Rise Of The Digital Regulator, 2017 Boston Univeristy School of Law
Rise Of The Digital Regulator, Rory Van Loo
•A legal system can be legitimate even though legal actors within the system know that it will, as a statistical matter, punish the innocent.
Insurance Policies: The Grandparents Of Contractual Black Holes, 2017 Penn State Law
Insurance Policies: The Grandparents Of Contractual Black Holes, Chris French
In their recent article, The Black Hole Problem in Commercial Boilerplate, Professors Stephen Choi, Mitu Gulati, and Robert Scott identify a phenomenon found in standardized contracts they describe as “contractual black holes.” The concept of black holes comes from theoretical physics. Under the original hypothesis, the gravitational pull of a black hole is so strong that once light or information is pulled past an event horizon into a black hole, it cannot escape. In recent years, the theory has been reformulated and now the hypothesis is that some information can escape, but it is so degraded that it is virtually ...
The Concurrent Liability In Contract And Tort Under U.S. And English Law: To What Extent Plaintiff Is Entitled To Recover For Damages Under Tort Claim?, 2017 Indiana University Maurer School of Law
The Concurrent Liability In Contract And Tort Under U.S. And English Law: To What Extent Plaintiff Is Entitled To Recover For Damages Under Tort Claim?, Phutchaya Numngern
Theses and Dissertations
Both U.S. and English courts has confronted with the concurrent situations mostly occurring in the cases where 1) the plaintiff asks for the recovery in tort claim despite the existence of contractual relationship or 2) the plaintiff asserts contract claim but the defendant contends that the issue at bar should be sound in tort rather than in contract. After studying all relevant cases and academic writings, this thesis found that both U.S. and English systems generally recognize concurrent tort claim as an elective right. The courts have attempted to provide the justified rationales either to allow the plaintiffs ...
Illiberty Of Contract, 2017 California Western School of Law
Illiberty Of Contract, Donald J. Smythe
The term “liberty of contract” is usually associated with the doctrine that the due process clause of the United States Constitution prohibits or should prohibit the State from regulating contracts between private individuals. Many libertarians and free-market advocates embrace the liberty of contract doctrine because they are averse to State interference with private market transactions. But the term is ironic because a contract is only legally binding if courts will enforce it. Since courts derive their authority because they are the third branch of government, they are State actors and contractual enforcement involves the exercise of the State’s powers ...
Sovereign Debt And The “Contracts Matter” Hypothesis, 2017 Duke Law School
Sovereign Debt And The “Contracts Matter” Hypothesis, W. Mark C. Weidemaier, Mitu Gulati
The academic literature on sovereign debt largely assumes that law has little role to play. Indeed, the primary question addressed by the literature is why sovereigns repay at all given the irrelevance of legal enforcement. But if law, and specifically contract law, does not matter, how to explain the fact that sovereign loans involve detailed contracts, expensive lawyers, and frequent litigation? This Essay makes the case that contract design matters even in a world where sovereign borrowers are hard (but not impossible) to sue. We identify a number of gaps in the research that warrant further investigation.
Differing Perceptions? Market Practice And The Evolution Of Foreign Sovereign Immunity, 2017 Duke Law School
Differing Perceptions? Market Practice And The Evolution Of Foreign Sovereign Immunity, W. Mark C. Weidemaier, Mitu Gulati
The 20th century witnessed a transformative, “tectonic” shift in international law, from “absolute” to “restrictive” theories of sovereign immunity. As conventionally understood, however, this dramatic transformation represented only a shift in the default rule. Under absolute immunity, national courts could not hear lawsuits and enforce judgments against a foreign sovereign without its consent. Under restrictive immunity, foreign sovereigns were presumptively not immune when they engaged in commercial acts. We demonstrate that market practices undermine this conventional understanding. Using an extensive, two-century data set of contracts between foreign governments and private creditors, we show that contracting parties have long treated absolute ...
