Law Commons^™

From Coase To Cooter: The Criticisms To Pigou’S Ideas, Enrico Baffi

enrico baffi

The aim of this paper is at discovering the most profound divergences between Coase and Pigou. Coase is well known for his theorem, but in his article ”The Problem of social Cost” he wants to point all the convincing criticisms to Pigou way of reasoning or, it is probably more correct to say, to Pigou’s oral tradition. I have found at least four criticisms. The last one, that states that it is impossible to have a mechanism of internalization of all social costs , is probably the least appealing but that one that has the strongest roots. I have also …

Turning The Firm Into A School: Help Your Associates Learn To Draft Contracts – The Right Way, Charles C. Lewis

Charles C. Lewis

No abstract provided.

Taking Outcomes Seriously, Daphna Lewinsohn-Zamir

Daphna Lewinsohn-Zamir

The goal of economic efficiency is to promote best outcomes by maximizing the satisfaction of people’s preferences. Given the crucial role of outcomes in efficiency analysis, surprisingly little attention has been devoted to the question of what an outcome actually is. Law-and-economics scholars typically disregard this issue, implicitly adopting the narrowest possible definition of outcome, namely end-results in terms of wealth. Furthermore, no attempt has been made to examine the fundamental question of what notion of outcomes individuals actually embrace.

This Article aims to fill this void by presenting an experimental study of perceptions of outcomes, conducted with both laypersons …

Contracting In The Modern World, Enrico Baffi

enrico baffi

In this paper we try explore some of the basic features of mass contracting. In our opinion, there are basically four characteristics of mass contracting: the reduced negotiations, the dissemination of standard form contracts, the presence of abusive clauses, and the recapitulation of the contract and its execution in a single act of stipulation. a) The reduction in negotiations is the result first of all of the costs that this activity requires and of the costs required to manage personalised contracts; secondly, this reduction is the consequence of the greater advantage of mass-produced goods compared to personalised goods; ) The …

Standard Contract Clauses As Public Goods. A New Way Of Reasoning, Enrico Baffi

enrico baffi

The aim of this work is to show how it is possible to identify market failures other than those traditionally identified by lawyers and law and economics scholars to justify the mandatory provisions of contracts between professionals and consumers and the equally mandatory provisions governing the abuse of economic dependency. This is a new approach that can be extended to other provisions and appears to rest on fairly solid microeconomic foundations. There is no doubt, however, that many criticisms can be leveled against it. Very briefly, I shall argue that the production of clauses characterized by being rather vague, indeterminate …

Evaluating Contracts For Customized Litigation By The Norms Underlying Civil Procedure, Colter Paulson

Colter Paulson

Recent scholarship on the potential for contractual modifications of litigation procedure focuses on contractual theories of enforcement, with constraints supplied by public policy. But this approach ignores the fact that such contracts purport to bind a third-party, the court, that did not agree to change its procedures. Nor can contractual theories of enforcement fully account for the societal and institutional interests in existing procedures. These problems are resolved, however, when contractual procedures are seen primarily as procedures, rather than as contracts, and are evaluated in light of the norms underlying civil procedure.

These norms are found both in the explicit …

Public Goods And Contract Standard Clauses: A New Approach, Enrico Baffi

enrico baffi

The aim of this work is to show how it is possible to identify market failures other than those traditionally identified by lawyers and law and economics scholars to justify the mandatory provisions of contracts between professionals and consumers and the equally mandatory provisions governing the abuse of economic dependency. This is a new approach that can be extended to other provisions and appears to rest on fairly solid microeconomic foundations. There is no doubt, however, that many criticisms can be leveled against it. Very briefly, I shall argue that the production of clauses characterized by being rather vague, indeterminate …

Lo Que Usted Debe Saber Al Invertir En Una Franquicia En México, Rodolfo C. Rivas Rea Esq., Marco A. Vargas Iñiguez Esq.

