Law Commons^™

Arbitration's Summer Soldiers: An Empirical Study Of Arbitration Clauses In Consumer And Nonconsumer Contracts, Theodore Eisenberg, Geoffrey P. Miller, Emily Sherwin

Cornell Law Faculty Publications

We provide the first study of varying use of arbitration clauses across contracts within the same firms. Using a sample of 26 consumer contracts and 164 nonconsumer contracts from large public corporations, we compared arbitration clause use in consumer contracts with their use in the same firms' nonconsumer contracts. Over three-quarters of the consumer agreements provided for mandatory arbitration but less than 10% of the firms' material nonconsumer, nonemployment contracts included arbitration clauses. The absence of arbitration provisions in nearly all material contracts suggests that, ex ante, many firms value, even prefer, litigation over arbitration to resolve disputes with peers. …

Confronting Adr Agreements' Contract/No-Contract Conundrum With Good Faith, Amy J. Schmitz

Faculty Publications

This Article explores the intricate problem, or conundrum, of enforcing "Alternative Dispute Resolution ('ADR') agreements" that require mediation or other non-binding dispute resolution procedures. Although public policy supports ADR, courts' inadequate analysis of ADR agreements is threatening their vitality. Instead of properly considering the flexible nature of these agreements, courts assume formalist contract or no-contract conclusions similar to those they impose on what Professor Charles Knapp has termed "contracts to bargain." ADR agreements and other contracts to bargain pose enforcement problems because they require parties' cooperation without specifying what cooperation means or how to enforce such flexible duties. This Article …

Leases: Like Any Other Contract?, John V. Orth

Faculty Publications

No abstract provided.

"A Frequent Recurrence To Fundamental Principles": A Tribute To Jim Ely, John V. Orth

Faculty Publications

No abstract provided.

Litigation And The Optimal Combination Of Vague And Precise Clauses In Contracts, Alvaro E. Bustos

Faculty Working Papers

In this paper we determine the optimal combination of precise and vague clauses written in contracts when the parties face writing and enforcement costs, the second ones in the form of litigation. We show that the parties may prefer to write vague instead of precise clauses not only because they are cheaper to write but also because they are cheaper to enforce. We extend Battigalli and Maggi (2002) to model the decision of a principal who chooses clauses to describe the actions that an agent has to perform. As both players observe nature imperfectly they may call for a court …

Turned On Its Head?: Norms, Freedom, And Acceptable Terms In Internet Contracting, Richard Warner

All Faculty Scholarship

Is the Internet turning contract law on its head? Many commentators contend it is. Precisely this issue arises in current controversies over end user license agreements (EULAs) and Terms of Use agreements (TOUs, the agreements governing our use of web sites). Commentators complain that, in both cases, the formation process unduly restricts buyers’ freedom; and, that sellers and web site owners exploit the process to impose terms that deprive consumers of important intellectual property and privacy rights. The courts ignore the criticisms and routinely enforce EULAs and TOUs. There is truth on both sides of this court/commentator divide. EULAs and …

More Views From The Ivory Tower: The Kiss Principle - Keep It Simple, Solicitor, David Spratt

Articles in Law Reviews & Other Academic Journals

No abstract provided.

Fulfilling Lucy's Legacy: Recognizing Implicit Good-Faith Obligations Within Explicit Job Duties, Emily Gold Waldman

Elisabeth Haub School of Law Faculty Publications

Wood v. Lucy, Lady Duff-Gordon is often cited for the principle that every contract contains an implied covenant of good faith and fair dealing. Yet the very source of that decision--the New York Court of Appeals--has been emphatically unwilling to recognize an implied good-faith covenant in the context of employment relationships, given the judicial presumption of employment at will. This essay criticizes the New York Court of Appeals' conclusion that the implied covenant of good faith and fair dealing must yield to the presumption of employment at will, and advocates a more balanced approach.

