction in the Design of Executive Compensation, with David Walker offer a negative, if mainstream, assessment of the state of U.S. executive compensation: U.S. executive compensation practices are failing in a widespread manner, and much systemic reform is needed. The purpose of our Review is to summarize the book and to offer some counterarguments to try to balance what is becoming …
Threatening An Irrational Breach Of Contract, Oren Bar-Gill, Omri Ben-Shahar
Threatening An Irrational Breach Of Contract, Oren Bar-Gill, Omri Ben-Shahar
Articles
When circumstances surrounding the contract change, a party might consider breach a more attractive option than performance. Threatening breach, this party may induce the other party to modify the original agreement. The contract law doctrine of modification determines whether and when these modifications are enforceable. To promote social welfare as well as the interests of the threatened party, the law should enforce modifications if and only if the modification demand is backed by a credible threat to breach. This paper argues that credibility is not a function of pecuniary interests alone. A decision to breach can be motivated also by …
The Law Of Duress And The Economics Of Credible Threats, Oren Bar-Gill, Omri Ben-Shahar
The Law Of Duress And The Economics Of Credible Threats, Oren Bar-Gill, Omri Ben-Shahar
Articles
This paper argues that enforcement of an agreement, reached under a threat to refrain from dealing, should be conditioned solely on the threat's credibility. When a credible threat exists, enforcement promotes social welfare and the threatened party's interests. If agreements backed by credible threats were not enforceable, the threatening party would not extort them and would instead refrain from deaing-to the threatened party's detriment. The doctrine of duress, which invalidates such agreements, hurts the coerced party. By denying enforcement when a credible threat exists, the duress doctrine precludes the threatened party from making the commitment necessary to reach agreement. Paradoxically, …
Performance Risk, Form Contracts And Ucita, Leo L. Clarke
Performance Risk, Form Contracts And Ucita, Leo L. Clarke
Michigan Telecommunications & Technology Law Review
No scholarly commentator has suggested that the form contract rules provide a satisfactory answer to the commercial problem of performance risk. So, one might think that the dawn of the "information economy" would be a propitious time to implement a new doctrinal approach. Apparently not: the National Conference of Commissioners on Uniform State Laws (the "Conference") has promulgated a comprehensive commercial statute that fails to remedy or even modify the law of form contracts in purely commercial transactions. The Uniform Computer Information Transactions Act ("UCITA")--drafted to provide the background law for many of the most significant transactions in the information …
Good Faith And The Cooperative Antagonist (Symposium On Revised Article 1 And Proposed Revised Article 2 Of The Uniform Commercial Code), James J. White
Good Faith And The Cooperative Antagonist (Symposium On Revised Article 1 And Proposed Revised Article 2 Of The Uniform Commercial Code), James J. White
Articles
One of Karl Llewellyn's most noted achievements in the Uniform Commercial Code was to impose the duty of good faith on every obligation under the Uniform Commercial Code.1 Some (I am one) have privately thought that imposition of this unmeasurable, undefinable duty was Llewellyn's cruelest trick, but no court, nor any academic writer, has ever been so bold or so gauche as to suggest that good faith should not attend the obligations of parties under the UCC. Notwithstanding this silent indorsement of the duty of good faith, the courts2 and commentators3 have had difficulty in determining what is and what …
Autistic Contracts (Symposium), James J. White
Autistic Contracts (Symposium), James J. White
Articles
In this paper I address the question whether the law should affirm the offeror's inference and should bind the offeree to the terms proposed by the offeror even in circumstances where the offeree may not intend to accept those terms and where an objective observer might not draw the inference of agreement from the offeree's act. Modem practice and current proposals concerning contract formation in Revised Article 2 and in the Uniform Computer Information Transactions Act (nee Article 2B) press these issues on us more forcefully than old practices and different law did. 1 But contractual autism is not new; …
The Secrecy Interest In Contract Law, Omri Ben-Shahar, Lisa Bernstein
The Secrecy Interest In Contract Law, Omri Ben-Shahar, Lisa Bernstein
Articles
A long and distinguished line of law-and-economics articles has established that in many circumstances fully compensatory expectation damages are a desirable remedy for breach of contract because they induce both efficient performance and efficient breach. The expectation measure, which seeks to put the breached-against party in the position she would have been in had the contract been performed, has, therefore, rightly been chosen as the dominant contract default rule. It does a far better job of regulating breach-or-perform incentives than its leading competitors-the restitution measure, the reliance measure, and specific performance. This Essay does not directly take issue with the …
The Tentative Case Against Flexibility In Commercial Law, Omri Ben-Shahar
The Tentative Case Against Flexibility In Commercial Law, Omri Ben-Shahar
Articles
Well-rooted in modern commercial law is the idea that the law and the obligations that it enforces should reflect the empirical reality of the relationship between the contracting parties. The Uniform Commercial Code ("Code") champions this tradition by viewing the performance practices formed among the parties throughout their interaction as a primary source for interpreting and supplementing their explicit contracts. The generous recognition of waiver and modifications, as well as the binding force the Code accords to course of performance, course of dealings, and customary trade usages, effectively permits unwritten commercial practices to vary and to erode explicit contractual provisions.
