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Full-Text Articles in Law

Contractual Evolution, Matthew Jennejohn, Julian Nyarko, Eric L. Talley Jan 2021

Contractual Evolution, Matthew Jennejohn, Julian Nyarko, Eric L. Talley

Faculty Scholarship

Conventional wisdom portrays contracts as static distillations of parties’ shared intent at some discrete point in time. In reality, however, contract terms evolve in response to their environments, including new laws, legal interpretations, and economic shocks. While several legal scholars have offered stylized accounts of this evolutionary process, we still lack a coherent, general theory that broadly captures the dynamics of real-world contracting practice. This paper advances such a theory, in which the evolution of contract terms is a byproduct of several key features, including efficiency concerns, information, and sequential learning by attorneys who negotiate several deals over time. Each ...


Incorporating Free, Prior And Informed Consent (Fpic) Into Investment Approval Processes, Kelly Dudine, Sam Szoke-Burke Jul 2020

Incorporating Free, Prior And Informed Consent (Fpic) Into Investment Approval Processes, Kelly Dudine, Sam Szoke-Burke

Columbia Center on Sustainable Investment Staff Publications

Investment approval processes are the gateway through which governments set the agenda for their country’s investment environment. Yet too often these processes fail to incorporate meaningful requirements regarding participation in decision-making by Indigenous and other affected communities, increasing the risk of under-performing and conflict-ridden investments.

Enabling meaningful participation by rights holders and obtaining and maintaining their Free, Prior and Informed Consent (FPIC) throughout different investment approval processes can help governments to fulfill their legal obligations, mitigate financial and political risk, and, ultimately, attract more sustainable land-based investments.

Featuring concrete guidance and drawing on case studies from Kenya, Liberia, Mexico ...


Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Y. Cordes Jun 2020

Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Y. Cordes

Columbia Center on Sustainable Investment Staff Publications

Investor-state contracts are regularly used in low-and middle-income countries to grant concessions for land-based and natural resource investments, such as agricultural, extractive industry, forestry, or renewable energy projects. These contracts are rarely negotiated in the presence of, or with meaningful input from, the people who risk being adversely affected by the project. This practice will usually risk violating requirements for meaningful consultation, and, where applicable, free, prior and informed consent (FPIC), and is particularly concerning when the investor-state contract gives the investor company rights to lands or resources over which local communities have legitimate claims.

This article explores how consultation ...


The Economics Of Leasing, Thomas W. Merrill Jan 2020

The Economics Of Leasing, Thomas W. Merrill

Faculty Scholarship

Leasing may be the most important legal institution that has received virtually no systematic scholarly attention. Real property leasing is familiar in the context of residential tenancies. But it is also widely used in commercial contexts, including office buildings and shopping centers. Personal property leasing, which was rarely encountered before World War II, has more recently exploded on a world-wide basis, with everything from autos to farm equipment to airplanes being leased. This article seeks to develop a composite picture of the defining features of leases and why leasing is such a widespread and highly successful economic institution.

The reasons ...


The Paradox Of Contracting In Markets, Robert E. Scott Jan 2020

The Paradox Of Contracting In Markets, Robert E. Scott

Faculty Scholarship

Contract design that motivates parties to invest and trade more efficiently occurs primarily in thin markets characterized by bespoke, bilateral agreements between commercial parties. In that environment, the cost of producing each contract is relatively high. Those costs are justified by offsetting design improvements in contractual incentives. In contrast, more efficient production of contract terms occurs in thick, multilateral markets where parties can realize the scale advantages of standardization. In this environment, the cost of producing individual contracts is relatively low but at the offsetting cost of undermining contractual incentives. These very different trade-offs are dictated by changes in the ...


Specific Performance, Hanoch Dagan, Michael A. Heller Jan 2020

Specific Performance, Hanoch Dagan, Michael A. Heller

Faculty Scholarship

When should specific performance be available for breach of contract? This question has engaged generations of legal economists and philosophers, historians and comparativists. Yet none of these disciplines have provided a persuasive answer. This Article provides a normatively-attractive and conceptually-coherent account. Respect for the autonomy of the promisor’s future self explains why expectation damages are, and should be, the ordinary remedy for contract breach. Also, this same normative commitment to the contracting parties’ autonomy best justifies the “uniqueness exception,” where specific performance is typically awarded, and the personal services exclusion, where it is not. For the most part, the ...


Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott Jan 2020

Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott

Faculty Scholarship

This article studies the impact of exogenous legal change on whether and how lawyers across four different deal types revise their contracts’ governing law clauses in order to solve the problem that the legal change created. The governing law clause is present in practically every contract across a wide range of industries and, in particular, it appears in deals as disparate as private equity M&A transactions and sovereign bond issuances. Properly drafted, the clause increases the ex ante economic value of the contract to both parties by reducing uncertainty and litigation risk. We posit that different levels of agency ...


Foreign Contracts And U.S. Copyright Termination Rights: What Law Applies? – Comment, Jane C. Ginsburg Jan 2020

Foreign Contracts And U.S. Copyright Termination Rights: What Law Applies? – Comment, Jane C. Ginsburg

Faculty Scholarship

The U.S. Copyright Act gives authors the right to terminate assignments of copyrights in works other than works for hire executed on or after 1 January 1978 after 35 years, and to do so notwithstanding any agreement to the contrary. Given that agreements which are subject to the laws of other countries can assign U.S. copyrights, and purport to do so in perpetuity, U.S. law’s preclusion of agreements contrary to the author’s right to exercise her termination right can give rise to a difficult choice of law issue. Two recent cases which came before courts ...


Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati Jan 2019

Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

The phenomenon of “sticky boilerplate” causing inefficient contract terms to persist exists across a variety of commercial contract types. One explanation for this failure to revise suboptimal terms is that the key agents on these transactions, including attorneys and investment bankers, are short sighted; their incentives are to get the deal done rather than ensure that they are using the best terms possible for their clients. Moreover, these agents face a first mover disadvantage that deters unilateral revisions to inefficient terms. If agency costs are indeed driving the stickiness phenomenon, we expect that the pace of revision will vary across ...


The Middleman’S Damages Revisited, Victor P. Goldberg Jan 2018

The Middleman’S Damages Revisited, Victor P. Goldberg

Faculty Scholarship

If A promises to sell to B who, in turn, promises to sell to C and either A or C breaches should B receive the gain it expected had both transactions occurred (lost profits) or the larger market/contract differential? Recent case law and commentary argues for the lost profit remedy. The argument is that there is a conflict between awarding market damages and making the nonbreacher whole. This paper argues that there is no conflict. If B were a broker, and C breached, then A would have an action against C for market damages. If B were party to ...


Freedom, Choice, And Contracts, Hanoch Dagan, Michael A. Heller Jan 2018

Freedom, Choice, And Contracts, Hanoch Dagan, Michael A. Heller

Faculty Scholarship

In The Choice Theory of Contracts, we explain contractual freedom and celebrate contract types. This Issue offers penetrating critiques. Here, we reply by refining choice theory and showing how it fits and shapes the contract canon.

I. Freedom. (1) Charles Fried challenges our account of Kantian autonomy, but his views, we show, largely converge with choice theory. (2) Nathan Oman argues for a commerce-enhancing account of autonomy. We counter that he arbitrarily slights noncommercial spheres central to human interaction. (3) Yitzhak Benbaji suggests that choice theory’s commitment to autonomy is overly perfectionist. Happily, in reply to Benbaji, we can ...


Why Autonomy Must Be Contract's Ultimate Value, Hanoch Dagan, Michael A. Heller Jan 2018

Why Autonomy Must Be Contract's Ultimate Value, Hanoch Dagan, Michael A. Heller

Faculty Scholarship

In “The Choice Theory of Contracts”, we develop a liberal theory of contract law. One core task of the book was to persuade advocates of economic analysis that they must situate their enterprise within our liberal framework. Autonomy, rightly understood, is the telos of contract.

Oren Bar-Gill pushes back strongly in “Choice Theory and the Economic Analysis of Contracts”. He offers a penetrating – perhaps devastating – critique of our approach. Bar-Gill notes the substantial convergence between choice theory and a welfarist view. If he is right, then what does choice theory add?

Our task in Part I of this Essay is ...


