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Full-Text Articles in Law
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
A Financial Economic Theory Of Punitive Damages, Robert J. Rhee
Michigan Law Review
This Article provides a financial economic theory of punitive damages. The core problem, as the Supreme Court acknowledged in Exxon Shipping Co. v. Baker, is not the systemic amount of punitive damages in the tort system; rather it is the risk of outlier outcomes. Low frequency, high severity awards are unpredictable, cause financial distress, and beget social cost. By focusing only on offsetting escaped liability, the standard law and economics theory fails to account for the core problem of variance. This Article provides a risk arbitrage analysis of the relationship between variance, litigation valuation, and optimal deterrence. Starting with settlement …
Private Production Of Public Goods: Liability For Unrequested Benefits, Ariel Porat
Private Production Of Public Goods: Liability For Unrequested Benefits, Ariel Porat
Michigan Law Review
This Article explores why the law treats negative externalities (harms) and positive externalities (benefits) differently. Ideally, from an economic perspective, both negative and positive externalities should be internalized by those who produce them, for with full internalization, injurers and benefactors alike would behave efficiently. In actuality, however, whereas the law requires that injurers bear the harms they create (or wrongfully create), benefactors are seldom entitled to recover for benefits they voluntarily confer on recipients without the latter's consent ( "unrequested benefits"). One aim of this Article is to explore the puzzle of the law's differing treatment of negative and positive …
A Comparative Fault Defense In Contract Law, Ariel Porat
A Comparative Fault Defense In Contract Law, Ariel Porat
Michigan Law Review
This Article calls for the recognition of a comparative fault defense in contract law. Part I sets the framework for this defense and suggests the situations in which it should apply. These situations are sorted under two headings: cases of noncooperation and cases of overreliance. Part II unfolds the main argument for recognizing the defense and recommends applying the defense only in cases where cooperation or avoidance of overreliance is low cost.
The Role Of Fault In Contract Law: Unconscionability, Unexpected Circumstances, Interpretation, Mistake, And Nonperformance, Melvin Aron Eisenberg
The Role Of Fault In Contract Law: Unconscionability, Unexpected Circumstances, Interpretation, Mistake, And Nonperformance, Melvin Aron Eisenberg
Michigan Law Review
It is often asserted that contract law is based on strict liability, not fault. This assertion is incorrect. Fault is a basic building block of contract law, and pervades the field. Some areas of contract law, such as unconscionability, are largely fault based. Other areas, such as interpretation, include sectors that are fault based in significant part. Still other areas, such as liability for nonperformance, superficially appear to rest on strict liability, but actually rest in significant part on the fault of breaking a promise without sufficient excuse. Contract law discriminates between two types of fault: the violation of strong …
When Is A Willful Breach "Willful"? The Link Between Definitions And Damages, Richard Craswell
When Is A Willful Breach "Willful"? The Link Between Definitions And Damages, Richard Craswell
Michigan Law Review
The existing literature on willful breach has not been able to define what should count as "willful." I argue here that any definition we adopt has implications for just how high damages should be raised in those cases where a breach qualifies as willful. As a result, both of these issues-the definition of "willful," and the measure of damages for willful breach-need to be considered simultaneously. Specifically, if a definition of "willful" excludes all breachers who behaved efficiently, then in theory we can raise the penalty on the remaining inefficient breachers to any arbitrarily high level ("throw the book at …
Pragmatism Regained, Christopher Kutz
Pragmatism Regained, Christopher Kutz
Michigan Law Review
Jules Coleman's The Practice of Principle serves as a focal point for current, newly intensified debates in legal theory, and provides some of the deepest, most sustained reflections on methodology that legal theory has seen. Coleman is one of the leading legal philosophers in the Anglo-American world, and his writings on tort theory, contract theory, the normative foundations of law and economics, social choice theory, and analytical jurisprudence have been the point of departure for much of the most interesting activity in the field for the last three decades. Indeed, the origin of this book lies in Oxford University's invitation …