An Autopsy Of Cooperation: Diamond Dealers And The Limits Of Trust-Based Exchange, 2017 Duke Law School
An Autopsy Of Cooperation: Diamond Dealers And The Limits Of Trust-Based Exchange, Barak D. Richman
Both academic and popular representations of the diamond industry describe trust-based relations that sustain trade and support the industry’s private arbitration system. In recent years, however, trust among merchants has eroded, and merchants have correspondingly lost confidence in the industry’s arbitration. This article describes the events that have led to the breakdown of cooperative trust in the industry and derives lessons regarding the nature and limits of reputation-based exchange in the modern economy.
Contractual Arbitrage, 2017 Duke Law School
Contractual Arbitrage, Stephen J. Choi, Mitu Gulati, Robert E. Scott
Contracts are inevitably incomplete. And standard-form or boilerplate commercial contracts are especially likely to be incomplete because they are approximations; they are not tailored to the needs of particular deals. Not only do these contracts contain gaps but, in an attempt to reduce incompleteness, they often contain clauses with vague or ambiguous terms. Terms with indeterminate meaning present opportunities for strategic behavior well after a contract has been concluded. This linguistic uncertainty in standard form commercial contracts creates an opportunity for “contractual arbitrage”: parties may argue, ex post, that the uncertainties in expression mean something that the contracting parties, ex ...
The Puzzle Of Pdvsa Bond Prices, 2017 Duke Law School
The Puzzle Of Pdvsa Bond Prices, Paolo Colla, Anna Gelpern, Mitu Gulati
Market reports in the summer of 2016 suggest that Venezuela is on the brink of default on upwards of $65 billion in debt. That debt comprises of bonds issued directly by the sovereign and those issued by the state-owned oil company PDVSA. Based on the bond contracts and other legal factors, it is not clear which of these two categories of bonds would fare better in the event of a restructuring. However, market observers are convinced — and we agree — that legal and contractual differences would likely impact the payouts on the bonds if Venezuela defaults. Using a comparison of recent ...
Restructuring Sovereign Debt After Nml V. Argentina, 2017 Duke Law School
Restructuring Sovereign Debt After Nml V. Argentina, Lee C. Buchheit, G. Mitu Gulati
The decade and a half of litigation that followed Argentina’s sovereign bond default in 2001 ended with a great disturbance in the Force. A new creditor weapon had been uncloaked: The prospect of a court injunction requiring the sovereign borrower to pay those creditors that decline to participate in a debt restructuring ratably with any payments made to those creditors that do provide the country with debt relief.
For the first time holdouts succeeded in fashioning a weapon that could be used to injure their erstwhile fellow bondholders, not just the sovereign issuer. Is the availability of this new ...
Variation In Boilerplate: Rational Design Or Random Mutation?, 2017 Duke Law School
Variation In Boilerplate: Rational Design Or Random Mutation?, Stephen J. Choi, Mitu Gulati, Robert E. Scott
Standard contract doctrine presumes that sophisticated parties choose their terminology carefully because they want courts or counterparts to understand what they intended. The implication of this “Rational Design” model of rational behavior is that courts should pay careful attention to the precise phrasing of contracts. Using a study of the sovereign bond market, we examine the Rational Design model as applied to standard-form contracting. In NML v. Argentina, federal courts in New York attached importance to the precise phrasing of the boilerplate contracts at issue. The industry promptly condemned the decision for a supposedly erroneous interpretation of a variant of ...
Organ Entrepreneurs, 2017 Duke Law School
Organ Entrepreneurs, Kieran Healy, Kimberly D. Krawiec
The supply of human organs for transplantation might seem an unlikely place to begin thinking about entrepreneurship. After all, there is no production market for human organs and, with the surprising exception of Iran, legal rules around the world make the sale of human organs for transplantation a criminal offense. Yet entrepreneurs have been present throughout the history of organ transplantation — a history of the active exploration, innovation, and management of a potentially very controversial exchange at the seemingly clear boundaries that separate giving from selling, life from death, and right from wrong.