The Efficiency Of Specific Performance: Toward A Unified Theory Of Contract Remedies, Thomas S. Ulen
The Efficiency Of Specific Performance: Toward A Unified Theory Of Contract Remedies, Thomas S. Ulen
Michigan Law Review
The purpose of this essay is to begin the development of an integrated theory of contract remedies by delineating the circumstances under which courts should simply enforce a stipulated remedy clause or grant relief to the innocent party in the form of damages or specific performance. The conclusion, in brief, is that in the absence of stipulated remedies in the contract that survive scrutiny on the usual formation defenses, specific performance is more likely than any form of money damages to achieve efficiency in the exchange and breach of reciprocal promises. If specific performance is the routine remedy for breach, …
Eight Cases And Section 251, James J. White
Eight Cases And Section 251, James J. White
Articles
[A] continuing sense of reliance and security that the promised performance will be forthcoming. . . is an important feature of the bargain-so states Comment 1 to section 2-609 of the Uniform Commercial Code. At common law, one party to a contract might suffer considerable and justifiable anxiety about the other party's willingness or ability to perform and yet have no legal basis for cancelling the contract or for procuring additional assurances from the other party. Section 251 of the Restatement (Second) of Contracts is designed to provide a remedy for one party's reasonable fears that the other party to …
Contract Law In Modern Commercial Transactions, An Artifact Of Twentieth Century Business Life?, James J. White
Contract Law In Modern Commercial Transactions, An Artifact Of Twentieth Century Business Life?, James J. White
Articles
Diligent first year law students study contract law with a passion previously reserved for romantic objects and religious idols. Their professors lead them in extensive and difficult intellectual explorations of the wilds of contract law. There are careful analyses of why damage recovery X will stimulate performance Y, why recovery A is appropriate to encourage the aggrieved party to return to the market, and so on and so forth. Lurking behind this year long analysis are several inarticulate hypotheses: that they make rational evaluations of the threat of legal sanctions; that they respond in other varied and subtle ways to …
Sunday Laws-Illegality Of Sunday Contracts, Robert O. Hancox S.Ed.
Sunday Laws-Illegality Of Sunday Contracts, Robert O. Hancox S.Ed.
Michigan Law Review
The concept of the Sabbath, the setting apart of one day in seven as a day of rest, was derived from the Mosaic code, the Fourth Commandment directs abstention from labor on the seventh day of the week, and although there is nothing in the New Testament relating to Sunday, the Christian world adopted the first day of the week as a day of rest. Constantine, by an edict in 321 A.D., ordered the suspension on Sunday of all business in the courts of law, except the manumission of slaves, and all other- business except agricultural labor.
Contracts-Statute Of Frauds-Option To Cancel In Contract Of Employment For More Than One Year As Fulfillment Of Statutory Requirement, Cornelia Groefsema
Contracts-Statute Of Frauds-Option To Cancel In Contract Of Employment For More Than One Year As Fulfillment Of Statutory Requirement, Cornelia Groefsema
Michigan Law Review
Plaintiff, Hedda Hopper, sued on an oral agreement for her appearance on a weekly radio broadcast, to be sponsored by Andrew Jergen's Company. The contract was for five years, divided into ten twenty-six week periods. Defendant advertising agency reserved an option to cancel the contract by notifying the plaintiff thereof four weeks prior to the end of any twenty-six week period. Plaintiff was to receive $1,250 per week for the first twenty-six weeks with an increase of $250 per week each odd numbered additional period. Defendant repudiated the contract before any performance and plaintiff asks damages amounting to $495,000. A …
The Impact Of The War On Private Contracts, Werner W. Schroeder
The Impact Of The War On Private Contracts, Werner W. Schroeder
Michigan Law Review
The destruction and impairment of contracts caused by governmental agencies because of the necessities of war production have been more far-reaching than is generally realized. A report that one large industrial organization has been prevented from performance of contracts involving more than one hundred and fifty million dollars gives a hint of the extent of these commercial casualties.
Contracts - Intervening Impossibility - Nature Of Excuse Under Casualty Clause, Edmund R. Blaske
Contracts - Intervening Impossibility - Nature Of Excuse Under Casualty Clause, Edmund R. Blaske
Michigan Law Review
The plaintiff sought to compel the performance of a contract by which the defendant obligated himself to make deliveries of logs in specified months. The contract contained the following casualty clause: "And the seller is not liable for delay or nonshipment or for delay or nondelivery if occasioned by . . . strikes, lockouts, or labor disturbances. . . . Buyers agree to accept delayed shipment and/ or delivery when occasioned by any of the aforementioned causes, if so required by the seller, provided the delay does not exceed thirty days." When performance got under way, the longshoremen's strike intervened …
The Notice Due To A Guarantor, Morton C. Campbell
The Notice Due To A Guarantor, Morton C. Campbell
Michigan Law Review
A guaranty is usually an offer contemplating a unilateral contract in that it requires for acceptance an act or series of acts, or abstention from action, on the part of the offeree. The act or acts ordinarily consist in the furnishing of money, goods, services, or the like, by the offeree to the principal in reliance on the guaranty; or in the assumption of suretyship risk by the offeree on behalf of the principal. Abstention from action commonly consists in the offeree's refraining from pressing the principal by suit or otherwise for an overdue debt.