Autonomy For Contract, Refined, Hanoch Dagan, Michael A. Heller Jan 2018

Autonomy For Contract, Refined, Hanoch Dagan, Michael A. Heller

Faculty Scholarship

In The Choice Theory of Contracts, we advance a claim about the centrality of autonomy to contract. This Issue offers thoughtful and penetrating critiques. Here, we reply. Autonomy is the grounding principle of contract. In Choice Theory, we stressed the (1) proactive facilitation component of autonomy, in particular, the state’s obligation regarding contract types. Here, we highlight two additional, necessary implications of autonomy for contract: (2) regard for future selves and (3) relational justice. These three aspects of autonomy shape the range, limit, and floor, respectively, for the legitimate use of contract. They provide a principled and constrained path ...


Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Y. Cordes Mar 2017

Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Y. Cordes

Columbia Center on Sustainable Investment Staff Publications

Investor-state contracts are regularly used in low-and middle-income countries to grant concessions for land-based investments, such as agricultural or forestry projects. These contracts are rarely negotiated in the presence of, or with meaningful input from, the people who risk being adversely affected by the project. This has serious implications for requirements for meaningful consultation, and, where applicable, free, prior, and informed consent (FPIC), and is particularly important in situations in which investor-state contracts grant the investor rights to lands or resources over which the community has legitimate claims.

The paper explores how consultation and FPIC processes can be integrated into ...


Guide To Land Contracts: Forestry Projects, International Senior Lawyers Project, Kaitlin Y. Cordes, Sam Szoke-Burke Jan 2017

Guide To Land Contracts: Forestry Projects, International Senior Lawyers Project, Kaitlin Y. Cordes, Sam Szoke-Burke

Columbia Center on Sustainable Investment Staff Publications

Agricultural investment contracts and forestry projects can be complex, with complicated provisions that are difficult to understand. To assist non-lawyers in better understanding agricultural investment contracts, such as those available on the Open Land Contracts repository, CCSI has developed a Guide to Land Contracts: Forestry Projects.

This Guide, prepared by International Senior Lawyers Project staff and volunteers in collaboration with the Columbia Center on Sustainable Investment, aims to assist the Open Land Contracts repository users in unpacking the technical provisions and language typically found in forestry contracts in order to better understand the contracts and the potential implications of specific ...


The Macpherson-Henningsen Puzzle, Victor P. Goldberg Jan 2017

The Macpherson-Henningsen Puzzle, Victor P. Goldberg

Faculty Scholarship

In the landmark case of MacPherson v. Buick, an automobile company was held liable for negligence notwithstanding a lack of privity with the injured driver. Four decades later, in Henningsen v. Bloomfield Motors, the court held unconscionable the standard automobile company warranty which limited its responsibility to repair and replacement, even in a case involving physical injury. This suggests a puzzle: if it were so easy for firms to contract out of liability, did MacPherson accomplish anything?


Resourcecontracts.Org – A Searchable Repository For Publicly Available Mining And Petroleum Contracts, Sophie Thomashausen Apr 2016

Resourcecontracts.Org – A Searchable Repository For Publicly Available Mining And Petroleum Contracts, Sophie Thomashausen

Columbia Center on Sustainable Investment Staff Publications

ResourceContracts.org is an online, searchable and user-friendly repository of publicly available mining and petroleum contracts from around the world. It currently includes over 1,000 from 72 countries. In addition to PDF scans of each executed contract, the site includes: the full text of contracts in searchable format; plain language summaries of each contract’s key social, environmental, human rights, fiscal, and operational terms; and tools for searching and comparing contracts. Users can search contracts by country, natural resource, year, by type of contract, company, corporate group, or by annotation category.


Guide To Land Contracts: Agricultural Projects, International Senior Lawyers Project, Kaitlin Y. Cordes, Sam Szoke-Burke Mar 2016

Guide To Land Contracts: Agricultural Projects, International Senior Lawyers Project, Kaitlin Y. Cordes, Sam Szoke-Burke

Columbia Center on Sustainable Investment Staff Publications

Agricultural investment contracts can be complex, with complicated provisions that are difficult to understand. This Guide provides explanations for a range of common provisions, and includes a Glossary of legal and technical terms. It assists non-lawyers in better understanding agricultural investment contracts, such as those available on the Open Land Contracts repository.