Rodolfo C. Rivas

The authors provide a brief account of the increasing importance of franchises in the current economic environment. Furthermore, in this walkthrough the authors discuss the existing legal regime for franchises in Mexico and provide an analysis of the negotiating positions involved in successfully developing a franchise.//////////////////////////////////////////////////////////////////////Los autores proporcionan un breve estudio sobre la creciente importancia de las franquicias en el entorno económico actual. Además, los autores analizan el régimen jurídico vigente para las franquicias en México y ofrecen un análisis sobre las negociaciones necesarias para el desarrollo exitoso de una franquicia.

Is There A Duty To Negotiate In Good Faith?, Michael Philip Furmston

Michael Philip FURMSTON

One of the most interesting questions concerning modern contract lawyers is whether, and if so when, there may be a duty on parties to a contract to negotiate in good faith? This may seem an odd question for an English lawyer to raise, granted the refusal of the House of Lords in Walford v. Miles [1992] 2 A.C. 128 to recognise even the effectiveness of an agreement to negotiate in good faith but this case has not escaped cogent criticism (Neill (1992) 108 L.Q.R. 405) and it rests on an axiom (that this is a duty which cannot be enforced) …

The Good Faith Approach To Foreclosure Mediation: An Assessment Of Washington's Foreclosure Mediation Program, Scott P. Kennedy

Scott P. Kennedy

Since 2007, concerns over high home foreclosure rates have played a dominant role in U.S. economic news and policy, and several states have responded with bold statutory and regulatory innovations. In July of 2011, Washington State implemented one such innovation: the Foreclosure Fairness Act (FFA). It grants defaulting homeowners the right to initiate a mediation in which lenders must consider the alternatives to foreclosure in good faith. This article assesses the Washington model's potential to mitigate the forces frustrating foreclosure prevention. Despite the increasing viability of foreclosure's alternatives, national foreclosure rates remain high. Poor lender-borrower dialogue, a system of perverse …

Dysfunctional Contracts And The Laws And Practices That Enable Them: An Empirical Analysis, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

The main function of entering into a contract is for both parties to be bound through being exposed to negative consequences if they breach. A review of purchase agreement forms used by condominium developers in Chicago, Illinois discovered that 79% eliminate the negative consequences for sellers by providing for highly one-sided remedies wherein the buyer’s sole remedy in the event of the seller’s breach was the return of the buyer’s own earnest money while reserving significant remedies to the developer in the event of the buyer’s default. Courts in many jurisdictions have refused to strike down this type of limitation …

Impracticability As A Defense To Contract Enforcement, Richard S. Wirtz

Richard S. Wirtz

No abstract provided.

Allocation Of Fault In Contract Law, Avi Weiss, Osnat Jacobi

Avi Weiss

In this paper we consider situations in which the parties are in disagreement about the allocation of a certain risk, and either party could have acted ex-ante to prevent breach, to lower its probability or to insure against it (“least-cost avoidance” in tort law), but neither did so. When the state-of-the-world is revealed there remain steps the parties can take to prevent breach or mitigate damages. We consider strict liability and other regimes such as negligence and comparative fault, and show that the first-best solution is not achieved in those regimes because they incentivize the parties to consult the court …

Adr's Place In Foreclosure: Remedying The Flaws Of A Securitized Housing Market, Lydia Nussbaum

Lydia R. Nussbaum

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid unnecessary foreclosures than others. This article comprehensively examines the key …

The Dog That Didn't Bark: Private Investment Funds And Relational Contracts In The Wake Of The Great Recession, Robert Illig

Robert C Illig

In the aftermath of the subprime mortgage crisis, the contract rights of numerous hedge funds and venture capital funds were breached. These contracts were complex and sophisticated and had been negotiated at great time and expense. Yet despite all of the assumptions of neo-classical contracts theory, nothing happened. Practically none of these injured parties sued to enforce their rights. Professor Illig uses this dearth of litigation to conduct a form of natural experiment as to the value of contract law. Discrete market participants contracted before the crash and then pursued their rights in court afterwards, while relational market participants contracted …

