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Full-Text Articles in Law

The "Branding Effect" Of Contracts, D. Gordon Smith Apr 2006

The "Branding Effect" Of Contracts, D. Gordon Smith

Faculty Scholarship

In his case study of the MasterCard IPO and its predecessor piece on the Google IPO, Victor Fleischer claims to find evidence of a branding effect of legal infrastructure. The branding effect is not aimed at reducing the potential for opportunism by a counterparty to a contract, but rather at increasing the attractiveness of a product to present and future users or improving the image of a company in the eyes of regulators, judges, and juries. In this essay commenting on Fleischer's work, I endorse the notion that deal structures have branding effects and position Fleischer's work within ...


The Return Of Bargain: An Economic Theory Of How Standard Form Contracts Negotiation Between Businesses And Consumers, Jason S. Johnston Mar 2006

The Return Of Bargain: An Economic Theory Of How Standard Form Contracts Negotiation Between Businesses And Consumers, Jason S. Johnston

Faculty Scholarship at Penn Law

This paper analyzes standard form contracts between firms and individual consumers (and borrowers). It presents a mix of anecdotal and empirical evidence from a large number of industries demonstrating a widespread pattern in which firms refrain from enforcing the typically clear bright line performance obligations that such standard form contracts set out (such as a consumer credit repayment terms, or a retail consumer's right to return goods). Instead, firms routinely give their supervisory employees the discretion to bargain around such terms. Within a simple and informal model, the paper explains such delegated, discretionary renegotiation as a means by which ...


Judicial Incorporation Of Trade Usages: A Functional Solution To The Opportunism Problem, Juliet P. Kostritsky Jan 2006

Judicial Incorporation Of Trade Usages: A Functional Solution To The Opportunism Problem, Juliet P. Kostritsky

Faculty Publications

Article 2 of the UCC directed courts to look to business norms as a primary means of interpreting contracts. Recently the new formalists have attacked this strategy of norm incorporation as a misguided one that will lead inevitably to significant error costs. Accordingly, they have embraced plain meaning as the preferred interpretive strategy. This article argues that the strategy of rejecting trade usages unless they are part of the express contract is too rigid. The rejection is premised on an overly narrow cost/benefit analysis that fails to account for the functional role that such usages may play in curbing ...