Anti-Social Contracts: The Contractual Governance Of Virtual Worlds, Joshua A.T. Fairfield

Scholarly Articles

Virtual worlds have seized the imaginations of millions of people who now live, work, and play together in these new environments. But all is not well. These online communities are ruled nearly exclusively by contract law, through end-user licence agreements, terms of service, and codes of conduct. Contracts are a critical means of helping two (or a few) people negotiate their preferences. But online communities are made up of enormous and shifting populations that have no time or ability to negotiate agreements with every other community member. Relying on contracts alone thus threatens the investments and creativity that go into …

The Enduring Legacy Of Wood V. Lucy, Lady Duff-Gordon, James J. Fishman

Elisabeth Haub School of Law Faculty Publications

To mark the ninetieth anniversary of the decision, Pace University School of Law sponsored a Symposium, The Enduring Legacy of Wood v. Lucy, Lady Duff-Gordon, to reconsider the case and to appreciate the accomplishments of Lucy, Lady Duff-Gordon, who as Lucile, became one of the twentieth century's most innovative fashion designers. The Symposium brought together leading contracts scholars from as far away as Australia and England as well as experts on Lucile from the worlds of fashion, museums and fashion scholarship.

The Symposium examined legal issues raised by the decision through panels that focused upon: implication, interpretation and default terms; …

Contracting Out Of Process, Contracting Out Of Corporate Accountability: An Argument Against Enforcement Of Pre-Dispute Limits On Process, Meredith R. Miller

Scholarly Works

There have been many well-articulated and convincing critiques aimed at mandatory arbitration. Indeed, presently before Congress is proposed legislation titled the Arbitration Fairness Act, that would ban pre-dispute arbitration in the consumer, franchise and employment contexts. However, maligned as the plaintiff bar's pro-lawsuit legislation, the Arbitration Fairness Act is predicted to have very little chance of enactment. Consequently, across varying industries, the pre-dispute arbitration regime endures unheedingly. Thus, this Article sets aside the arguments aimed generally at pre-dispute arbitration clauses and, instead, sets its sights on some of the terms that seem to arise in such clauses. The focus here …

Coordinating In The Shadow Of The Law: Two Contextualized Tests Of The Focal Point Theory Of Legal Compliance, Richard H. Mcadams, Janice Nadler

Faculty Working Papers

In situations where people have an incentive to coordinate their behavior, law can provide a framework for understanding and predicting what others are likely to do. According to the focal point theory of expressive law, the law's articulation of a behavior can sometimes create self-fulfilling expectations that it will occur. Existing theories of legal compliance emphasize the effect of sanctions or legitimacy; we argue that, in addition to sanctions and legitimacy, law can also influence compliance simply by making one outcome salient. We tested this claim in two experiments where sanctions and legitimacy were held constant. Experiment 1 demonstrated that …

Contract Regulation, With And Without The State: Ruminations On Rules And Their Sources, David Snyder

Articles in Law Reviews & Other Academic Journals

This paper, commenting on the work of Jýrgen Basedow, addresses the legal regulation of economic relations in the context of globalization. The paper applies the idea of the mixed jurisdiction, traditionally focused on legal systems that partake of both the common law and the civil law, to the complex of privately made law and publicly made law that governs contemporary economic relations. Differing criteria that might be used to assess and choose between competing rules or competing systems of rule generation are evaluated, and normative considerations are raised. The paper proposes a model to demonstrate how privately made law, though …

What If Seeds Were Not Patentable?, Elizabeth I. Winston

Scholarly Articles

In 2001, the United States Supreme Court held that seeds were patentable subject matter - a decision, I assert, of much discussion and little impact. Protection of agricultural intellectual property through private ordering, used both to expand the protection available through public ordering and to circumvent the restrictions public ordering places on owners of intellectual property, has provided the incentives necessary to promote investment and innovation in seeds. It has not been the patentability of seeds that has led to agricultural advances, but rather the profitability of licensing agricultural intellectual property. What if seeds were not patentable? So what if …

