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Full-Text Articles in Law
An Economic Analysis Of The Guaranty Contract, Avery W. Katz
An Economic Analysis Of The Guaranty Contract, Avery W. Katz
Faculty Scholarship
Guaranty arrangements, in which one person stands as surety for a second person's obligation to a third, are ubiquitous in commercial transactions and in commercial law. In recent years, however, scholarly attention to the topic has been scant; and no one has systematically analyzed this body of law and practice from an economic policy perspective. Accordingly, this Article attempts to outline the basic economic logic underlying the guaranty relationship, and applies the results to a variety of specific issues in government policy and private planning. It poses and answers three main questions: First, why would a creditor prefer to make …
Legal Design And The Evolution Of Commercial Norms, Jody S. Kraus
Legal Design And The Evolution Of Commercial Norms, Jody S. Kraus
Faculty Scholarship
The Uniform Commercial Code determines the content of most commercial law default rules by incorporating common merchant practices. The success of this incorporation strategy depends on the likely efficiency of evolved commercial practices. In this Article, I use the best available theory of cultural evolution to analyze how and why commercial practices evolve. This analysis confirms that the incorporation strategy is far superior to a system in which lawmakers rely predominantly on individual analysis and experimentation to design commercial law. But the analysis also demonstrates that common commercial practices, and the laws incorporating them, are unlikely to be optimal, in …
An Economic Analysis Of The Lost-Volume Retail Seller, Victor P. Goldberg
An Economic Analysis Of The Lost-Volume Retail Seller, Victor P. Goldberg
Faculty Scholarship
Suppose that a customer agrees to buy a boat and before it is delivered, he reneges. The dealer subsequently resells the boat to another customer at the same price. Has the seller suffered damages (aside from incidental damages) and, if so, should he be compensated? This question, dubbed the lost-volume seller problem, has been the subject of considerable legal analysis, usually in the context of explicating section 2-708(2) of the Uniform Commercial Code (U.C.C.). There have been a number of attempts to apply economic analysis to this difficult question, the most recent by Professors Goetz and Scott. Unfortunately, the economic …