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Full-Text Articles in Law

Libor Phaseout: Litigation Is Coming, John Michael Neubert Feb 2021

Libor Phaseout: Litigation Is Coming, John Michael Neubert

Michigan Business & Entrepreneurial Law Review

This paper will explore the different steps market participants should take to make sure they are prepared when LIBOR is phased out in December 2021. Part I will focus on the actions market participants should do before going into negotiations that can increase their potential to reach a consensual agreement. Part II will explore what financial firms should be prepared for during the negotiation process and what claims may arise when no agreement is reached. The decision for how to handle any LIBOR-linked financial instrument in their portfolio should be left to the discretion of market participants themselves. This paper ...


Arbitration Waiver And Prejudice, Timothy Leake Nov 2020

Arbitration Waiver And Prejudice, Timothy Leake

Michigan Law Review

Arbitration agreements are common in commercial and consumer contracts. But two parties can litigate an arbitrable dispute in court if neither party seeks arbitration. That presents a problem if one party changes its mind and invokes its arbitration rights months or years after the lawsuit was filed and substantial litigation activity has taken place. Federal and state courts agree that a party can waive its arbitration rights by engaging in sufficient litigation activity without seeking arbitration, but they take different approaches to deciding how much litigation is too much. Two basic methods exist. Some courts say waiver requires the party ...


Designing And Enforcing Preliminary Agreements, Albert H. Choi, George Triantis Feb 2020

Designing And Enforcing Preliminary Agreements, Albert H. Choi, George Triantis

Articles

Preliminary agreements—variously labeled as memoranda of understanding, letters of intent, term sheets, commitment letters, or agreements in principle—are common in complex business transactions. They document an incomplete set of terms that the parties have agreed upon, while anticipating further negotiation of the remaining provisions. They often create legal obligations, particularly a duty to negotiate in good faith. This duty has been the subject of a substantial number of judicial opinions over the past few decades and yet continues to be regarded as a confusing and unpredictable issue in contract law. Legal scholarship is hamstrung in its analysis of ...


Identifying Fundamental Breach Of Articles 25 And 49 Of The Cisg: The Good Faith Duty Of Collaborative Efforts To Cure Defects - Make The Parties Draw A Line In The Sand Of Substantiality, Yasutoshi Ishida Jan 2020

Identifying Fundamental Breach Of Articles 25 And 49 Of The Cisg: The Good Faith Duty Of Collaborative Efforts To Cure Defects - Make The Parties Draw A Line In The Sand Of Substantiality, Yasutoshi Ishida

Michigan Journal of International Law

Article 49(1) of the CISG allows buyers of international goods to avoid their sales contracts “if the failure by the seller to perform . . . amounts to a fundamental breach.” A breach is “fundamental,” as defined by CISG article 25, when it causes the buyer such detriment “as substantially to deprive him of what he is entitled to expect under the contract.” This definition is followed by the so-called “foreseeability test,” an “unless” clause that excepts the situation where “the party in breach did not foresee[,] and a reasonable person of the same kind in the same circumstances would not have ...


The Use Of Soft Law In The Creation Of Legal Norms In International Commercial Law: How Successful Has It Been?, Henry Deeb Gabriel May 2019

The Use Of Soft Law In The Creation Of Legal Norms In International Commercial Law: How Successful Has It Been?, Henry Deeb Gabriel

Michigan Journal of International Law

In this Article, I examine several interrelated points. After defining soft law in Part II, I briefly set out some of the assumed advantages soft law instruments may have over legislation and regulations in Part III. In Part IV, I examine why some soft law instruments in international commercial law have been successful in creating international legal norms. In this Part, I specifically examine the UNIDROIT Principles of International Commercial Contracts to show how one might gauge success by looking beyond the express purpose of the instrument. I also compare the UNIDROIT Principles of Commercial Contracts with the American Law ...


Moral Diversity And Efficient Breach, Matthew A. Seligman Mar 2019

Moral Diversity And Efficient Breach, Matthew A. Seligman

Michigan Law Review

Most people think it is morally wrong to breach a contract. But sophisticated commercial parties, like large corporations, have no objection to breaching contracts and paying the price in damages when doing so is in their self-interest. The literature has ignored the profound legal, economic, and normative implications of that asymmetry between individuals’ and firms’ approaches to breach. To individuals, a contract is a promise that cannot be broken regardless of the financial stakes. For example, millions of homeowners refused to breach their mortgage contracts in the aftermath of the housing crisis even though doing so could have saved them ...