Are All Contracts Alike?, Margaret F. Brinig

Journal Articles

This Article compares two sets of contracts that are structurally and contextually similar. They originate in two quite different fields, however: the commercial arena and the family. The contracts come from two separate empirical investigations. The first investigation studied 131 telecommunication interconnection agreements made between SBC Communications, Inc. ("SBC") and various local phone companies in Michigan beginning in 1998. The second investigation involved 141 divorce cases granted in 1998 in Johnson County, Iowa, all of which involved children, and 130 of which involved contracts, or "stipulations" as they are called locally. Though each empirical project has been described separately elsewhere, …

Rethinking Contract Practice And Law In Japan, John O. Haley

Vanderbilt Law School Faculty Publications

This article explores "the Japanese advantage" in the enforcement of ex ante contract commitments in comparison with the United States, arguing that ostensible convergence of Japanese and United States contract practice in on-going business relationships is based on very different assumptions and conditions. Writing in the early 1960s Takeyoshi KaWashima in Japan and Stewart Macaulay in the United States described prevailing views and practices related to business agreements. Their respective observations indicated a tendency in both countries to avoid formal, legally enforceable contacts. For over four decades scholars on both sides of the Pacific have tended view these observations as …

Merger To Monopoly To Serve A Single Buyer: Comment, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

No abstract provided.

Mandating Minimum Quality In Mass Arbitration, Jeffrey W. Stempel

Scholarly Works

The Supreme Court's decision in McMahon and its progeny has led many businesses and employers to embrace what was once deemed a localized, industry-specific practice. The "new" or "mass arbitration" only mildly resembles the traditional system employed by niches in industry for settling commercial matters among commercial actors. While the "old" system involved parties who were relatively equal in bargaining power and knowledge, these systems for mass arbitration lack a freely entered bargain and resemble more closely, contracts of adhesion. Privatized arbitration resolves issues of both statutory and substantive law, and there is a strong argument, given the inexperience of …

After The Battle Of The Forms, Francis J. Mootz Iii

Scholarly Works

Commercial parties continue to fight the battle of the forms, but electronic contracting is quickly rendering this practice obsolete. In this article I assess the legal landscape for commercial parties after the battle of the forms. In Section I, I briefly describe the (relatively) settled law under U.C.C. § 2-207. I then describe how these rules permit commercial parties to erect a force-field to protect themselves from being subjected to unwanted terms, and the developments in web-based contracting and recent case law applying contract formation principles to electronic contracting. Finally, I discuss how the growth of electronic contracting will eliminate …

Unintelligent Design In Contract, Peter A. Alces

Faculty Publications

Scholars have expended considerable energy in the effort to "discover" a normative theory of Contract. This Article surveys that effort and concludes that something fundamental about Contract has been missed and has frustrated the search from the outset. Succinctly, Contract doctrine resists the neat formulation theory requires. Theorists' perspectives on Contract may be generalized as attempts to impute either deontology or consequentialism to the Contract law. Focusing largely on deontological constructions of Contract, this Article demonstrates the inconsistencies among the extant heuristics-promise, reliance, and transfer-and more importantly, the failure of any of those constructions to provide a coherent explanation of …

Bankruptcy's Rarity: An Essay On Small Business Bankruptcy In The United States, Edward R. Morrison

Faculty Scholarship

Most nations have enacted statutes governing business liquidation and reorganization. These statutes are the primary focus when policymakers and scholars discuss ways to improve laws governing business failure. This focus is misplaced, at least for distressed small businesses in the United States.

Evidence from a major credit bureau shows that over eighty percent of these businesses liquidate or reorganize without invoking the formal Bankruptcy Code.

The businesses instead invoke procedures derived from the laws of contracts, secured lending, and trusts. These procedures can be cheaper and speedier than a formal bankruptcy filing, but they typically require unanimous consent of senior, …

Carrying A Good Joke Too Far, Peter A. Alces, Jason M. Hopkins

Faculty Publications

No abstract provided.