Law Commons^™

Perpetuities In An Unequal Age, Jack H.L. Whiteley

Northwestern University Law Review

For centuries, the common law limited aristocratic wealth. In the last three decades, that has changed. One by one, state legislatures have eliminated the rule against perpetuities (the Rule), and now “dynasty trusts” can make carefully controlled payments to a settlor’s descendants for hundreds of years. This change occurred soon before a large and ongoing intergenerational wealth transfer in the United States. Trusts scholars have roundly criticized the Rule’s removal, and some have described it as charting a path to a new Gilded Age.

This Article draws a theoretical lesson from the Rule’s demise. I argue that part of the …

Legal Strategies For Reining In "Unconscionable" Prices For Prescription Drugs, Michelle M. Mello, Rebecca E. Wolitz

Northwestern University Law Review

Policy discussions about the affordability of prescription drugs in the United States are infused with the theme that drug prices are unconscionably high. Many of the policy interventions proposed in Congress, the White House, and the states adopt this frame, authorizing regulatory action when prices exceed particular thresholds or otherwise constitute “price gouging” on the part of drug companies. Unsurprisingly, such initiatives have prompted legal challenges by the biopharmaceutical industry. State laws in particular are vulnerable to challenges on a number of grounds. In this Article, we focus on one avenue of challenge that has received little scholarly attention in …

Contract Governance In Small-World Networks: The Case Of The Maghribi Traders, Lisa Bernstein

Northwestern University Law Review

This Article revisits the best known example of successful private ordering in the economics literature: the Maghribi Jewish merchants who engaged in both local and long-distance trade across the Islamic Mediterranean in the eleventh century. Drawing on a case study of over 200 Maghribi merchant letters, it develops a network governance-based account of the way that private ordering might have supported exchange among the Maghribi traders with little or no reliance on the public legal system. The analysis reveals that a particular type of bridge-and-cluster configuration of ties among traders and trading centers--known as a “small-world network”—can have strong reputation-based …

Deal Structure, Cathy Hwang, Matthew Jennejohn

Northwestern University Law Review

Modern commercial contracts—those governing mergers and acquisitions and financial derivatives, for instance—have become structurally complex and interconnected. Yet contract law largely ignores structural complexity. This Article develops a theory of “contractual structuralism” to explain the important role of structure in every aspect of contract law, from the design of a contract to courts’ interpretation and enforcement.

For generations, scholars have debated whether a court should consider only the text of a contract or also consider broader context to determine parties’ intent. More recently, scholars have shown that parties can choose between textual and contextual interpretation by drafting a contract provision …