The Best Of Times And The Worst Of Times: The Current Landscape Of Mandatory Arbitration Clause Enforcement In Domestic Arbitration, Virginia Neisler Feb 2019

The Best Of Times And The Worst Of Times: The Current Landscape Of Mandatory Arbitration Clause Enforcement In Domestic Arbitration, Virginia Neisler

Law Librarian Scholarship

There is nothing new about arbi­tration, a method of alternative dispute resolution designed to settle disputes more efficiently, cheaper, and faster than litigation. Today, mandatory arbitration clauses are ubiquitous in commercial contracts, social media terms and conditions, employment contracts, and more. These contracts, where one party in the weaker position (often a consumer or an employee) must either accept or reject the terms as written with no power to negotiate, are known as contracts of adhesion. The widespread use of arbitration clauses—specifically, pre­dispute, forced arbitration agreements, often including class­action waiv ers found in adhesion contracts—has ...


Creative Commons: An Explainer, Kincaid C. Brown Jan 2018

Creative Commons: An Explainer, Kincaid C. Brown

Law Librarian Scholarship

Copyright protection attaches automatically to original works you create, whether a poem, photograph, painting, song, video, or essay. Copyright limits what others can do with your creative work and protects your original work from, for example, being compiled or reused and sold for profit. If you hold the copyright—and didn’t, say, create the original work in an employment context where it may be subject to being a work for hire—you may want to allow others to use your work for particular purposes. You could individually negotiate a license granting rights to each person, which would undoubtedly take ...


Creative Commons: An Explainer, Kincaid C. Brown Jan 2018

Creative Commons: An Explainer, Kincaid C. Brown

Law Librarian Scholarship

Copyright protection attaches automatically to original works you create, whether a poem, photograph, painting, song, video, or essay. Copyright limits what others can do with your creative work and protects your original work from, for example, being compiled or reused and sold for profit. If you hold the copyright—and didn’t, say, create the original work in an employment context where it may be subject to being a work for hire—you may want to allow others to use your work for particular purposes. You could individually negotiate a license granting rights to each person, which would undoubtedly take ...


Understanding The Consumer Review Fairness Act Of 2016, Eric Goldman Nov 2017

Understanding The Consumer Review Fairness Act Of 2016, Eric Goldman

Michigan Telecommunications & Technology Law Review

Consumer reviews are vitally important to our modern economy. Markets become stronger and more efficient when consumers share their marketplace experiences and guide other consumers toward the best vendors and away from poor ones. Businesses recognize the importance of consumer reviews, and many businesses take numerous steps to manage how consumer reviews affect their public image. Unfortunately, in a misguided effort to control consumer reviews, some businesses have deployed contract provisions that ban or inhibit their consumers from reviewing them. I call those provisions “antireview clauses.”

Anti-review clauses distort the marketplace benefits society gets from consumer reviews by suppressing peer ...


Contracts Ex Machina, Kevin Werbach, Nicolas Cornell Nov 2017

Contracts Ex Machina, Kevin Werbach, Nicolas Cornell

Articles

Smart contracts are self-executing digital transactions using decentralized cryptographic mechanisms for enforcement. They were theorized more than twenty years ago, but the recent development of Bitcoin and blockchain technologies has rekindled excitement about their potential among technologists and industry. Startup companies and major enterprises alike are now developing smart contract solutions for an array of markets, purporting to offer a digital bypass around traditional contract law. For legal scholars, smart contracts pose a significant question: Do smart contracts offer a superior solution to the problems that contract law addresses? In this article, we aim to understand both the potential and ...


Contracting Out Of The Fiduciary Duty Of Loyalty: An Empirical Analysis Of Corporate Opportunity Waivers, Gabriel Rauterberg, Eric Talley Jun 2017

Contracting Out Of The Fiduciary Duty Of Loyalty: An Empirical Analysis Of Corporate Opportunity Waivers, Gabriel Rauterberg, Eric Talley

Articles

For centuries, the duty of loyalty has been the hallowed centerpiece of fiduciary obligation, widely considered one of the few “mandatory” rules of corporate law. That view, however, is no longer true. Beginning in 2000, Delaware dramatically departed from tradition by granting incorporated entities a statutory right to waive a crucial part of the duty of loyalty: the corporate opportunities doctrine. Other states have since followed Delaware’s lead, similarly permitting firms to execute “corporate opportunity waivers.” Surprisingly, more than fifteen years into this reform experiment, no study has attempted to either systematically measure the corporate response to these reforms ...