Towards Determining Legal Parentage By Agreement In Israel, Yehezkel Margalit

Hezi Margalit

In Israel as in other parts of the world, families, parenthood, and relations between parents and children have changed dramatically over the past few decades. So, too, developments in modern medicine have enhanced the ability to separate sexuality from fertility and parenthood. Many researchers feel that the legal system has not kept pace with these changes, and that traditional models of familial relationships no longer provide adequate tools for dealing with them. In order to bridge the gap between a desired social status and current law, a growing number of parents seek to regulate the status, rights, and obligations of …

Determining Legal Parenthood By Agreement As A Possible Solution To The Challenges Of The New Era, Yehezkel Margalit

Hezi Margalit

Over the past decades, we witnessed changes in the matrimonial and parenting institutions. Medical innovations have further created ethical-legal dilemmas. It is, therefore, essential to create a theory and framework that will determine ways to deal with the resulting dilemma in a fully developed manner. This paper surveys the current, conflicting shifts in family structure and the definition of legal parenthood. In it, I deal with the importance and various aspects of defining legal parenthood. I will also focus on the singularity of this dilemma as it is increasingly apparent in the various fertility treatments. I present the sociological-legal roots …

Pacta Sunt Servanda -- Or Not, Richard S. Wirtz

Richard S. Wirtz

Abstract Two of the important defenses to the enforcement of contracts are impracticability and frustration of purpose. In the American law of contracts, the general rule is that the promisor bears the risk that the contract may become more burdensome or less desirable to her, as a result of changes in circumstances for which she did not plan. In traditional terms, pacta sunt servanda: contracts are to be performed, come what may. The theory underlying the two defenses is that when an extraordinary circumstance renders a promised performance so vitally different from what was to be expected that it changes …

A Contractarian Critique Of Citizens United, Joseph F. Morrissey

Joseph F. Morrissey

Abstract

In Citizens United v. Federal Election Commission, a 5–4 majority overturned a congressional enactment limiting corporate electioneering. Decided in 2010, the Citizens United opinion has already been harshly criticized by a broad spectrum of people, ranging from President Obama to Ben & Jerry. A group of senators has even called for a constitutional amendment to undo the results of that decision.

In this article, I criticize the majority opinion in Citizens United for ignoring the prevailing contractarian view of a corporation. In so doing, the majority arrived at the false conclusion that corporations should be entitled to the constitutional …

Forum Shopping And The Cost Of Access To Justice: Cost And Certainty In International Commercial Litigation And Arbitration, Ali Assareh

Ali Assareh

International commercial transactions sometimes give rise to disputes. Resolving these disputes requires access to justice (whether through litigation or arbitration), and access to justice costs money⎯in some cases, enough money to overshadow the substance of the underlying dispute. Knowing this, international commercial parties almost always include a “dispute resolution” clause in their contracts. Yet, despite their prevalence and importance in managing future arbitration and litigation costs, dispute resolution clauses are often poorly negotiated and hastily drafted, perhaps because some factors that affect the cost of resolving future disputes are not known by the parties ex ante. But, while some factors …

Pluralism And Perfectionism In Private Law, Hanoch Dagan

Hanoch Dagan

Many private law scholars strive to divine broad unified normative theories of property, contracts, torts, and restitution (or, at times, even of private law as a whole). These monist accounts suggest that one regulative principle guides the various doctrines of these complex legal fields or that, even if more than one value shapes a given field, there is one particular balance of such values that guides the entire terrain. Notwithstanding the intuitive appeal of such structural monism, this Essay calls for a pluralist turn in private law theory and argues that a structurally pluralist and moderately perfectionist understanding provides a …

Embryo Disposition Agreements: The Effect Of Personal Autonomy, Constitutional Rights, And Public Policy On Enforceability, Damages, And Remedies, Nicholas Seger

Nicholas D. Seger

No abstract provided.