The Guide was prepared by International Senior Lawyers Project staff and volunteers in collaboration with the Columbia Center on Sustainable Investment.


A Silver Lining? Impact Of Commodity Price Fall On Good Governance In Sierra Leone, Herbert M'Cleod, Nicolas Maennling, Lisa E. Sachs Mar 2016

A Silver Lining? Impact Of Commodity Price Fall On Good Governance In Sierra Leone, Herbert M'Cleod, Nicolas Maennling, Lisa E. Sachs

Columbia Center on Sustainable Investment Staff Publications

From 2002 to 2013, resource-rich countries in Africa enjoyed the benefits of a commodity boom, using increased revenues to embark on major infrastructure projects in roads, rail, ports, and housing. But when commodity prices fell starting in 2011 (see figure below), public sector revenues took a major hit with private sector companies scaling back operations, delaying investment decisions and suspending unprofitable operations. Especially as the number and size of investments in the sector contracted, Governments felt increased pressure to collect, manage and spend those revenues more efficiently. As a result, the fall in commodity prices and mounting economic pressure actually ...


The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott Jan 2016

The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott

Faculty Scholarship

The common law developed over centuries a small set of default rules that courts have used to fill gaps in otherwise incomplete contracts between commercial parties. These rules can be applied almost independently of context: the market damages rule, for example, requires a court only to know the difference between market and contract prices. When parties in various sectors of the economy write sales contracts but leave terms blank, courts fill in the blanks with their own rules. As a consequence, a judicial rule that many parties accept must be “transcontextual”: parties in varied commercial contexts accept the courts’ rule ...


Contractual Arbitrage, Stephen J. Choi, G. Mitu Gulati, Robert E. Scott Jan 2016

Contractual Arbitrage, Stephen J. Choi, G. Mitu Gulati, Robert E. Scott

Faculty Scholarship

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 Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott Jan 2016

The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott

Faculty Scholarship

The common law developed over centuries a small set of default rules that courts have used to fill gaps in otherwise incomplete contracts between commercial parties. These rules can be applied almost independently of context: the market damages rule, for example, requires a court only to know the difference between market and contract prices. When parties in various sectors of the economy write sales contracts but leave terms blank, courts fill in the blanks with their own rules. As a consequence, a judicial rule that many parties accept must be "transcontextual": parties in varied commercial contexts accept the courts' rule ...


The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott Jan 2016

The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott

Faculty Scholarship

The common law developed over centuries a small set of default rules that courts have used to fill gaps in otherwise incomplete contracts between commercial parties. These rules can be applied almost independently of context: the market damages rule, for example, requires a court only to know the difference between market and contract prices. When parties in various sectors of the economy write sales contracts but leave terms blank, courts fill in the blanks with their own rules. As a consequence, a judicial rule that many parties accept must be “transcontextual”: parties in varied commercial contexts accept the courts’ rule ...


Contract Design And The Shading Problem, Robert E. Scott Jan 2015

Contract Design And The Shading Problem, Robert E. Scott

Faculty Scholarship

Despite recent advances in our understanding of contracting behavior, economic contract theory has yet to identify the principal causes and effects of contract breach. In this Essay, I argue that opportunism is a primary explanation for why commercial parties deliberately breach their contracts. I develop a novel variation on opportunism that I identify as “shading;” a behavior that more accurately describes the vexing problems courts face in rooting out strategic behavior in contract litigation. I provide some empirical support for the claim that shading behavior is both pervasive in litigation over contract breach and extremely difficult for generalist courts to ...


Meeting Summary Of Colloquium On Policy, Law, Contracts, And Sustainable Development, Columbia Center On Sustainable Investment Nov 2014

Meeting Summary Of Colloquium On Policy, Law, Contracts, And Sustainable Development, Columbia Center On Sustainable Investment

Columbia Center on Sustainable Investment Staff Publications

In November 2014, CCSI and the Institute for Human Rights and Business co-convened a colloquium on policy, law, contracts, and sustainable development, with a particular focus on large-scale investments in the extractive industries and the agriculture sector. The colloquium provided an opportunity for practitioners to share information on their related work, as well as to reflect on current practices and remaining gaps regarding efforts to embed sustainability and human rights into large-scale deals. This outcome document provides a summary of the discussion, while its annex includes information on participants’ relevant programs, initiatives, and tools.