The Deformation Of Contract In The Information Society, Margaret Jane Radin Feb 2017

The Deformation Of Contract In The Information Society, Margaret Jane Radin

Law & Economics Working Papers

The HLA Hart Memorial Lecture delivered at Oxford on May 24, 2016. The Lecture considers how the advent and growth of the information society is posing challenges for the traditional theories of contract, and for the duties of the State with regard to contractual ordering. In particular, the Lecture considers the lack of ‘fit’ between certain prevalent uses of contract and the underlying justification for contract enforcement.


Review Of The Choice Theory Of Contracts, Nicolas Cornell Jan 2017

Review Of The Choice Theory Of Contracts, Nicolas Cornell

Reviews

This book aims to provide a new approach to thinking about the role of contract law in a liberal state. The fundamental idea is that the law should affirmatively facilitate citizens' autonomy by creating and sustaining various different types of contractual relationships so that citizens have the option to choose among them. The authors start from the idea that "bargaining for terms is not the dominant mode of contracting . . . the mainstay of present-day contracting is the choice among types" (2-3). We choose to relate as employees or independent contractors, married or just cohabiting, merchants selling goods or private individuals selling ...


Consumer Preferences For Performance Defaults, Franklin G. Snyder, Ann M. Mirabito Oct 2016

Consumer Preferences For Performance Defaults, Franklin G. Snyder, Ann M. Mirabito

Michigan Business & Entrepreneurial Law Review

Commercial law in the United States is designed to facilitate private transactions, and thus to enforce the presumed intent of the parties, who generally are free to negotiate the terms they choose. But these contracts inevitably have gaps, both because the parties cannot anticipate every situation that might arise from their relationship, and because negotiation is not costless. When courts are faced with these gaps in a litigation context, they supply default terms to fill them. These defaults usually are set to reflect what courts believe similar parties would have agreed to if they had addressed the issue. These “majoritarian ...


Patent Privateers And Antitrust Fears, Matthew Sipe Jul 2016

Patent Privateers And Antitrust Fears, Matthew Sipe

Michigan Telecommunications & Technology Law Review

Patent trolls are categorically demonized as threatening American innovation and industry. But whether they are a threat that antitrust law is equipped to deal with is a complex question that depends on the particular type of patent troll and activities they engage in. This Article looks specifically at privateer patent trolls: entities that acquire their patents from operating entities and assert them against other industry members. In the particular context of privateering, antitrust law is almost certainly not the proper legal solution. Privateering does raise significant issues: circumventing litigation constraints, evading licensing obligations, and raising the cost and frequency of ...


A Complainant-Oriented Approach To Unconscionability And Contract Law, Nicholas Cornell Jun 2016

A Complainant-Oriented Approach To Unconscionability And Contract Law, Nicholas Cornell

Articles

This Article draws attention to a conceptual point that has been overlooked in recent discussions about the theoretical foundations of contract law. I argue that, rather than enforcing the obligations of promises, contract law concerns complaints against promissory wrongs. This conceptual distinction is easy to miss. If one assumes that complaints arise whenever an obligation has been violated, then the distinction does not seem meaningful. I show, however, that an obligation can be breached without giving rise to a valid complaint. This Article illustrates the importance of this conceptual distinction by focusing first on the doctrine of substantive unconscionability. I ...


Three Problems (And Two Solutions) In The Law Of Partnership Formation, Shawn Bayern Apr 2016

Three Problems (And Two Solutions) In The Law Of Partnership Formation, Shawn Bayern

University of Michigan Journal of Law Reform

This Article considers several foundational questions concerning the formation of general partnerships, a topic that has received little modern attention and that is governed largely by classical axioms rather than adaptive modern considerations. Its three main topics concern (1) the timing of partnership formation, (2) the aggregation of multiple distinct questions under the single heading of “partnership formation,” and (3) the rarely challenged proposition that general partners ought to be liable for partnership obligations, a doctrine that is surprisingly at odds with the rest of modern business-entity law.


