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Negative Externalities And Subprime Auto Financing: Time To Let The Hanging Paragraph Go(2), Chunlin Leonhard Apr 2013

Negative Externalities And Subprime Auto Financing: Time To Let The Hanging Paragraph Go(2), Chunlin Leonhard

Chunlin Leonhard

Economists generally agree that when private transactions generate negative externalities (i.e. unintended harmful byproduct), government intervention is potentially necessary. Negative externalities are considered socially inefficient because they destroy market supply and demand equilibrium. The existence of negative externalities is therefore one of those rare occasions when government intervention in private transactions is justified. It follows that when the government does choose to intervene, its goal should be to remedy, not to encourage, negative externalities. This article identifies one bankruptcy rule, commonly known as the Hanging Paragraph in the Bankruptcy Code, 11 U.S.C. § 1325(a)(9), that violates the basic principle of …


Beyond The Four Corners Of A Written Contract: A Global Challenge To U.S. Contract Law, Chunlin Leonhard Feb 2008

Beyond The Four Corners Of A Written Contract: A Global Challenge To U.S. Contract Law, Chunlin Leonhard

Chunlin Leonhard

U.S. contract law has developed on the basis of certain essential assumptions such as freedom of contract, autonomy and liberal individualism. Because of those basic assumptions, U.S. contract law primarily concerns itself with only protecting the resulting bargain reached by the parties. Relying on a set of well entrenched contract interpretation and construction principles, U.S. courts will generally refuse to look beyond the four corners of the written contract. Hence, in a U.S. court, a party is entitled to enforce terms of a written contact to the letter. U.S. contract law’s underlying assumptions, however, reflect the core values of the …