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On The Stickiness Of Default Rules, Omri Ben-Shahar, John A. E. Pottow
On The Stickiness Of Default Rules, Omri Ben-Shahar, John A. E. Pottow
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It was once perceived, and still is commonly taught, that default rules in contract law must mimic efficient arrangements. Otherwise, these rules impose needless transaction costs upon parties who seek to opt out of them to reach more efficient positions. In settings where these costs are high, parties might find themselves "stuck" in a default, unable to reach the outcome that they prefer. The strong version of this account-that the only factor that can make an inefficient default rule stick is the direct cost of drafting a tailored provision-has been gradually reappraised. It is by now recognized that factors beyond …
Contracts Without Consent: Exploring A New Basis For Contractual Liability, Omri Ben-Shahar
Contracts Without Consent: Exploring A New Basis For Contractual Liability, Omri Ben-Shahar
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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 …