The Effect Of Impossibility Upon Conditions In Wills, Lewis M. Simes
The Effect Of Impossibility Upon Conditions In Wills, Lewis M. Simes
Michigan Law Review
Writers may discourse upon the danger of construing trees to mean raspberry bushes or cabbages, but the fact remains that written instruments are interpreted with the aid of something more than a dictionary. Circumstances existing both at the time the document is executed and at a subsequent period are considered in determining what it means. This statement applies to conditions as well as to other parts of a written instrument. Nor should we be surprised to find that impossibility of performance may modify legal consequences.
Contracts-Liability Of Assignee For Unfullfilled Duties Of His Assigned
Contracts-Liability Of Assignee For Unfullfilled Duties Of His Assigned
Michigan Law Review
Plaintiff contracted for the sale of lands with H., title being reserved in the plaintiff. The contract purported to bind the assigns of both parties, and contained an acceleration provision in favor of the plaintiff on default of any payment. Under North Dakota law the parties were substantially in the position of vendor-mortgagee and vendee-mortgagor. H then assigned to the defendant who made payments to the plaintiff, and there was also testimony indicating that in the printed form of the assignment defend ant had promised the assignor to assume the duties under the original contract. Upon default and foreclosure sale …
Mutuality In Specific Performance, Edgar N. Durfee
Mutuality In Specific Performance, Edgar N. Durfee
Articles
Prior to the present century, the subject of mutuality in specific performance was an unsolved puzzle. The decisions of the courts were in the main wise, but the attempts both of courts and text writers to formulate a statement of the principle governing these decisions were far from happy. After two centuries of litigation and discussion, the current formula was that the remedy must be mutual, must be equally available to both parties. The worst fault of this formula was its plausibility. Equality is equity, and perfect equality between the parties to a contract is not attained unless remedies are …
Development Of The Doctrine Of Impossibility Of Performance, William Herbert Page
Development Of The Doctrine Of Impossibility Of Performance, William Herbert Page
Michigan Law Review
In common with other systems of law, Anglo-American law has grown in part by the use of analogies; and in part, by receptions from other systems of law.
Is The Assignee Of A Contract Liable For The Non-Performance Of Delegated Duties?, Grover C. Grismore
Is The Assignee Of A Contract Liable For The Non-Performance Of Delegated Duties?, Grover C. Grismore
Articles
IT is an oft recurring statement that "rights arising out of a contract cannot be transferred if they are coupled with liabilities." It is such obscure statements as this which give rise to and perpetuate error, and an examination of the cases will show that this one has been responsible for no little confusion in regard to the matter of assignment in the law of Contract. Our courts, under the pressure of a well filled docket, are prone to seize upon a broad generalization of this kind without examining its true meaning or defining its proper limitations. It is high …
Conflict Of Laws--The Law Controlling The Validity Of A Married Woman's Contract, Victor H. Lane
Conflict Of Laws--The Law Controlling The Validity Of A Married Woman's Contract, Victor H. Lane
Articles
The case of Poole v. Perkins (Va.), IO S. E. 240, involves that troublesome question of whether the validity of a contract is to be ruled by the law of the place where made, or by that of the place of performance.
Subsequent Impossibility As Affecting Contractual Obligations, Ralph W. Aigler
Subsequent Impossibility As Affecting Contractual Obligations, Ralph W. Aigler
Articles
Where the law creates a duty or charge and the party is disabled to perform it without any default in him, and hath no remedy over, there the law will excuse him. * * * But where the party by his own contract creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract. Paradine v. Jane, Aleyn, 26, a case not really involving a question of impossibility. Most discussions of the effect of subsequent impossibility of performance …
Implied Condition Involving Impossibility Of Performance, Edson R. Sunderland
Implied Condition Involving Impossibility Of Performance, Edson R. Sunderland
Articles
Early in 1914 the defendants contracted to sell to the plaintiffs a quantity of Finland birch timber. The practice was to send the timber direct by sea from Finnish ports. Before any timber was delivered the war broke out and the presence of German warships in the Baltic made the direct shipment by water impossible. The contract contained no war, force majeure or suspension provision. Held, that the contract was not dissolved, and the defendants were liable for damages for non-delivery of the timber. Blackburn Robbin Co., Lim. v. Allen & Sons, Lim. (1918) 87 L. J. K. B. 1085. …
Contract Of Infant--Evidence, Competency Of Witness Under Survivorship Statute, Victor H. Lane
Contract Of Infant--Evidence, Competency Of Witness Under Survivorship Statute, Victor H. Lane
Articles
Two questions are presented by the case of Sigiaigo v. Signaigo, (Mo. 1918), 205 S. W. Rep. 23: First, the enforcibility of the contract of an infant, fully performed by her, to live with a man and his wife as their adopted child so long as they should live, in consideration that the infant should have all the property of the foster parents upon their death; and Second, the competency of the consenting mother of the infant to testify in support of the infant's claim.