Understanding Noncompetition Agreements: The 2014 Noncompete Survey Project, J. J. Prescott, Norman D. Bishara, Evan Starr Apr 2016

Understanding Noncompetition Agreements: The 2014 Noncompete Survey Project, J. J. Prescott, Norman D. Bishara, Evan Starr

Articles

In recent years, scholars and policymakers have devoted considerable attention to the potential consequences of employment noncompetition agreements and to whether legislatures ought to reform the laws that govern the enforcement of these controversial contractual provisions. Unfortunately, much of this interest—and the content of proposed reforms—derives from anecdotal tales of burdensome noncompetes among low-wage workers and from scholarship that is either limited to slivers of the population (across all studies, less than 1%) or relies on strong assumptions about the incidence of noncompetition agreements. Better understanding of the use of noncompetes and effective noncompetition law reform requires a ...


Property, Duress, And Consensual Relationships, David Blankfein-Tabachnick Apr 2016

Property, Duress, And Consensual Relationships, David Blankfein-Tabachnick

Michigan Law Review

Professor Seana Valentine Shiffrin has produced an exciting new book, Speech Matters: On Lying, Morality, and the Law. Shiffrin’s previous rigorous, careful, and morally sensitive work spans contract law, intellectual property, and the freedoms of association and expression. Speech Matters is in line with Shiffrin’s signature move: we ought to reform our social practices and legal and political institutions to, in various ways, address or accommodate moral values—here, a stringent moral prohibition against lying, a strident principle of promissory fidelity, that is, the principle that one ought to keep one’s promises, and the general value of ...


Protecting Personal Information: Achieving A Balance Between User Privacy And Behavioral Targeting, Patrick Myers Jan 2016

Protecting Personal Information: Achieving A Balance Between User Privacy And Behavioral Targeting, Patrick Myers

University of Michigan Journal of Law Reform

Websites and mobile applications provide immeasurable benefits to both users and companies. These services often collect vast amounts of personal information from the individuals that use them, including sensitive details such as Social Security numbers, credit card information, and physical location. Personal data collection and dissemination leave users vulnerable to various threats that arise from the invasion of their privacy, particularly because users are often ignorant of the existence or extent of these practices. Current privacy law does not provide users with adequate protection from the risks attendant to the collection and dissemination of their personal information. This Note advocates ...


Contracts, Persons And Property: A Tribute To Margaret Jane Radin, Ruth L. Okediji Oct 2015

Contracts, Persons And Property: A Tribute To Margaret Jane Radin, Ruth L. Okediji

Michigan Telecommunications & Technology Law Review

In 2011, the United States was only just beginning to emerge from what some claimed to be the most significant economic crisis since the Great Depression. The devastation wrought by unregulated subprime mortgages unfolded as a political, legal, financial and social tragedy. Millions of homeowners had purchased homes for amounts they most certainly could not afford, with terms and conditions written on documents they even more certainly had never read. Many of those most severely affected were, as one might expect, racial minorities and underrepresented groups, but plenty of other members of society were also caught in the intricately woven ...


Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr Oct 2015

Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr

Articles

Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts—for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute ...


With Marriage On The Decline And Cohabitation On The Rise, What About Marital Rights For Unmarried Partners?, Lawrence W. Waggoner Oct 2015

With Marriage On The Decline And Cohabitation On The Rise, What About Marital Rights For Unmarried Partners?, Lawrence W. Waggoner

Articles

This article draws attention to a cultural shift in the formation of families that has been and is taking place in this country and in the developed world. Part I uses recent government data to trace the decline of marriage and the rise of cohabitation in the United States. Between 2000 and 2010, the population grew by 9.71 %, but the husband and wife households only grew by 3.7%, while the unmarried couple households grew by 41.4%. A counter-intuitive finding is that the early 21st century data show little correlation between the marriage rate and economic conditions. Because ...