This article explores the role of entrepreneurial ...
Puerto Rico And The Netherworld Of Sovereign Debt Restructuring, 2017 Duke Law School
Puerto Rico And The Netherworld Of Sovereign Debt Restructuring, Mitu Gulati, Robert K. Rasmussen
Puerto Rico has incurred debt well beyond its ability to repay. It attempted to address its fiscal woes through legislation allowing the restructuring of some its debt. The Supreme Court put a stop to this effort, holding that Congress in the Bankruptcy Code barred the Commonwealth from enacting its own restructuring regime. Yet all agreed that the Bankruptcy Code did not provide anything in its place. While Congress quickly enacted PROMESA in an attempt to address the Puerto Rico’s fiscal ills, we explore in this paper whether Congress has the power to bar Puerto Rico from enacting a restructuring ...
Market Information And The Elite Law Firm, 2017 Duke Law School
Market Information And The Elite Law Firm, Elisabeth De Fontenay
As a subcategory of contract negotiations, corporate transactions present information problems that have not been fully analyzed. In particular, the literature does not address the possibility that parties may simply be unaware of value-increasing transaction terms or their outside option. Such unawareness can arise even for transactions that attract many competing parties, if the bargaining process is such that (1) the price terms are negotiated and fixed prior to the non-price terms, contrary to the standard assumption; and (2) some of the non-price terms remain private for some period of time.
A simple bargaining model shows that, when such unawareness ...
A Model-Law Approach To Sovereign Debt Restructuring, 2017 Duke Law School
A Model-Law Approach To Sovereign Debt Restructuring, Steven L. Schwarcz
Unresolved sovereign debt problems are hurting debtor nations, their citizens and their creditors, and also can pose serious systemic threats to the international financial system. The existing contractual restructuring approach is insufficient to make sovereign debt sustainable. Although a more systematic legal resolution framework is needed, a formal multilateral approach, such as a treaty, is not currently politically viable.
An informal model-law approach should be legally, politically and economically feasible. Individual countries could enact the proposed model law as their domestic law. Because most sovereign debt contracts are governed by either New York or English law, it would be especially ...
How To Restructure Venezuelan Debt (¿Cómo Restructurar La Deuda Venezolana?), 2017 Duke Law School
How To Restructure Venezuelan Debt (¿Cómo Restructurar La Deuda Venezolana?), Mitu Gulati, Lee C. Buchheit
English Abstract: There is a growing consensus that Venezuela will not be able to persist for much longer with its policy of full external debt service. The social costs are just too great. This implies a debt restructuring of some kind. Venezuela, principally through its state-owned oil company, Petróleos de Venezuela, S.A. (“PDVSA”), has extensive commercial contacts with the United States. Not since Mexico in the 1980s has an emerging market country with this level of commercial contacts attempted to restructure its New York law-governed sovereign debt. Holdout creditors in a restructuring of Venezuelan sovereign debt will therefore present ...
The Price Of Law: The Case Of The Eurozone's Collective Action Clauses, 2017 Duke Law School
The Price Of Law: The Case Of The Eurozone's Collective Action Clauses, Elena Carletti, Paolo Colla, Mitu Gulati, Steven Ongena
When do markets value contract protections? And does the quality of a legal system affect such valuations?To answer these questions we exploit a quasi-natural experiment whereby, after January 1, 2013, newly issued sovereign bonds of Eurozone countries under domestic law had to include Collective Action Clauses (CACs) which specify the minimum vote needed to modify repayment terms. We find that CAC bonds trade at lower yields than otherwise similar no-CAC bonds and that the quality of the legal system matters for this differential. Hence markets see CACs as reducing the legal risk embedded in domestic law sovereign bonds.
Freedom To Mislead: The Fictitious Freedom To Contract Around Fraud Under Delaware Law, Hao Jiang
Dr. Hao Jiang
A Data Commons For Food Security, 2016 University of Ottawa