Mining Contracts: How To Read And Understand Them, International Senior Lawyers Project, Openoil, Revenue Watch Institute-Natural Resource Governance Institue, Vale Columbia Center On Sustainable International Investment Dec 2013

Mining Contracts: How To Read And Understand Them, International Senior Lawyers Project, Openoil, Revenue Watch Institute-Natural Resource Governance Institue, Vale Columbia Center On Sustainable International Investment

Columbia Center on Sustainable Investment Books

In December 2013, a diverse group of 14 experts from Africa, Asia, North and South America, and Europe worked together for five days to produce a user-friendly guide in English and in French on "Mining Contracts: How to Read and Understand Them," to help policy makers, civil society, citizens, and the media understand the often complex and opaque terms of mining contracts. With increasing calls for contract transparency – and the growing recognition of the importance of the terms of contracts for resource-rich countries – this book explains in layman’s terms the principal features of a contract, compares different approaches to ...


Devil In The Bidding Detail, Lisa E. Sachs, Jacky Mandelbaum, Perrine Toledano Sep 2012

Devil In The Bidding Detail, Lisa E. Sachs, Jacky Mandelbaum, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

In light of the recent boom in natural resource prices, India is one of them many countries facing heightened scrutiny of the allocation and terms of their resource deals. In India, that scrutiny has uncovered a multi-billion dollar controversy over coal block allocations that has gridlocked Parliament. More generally, citizens in resource-producing countries around the world are asking whether the public is getting a fair value for their countries resources, or whether investors and politicians are walking away with the prize. Finally, the important questions are being asked: how should resources be managed to ensure that they benefit the citizenry ...


Paper On The Business Case For Transparency, Perrine Toledano Jun 2012

Paper On The Business Case For Transparency, Perrine Toledano

Columbia Center on Sustainable Investment Staff Publications

CCSI strongly supports the transparency of contracts and tax flows. CCSI shares the belief of many stakeholders that transparency is essential to leverage extractive industries for sustainable development and is in the mutual interest of all stakeholders. However, some industry players continue to voice the concern that increased transparency would be harmful for their business. Therefore, CCSI is working to also establish the business case for transparency.

In one such case, some industry players have been lobbying against the regulations developed by the Security and Exchange Commission to implement the mandatory disclosure provisions of the Dodd Frank Wall Street Reform ...


Origin Myths, Contracts, And The Hunt For Pari Passu, Mark C. Weidemaier, Robert E. Scott, G. Mitu Gulati Jan 2010

Origin Myths, Contracts, And The Hunt For Pari Passu, Mark C. Weidemaier, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

Sovereign loans involve complex but largely standardized contracts, and these include some terms that no one understands. Lawyers often account for the existence of these terms through origin myths. Focusing on one contract term, the pari passu clause, this article explores two puzzling aspects of these myths. First, it demonstrates that the myths are inaccurate as to both the clause’s origin and the role of lawyers in contract drafting. Second, the myths often are unflattering, inaccurately portraying lawyers as engaged in little more than rote copying. The article probes this disjunction between the myths and lawyers’ actual practices and ...


Hoffman V. Red Owl Stores And The Myth Of Precontractual Reliance, Robert E. Scott Jan 2006

Hoffman V. Red Owl Stores And The Myth Of Precontractual Reliance, Robert E. Scott

Faculty Scholarship

Hoffman v. Red Owl Stores is one of the storied cases in modern contract law. The conventional wisdom is that Hoffman represents the emergence of a new legal rule imposing promissory estoppel liability for representations made during preliminary negotiations. Yet a review of contemporary case law shows that, in fact, courts require some form of agreement before they will grant recovery for early reliance. Hoffman's main legacy, therefore, has been as a trap for the unwary lawyer (and unhappy client) who unsuccessfully seek recovery for reliance on preliminary negotiations. This article asks how the court in Hoffman was able ...