Out Of Sight, Out Of Mind: Hidden Disclaimers And Ucc § 2-316’S Conspicuousness Requirement, Gavin Thole Sep 2015

Out Of Sight, Out Of Mind: Hidden Disclaimers And Ucc § 2-316’S Conspicuousness Requirement, Gavin Thole

University of Michigan Journal of Law Reform Caveat

Money now, terms later” agreements, or rolling contracts, are commonplace in consumer transactions. Courts frequently allow these agreements to stand. But problems arise when product manufacturers disclaim a warranty that protects consumers, such as the implied warranty of merchantability, without disclosing the disclaimer upfront—effectively rendering the warranty useless. Suppose, for example, a consumer purchases a refrigerator or computer where the implied warranty of merchantability disclaimer is printed on the last page of a thick instruction booklet. The booklet is hidden deep inside the box, buried in a morass of cords and paperwork. The consumer has no way of knowing ...


Constructive Ambiguity: Ip Licenses As A Case Study, Michal Shur-Ofry, Ofer Tur-Sinai Feb 2015

Constructive Ambiguity: Ip Licenses As A Case Study, Michal Shur-Ofry, Ofer Tur-Sinai

University of Michigan Journal of Law Reform

Ambiguity in contracts is often perceived as undesirable. A certain level of ambiguity, however, can have significant virtues: reducing transaction costs associated with foreseeing and negotiating remote contingencies; facilitating the closing of efficient transactions that would not otherwise close; increasing the adaptability and “anti-fragility” of contracts in the face of unforeseen developments; and preserving trust between the parties. Some contracts are more likely to benefit from a certain degree of ambiguity. Relying on multi-disciplinary literature, this Article systematically analyzes ambiguity’s merits and identifies three principal features of transactions that are positively correlated to the virtues of ambiguity: (1) long ...


Implementing Symmetric Treatment Of Financial Contracts In Bankruptcy And Bank Resolution, E. J. Janger, John A.E. Pottow Jan 2015

Implementing Symmetric Treatment Of Financial Contracts In Bankruptcy And Bank Resolution, E. J. Janger, John A.E. Pottow

Articles

Financial contracts come in many forms and serve many functions in both the financial system and the broader economy. Repos secured by U.S. Treasury securities act as money substitutes and can play an important role as part of the money supply, while similarly structured repos, secured by more volatile collateral, may be used as speculative devices or hedges. Swaps can be used to insure against various types of market risk, from interest rates to oil prices, or they can operate as vehicles for highly leveraged investments. The parties to these instruments are sometimes major financial institutions and, other times ...


Less Than I Wanted To Know: Why Do Ben-Shahar And Schneider Attack Only 'Mandated' Disclosure?, Margaret Jane Radin May 2014

Less Than I Wanted To Know: Why Do Ben-Shahar And Schneider Attack Only 'Mandated' Disclosure?, Margaret Jane Radin

Law & Economics Working Papers

This essay responds to a new book by Omri Ben Shahar and Carl E. Schneider, entitled MORE THAN YOU WANTED TO KNOW: THE FAILURE OF MANDATED DISCLOSURE (Princeton, 2014). The book is an elaborate disclosure of why disclosure fails. It is hard to disagree with the fact that widespread deficits in consumer reading, understanding and decisionmaking undermine the efficacy of disclosures, and the book provides plenty of data to show this. But the authors do not much confront the fact that many mandates for disclosures are a response to what happens when firms are free to design their own fine ...


Regulation Through Boilerplate: An Apologia, Omri Ben-Shahar Apr 2014

Regulation Through Boilerplate: An Apologia, Omri Ben-Shahar

Michigan Law Review

You have to salute Peggy Radin. She has said what others who agree with her have for so long been hesitant to utter out loud: the fine print is not a contract. There is no agreement to it, no real consent, not even “blanket assent.” It is nothing but paperwork and should have the legal fortune of junk mail. Those lengthy, unreadable pages with terms and conditions that come prepacked with consumer products or that demand to be clicked (“We Accept”) on computer screens — does anyone really think that they contain arrangements that people knowingly agreed to? How is it ...


Rationality's Reach, Adam B. Badawi Apr 2014

Rationality's Reach, Adam B. Badawi

Michigan Law Review

Economic analysis and the rational actor model have dominated contracts scholarship for at least a generation. In the past fifteen years or so, however, a group of behaviorists has challenged the ability of the rational choice model to account for consumer behavior. These behaviorists are not trying to dismantle the entire enterprise. They generally accept the fundamentals of economic analysis but argue that the rational actor model can be improved by incorporating evidence of decisionmaking flaws that people exhibit. Oren Bar-Gill has been one of the foremost and influential proponents of a behaviorist take on contracts, and his recent book ...