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University of Michigan Law School

2004

Contracts

Articles 1 - 12 of 12

Full-Text Articles in Law

An Ex-Ante View Of The Battle Of The Forms: Inducing Parties To Draft Reasonable Terms, Omri Ben-Shahar Oct 2004

An Ex-Ante View Of The Battle Of The Forms: Inducing Parties To Draft Reasonable Terms, Omri Ben-Shahar

Law & Economics Working Papers Archive: 2003-2009

This paper focuses on one type of ex-ante effect of the battle of the forms: the incentive to draft reasonable boilerplate terms. It argues that the experience with the battle-of-the-forms rule under the CISG reinforces what we already know, that existing legal solutions do not provide any incentive for the parties to draft reasonable forms. The paper suggests that the goal of inducing parties to draft reasonable terms can be significantly promoted by a third rule, a variant of the “best-shot” rule proposed by Victor Goldberg. Under the version labeled the “reasonable-shot” rule, the court would resolve the battle of …

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Why Don't Doctors & Lawyers (Strangers In The Night) Get Their Act Together?, Frances H. Miller May 2004

Why Don't Doctors & Lawyers (Strangers In The Night) Get Their Act Together?, Frances H. Miller

Michigan Law Review

Health care in America is an expensive, complicated, inefficient, tangled mess - everybody says so. Patients decry its complexity, health care executives bemoan its lack of coherence, physicians plead for universal coverage to simplify their lives so they can just get on with taking care of patients, and everyone complains about health care costs. The best health care in the world is theoretically available here, but we deliver and pay for it in some of the world's worst ways. Occam's razor ("Among competing hypotheses, favor the simplest one") is of little help here. There are no simple hypotheses - everything …

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The Responsible Thing To Do About "Responsible Party" Provisions In Nursing Home Agreements: A Proposal For Change On Three Fronts, Katherine C. Pearson Apr 2004

The Responsible Thing To Do About "Responsible Party" Provisions In Nursing Home Agreements: A Proposal For Change On Three Fronts, Katherine C. Pearson

University of Michigan Journal of Law Reform

Nursing homes routinely seek the signature of a family member on nursing home agreements, calling the signer a "responsible party" or sponsor for the resident. Federal Medicare and Medicaid law provides that participating facilities must "not require a third party guarantee of payment to the facility as a condition of admission ...to, or continued stay, in the facility. "Nonetheless, if federal benefits prove to be unavailable, courts are holding responsible parties contractually liable for thousands of dollars for the care of their elders. This Article proposes private and public responses to the increasing likelihood that nursing homes will seek collection …

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Credible Coercion, Oren Bar-Gill, Omri Ben-Shahar Mar 2004

Credible Coercion, Oren Bar-Gill, Omri Ben-Shahar

Law & Economics Working Papers Archive: 2003-2009

The ideal of individual liberty and autonomy requires that society provide relief against coercion. In the law, this requirement is often translated into rules that operate “post-coercion” to undo the legal consequences of acts and promises extracted under duress. This Article argues that these ex-post anti-duress measures, rather than helping the coerced party, might in fact hurt her. When coercion is credible—when a credible threat to inflict an even worse outcome underlies the surrender of the coerced party—ex post relief will only induce the strong party to execute the threatened outcome, to the detriment of the coerced party. Anti-duress relief …

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"Agreeing To Disagree": Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar Jan 2004

"Agreeing To Disagree": Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar

Law & Economics Working Papers Archive: 2003-2009

This Article develops a new standard for gap filling in incomplete contracts. It focuses on an important class of situations in which parties leave their agreement deliberately incomplete, with the intent to further negotiate and resolve the remaining issues. In these situations, neither the traditional no-enforcement result nor the usual gap filling approaches accord with the parties’ partial consent. Instead, the Article develops the concept of pro-defendant gap-fillers, under which each party is granted an option to enforce the transaction supplemented with terms most favorable (within reason) to the other party. A deliberately incomplete contract with pro-defendant gap fillers transforms …

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Threatening An Irrational Breach Of Contract, Oren Bar-Gill, Omri Ben-Shahar Jan 2004

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 …

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The Law Of Duress And The Economics Of Credible Threats, Oren Bar-Gill, Omri Ben-Shahar Jan 2004

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, …

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Contracting Under Amended 2-207 (Freedom From Contract Symposium), James J. White Jan 2004

Contracting Under Amended 2-207 (Freedom From Contract Symposium), James J. White

Articles

Amended Section 2-207 of the Uniform Commercial Code1 (the Code) states new contract rules. I call these "contract rules" to avoid the labels of contract formation and contract interpretation. These new rules cure many of the problems presented by current Section 2-2072 and remind courts that the purpose of Section 2-207 is to interpret a contract that has been made, not to see if a contract exists. One is tempted to label current Section 2-207 as a contract formation provision-and to some extent that would be right-but most of this Section's work has been in contract interpretation, not in contract …

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Mutual Assent Versus Gradual Ascent: The Debate Over The Right To Retract, Omri Ben-Shahar Jan 2004

Mutual Assent Versus Gradual Ascent: The Debate Over The Right To Retract, Omri Ben-Shahar

Articles

I ended Contracts Without Consent: Exploring a New Basis for Contract Liability with a reminder that the analysis was "lacking in rigor and in nuance" and that "[i]t remains for future work to explore the extent to which the approach developed. . . has the horsepower to resolve pragmatically the problems that have proven difficult for current doctrine and to examine whether these solutions advance the various social objectives associated with contract formation." Such "future work" arrived sooner than I expected. I have now had the privilege to read the three commentaries that the University of Pennsylvania Law Review solicited, …

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Contracts Without Consent: Exploring A New Basis For Contractual Liability, Omri Ben-Shahar Jan 2004

Contracts Without Consent: Exploring A New Basis For Contractual Liability, Omri Ben-Shahar

Articles

This Essay explores an alternative to one of the pillars of contract law, that obligations arise only when there is "mutual assent "--when the parties reach consensus over the terms of the transaction. It explores a principle of "no-retraction," under which each party is obligated to terms it manifested and can retract only with some liability. In contrast to the all-or-nothing nature of the mutual assent regime, where preliminary forms of consent are either full-blown contracts or create no obligation, under the no-retraction regime, obligations emerge gradually, as the positions of the negotiating parties draw closer. Further, the no-retraction liability …

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'Agreeing To Disagree': Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar Jan 2004

'Agreeing To Disagree': Filling Gaps In Deliberately Incomplete Contracts, Omri Ben-Shahar

Articles

Incomplete contracts have always been viewed as raising the following challenge for contract law: does the incompleteness-or, "indefiniteness," as it is usually called-rise to such a level that renders the agreement legally unenforceable? When the indefiniteness concerns important terms, it is presumed that the parties have not reached an agreement to which they intend to be bound. This "fundamental policy" is the upshot of the view that "contracts should be made by the parties, not by the courts."' When, in contrast, the indefiniteness concerns less important terms, courts supplement the agreement with gap fillers and enforce the supplemented contract.

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Forward [To Freedom From Contract Symposium], Omri Ben-Shahar Jan 2004

Forward [To Freedom From Contract Symposium], Omri Ben-Shahar

Articles

This Symposium explores freedom from contract. When I was preparing to travel from my home in Ann Arbor to the University of Wisconsin where this Symposium was to be held, my 9-year-old son asked where I was headed. I explained that a bunch of people and I were going to meet and talk about freedom from contract, but the boy seemed unsure what this exchange was going to be about. I tried to translate: "It is about making promises that you don't really have to keep." This sounded surprising to him. He raised an inquisitive brow, and I knew he …

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