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Full-Text Articles in Law
Why Flexibility Matters: Inequality And Contract Pluralism, Jeremiah A. Ho
Why Flexibility Matters: Inequality And Contract Pluralism, Jeremiah A. Ho
Faculty Publications
In the decade since the Great Recession, various contract scholars have observed that one reason the financial crisis was so “great” was due in part to contract law—or, more precisely, the failures of contract law for not curbing the risky lending practices in the American housing market. However, there is another reason why contracts made that recession so great: contracts furthered inequality. In recent years, when economic inequality has become a dominant national conversation topic, we can see development of that inequality in the Great Recession. And indeed, contract law was complicit. While contractual flexibility and innovation were available to …
Sovereign Debt And The Three And A Half Minute Transaction: What Sticky Boilerplate Reveals About Contract Law And Practice, Andrea Boyack
Sovereign Debt And The Three And A Half Minute Transaction: What Sticky Boilerplate Reveals About Contract Law And Practice, Andrea Boyack
Faculty Publications
The Three and a Half Minute Transaction: Boilerplate and the Limits of Contractual Design, by Mitu Gulati and Robert E. Scott, is a cautionary tale about modern legal practice where the protagonist is the standard sovereign debt contract. The book discloses an undeniable flaw in sovereign bond boilerplate (the widely used pari passu clause) that, in spite of expensive, sophisticated lawyering, perpetuates a risky disconnect between party intent and contract terms. The fact that boilerplate terms persist even in elite sovereign-lending practices suggests that the problem of over-reliance on standard form language is ubiquitous.When contract terms diverge from client risk …