Making Non-Competes Unenforceable, Viva R. Moffat

Viva R. Moffat

The law of employee non-competition agreements is a mess. Differing standards, unpredictability, and uncertainty within and between jurisdictions is the norm. The variability in state law provides a significant incentive on both sides to forum shop when a dispute over a non-compete arises. This forum shopping leads to conflicts of law, and choice of law doctrine does not resolve these disputes in a satisfactory way. Because non-compete law is often a matter of fundamental public policy, the use of escape valves from the operation of conflicts principles means that there is no predictability or certainty in non-compete litigation. The search …

Classical Contract Law, Past And Present, Anat Rosenberg

Anat Rosenberg

This paper synthesizes and refocuses a wide range of histories of nineteenth-century contract law. It uncovers an inadvertent consensus among historians: despite significant controversies engaging rival historical schools of contract law, it is almost universally agreed that nineteenth-century law embodied an elaborate version of individualism; that the alternatives to its individualism were status and collectivism — but they functioned as external critiques and so left contract's conceptual link with individualism intact; and that the individualism grounded in contract law was in keeping with broad cultural mores. The consensus effectively entrenches a questionable historical artifact: the idea of a single meaning …

Non-Recourse Mortages – A Fresh Start, Ron Harris, Asher Meir

Ron Harris

In about a quarter of US states, all residential mortgages are essentially non-recourse, meaning that in case of default, the lender can only repossess the house but cannot collect on the private assets and future income of the borrower. This American innovation is now beginning to attract extensive interest abroad, but ironically in the US itself is getting a bad name. The law has been blamed for exacerbating the financial crisis, while stricken homeowners who take advantage of it have been scolded by lenders and even by the Secretary of the Treasury. We propose a fresh and more balanced look …

Constructing Access Through Exclusion. The Effect Of Individual And Collective Patent Ownership And Licensing On Openness In Human Genomic Science, Geertrui R.L. Van Overwalle

Geertrui R.L. Van Overwalle

Human genomic science and intellectual property are often considered to be at odds. The present paper is an attempt to analyse the current problems in gene patenting through the lens of individual, multiple and collaborative ownership. The objective of the present chapter is to systematize the relation between modes of ownership, modes of licensing and their effect on access.

Individual and multiple ownership have different effects. Individual ownership may result in blocking patent positions and multiple ownership may lead to hindering patent thickets. Both phenomena frustrate follow-on innovation. The effect of individual and multiple ownership, blocking patents and patent thickets …

Consenting Under Stress, Hila Keren

Hila Keren

This Article highlights a disturbing gap between what is currently known about stress across a range of disciplines and the way stress is treated at law. It does so by focusing on parties who seek relief from harmful contracts, on the grounds that they consented under stress. The Article first exposes the leading legal view that stress is merely a subjective feeling and therefore merits no legal recognition. It then provides a pragmatic synthesis of the rich study of stress, in order to counter that misguided legal presumption and to offer a better understanding of the physical, social and psychological …

To Be Or Not To Be (A Parent)? – Not Precisely The Question; The Frozen Embryo Dispute, Yehezkel Margalit

Hezi Margalit

Modern medicine offers a variety of fertility treatments, with the result that in the United States alone, there are more than 400,000 frozen embryos and another 10,000 are frozen every year. Since the rate of divorce in the United States increases exponentially, one can easily imagine how many frozen embryos could become open to litigation. Indeed, the media, the law and the people concerned with the ethical aspects have devoted much attention to this issue. This is because litigation forces the reassessment of many complex issues starting with the appropriate balance between an individual’s legal right to be and not …

The Story Of Ymps ("Yield Maintenance Premiums") In Bankruptcy, Ingrid Michelsen Hillinger, Michael G. Hillinger

Ingrid Michelsen Hillinger

No abstract provided.

Regulating Opt Out: An Economic Theory Of Altering Rules, Ian Ayres

Ian Ayres

Whenever a rule is contractible, the law must establish separate rules governing how private parties can contract around the default legal treatment. To date, contract theorists have not developed satisfying theories for how optimally to set “altering rules,” the rules that set out the necessary and sufficient conditions for displacing a default. This Article argues that efficiency-minded lawmakers in setting altering rules should consider both the costs of altering and the costs of various kinds of error. There are two broad reasons for altering rules to deviate from attempts to minimize the transaction cost of altering, First, the Article develops …