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Articles 1 - 10 of 10
Full-Text Articles in Law
Covid-19 Risk Factors And Boilerplate Disclosure, Stephen J. Choi, Mitu Gulati, Xuan Liu, Adam C. Pritchard
Covid-19 Risk Factors And Boilerplate Disclosure, Stephen J. Choi, Mitu Gulati, Xuan Liu, Adam C. Pritchard
Law & Economics Working Papers
The SEC mandates that public companies assess new information that changes the risks that they face and disclose these if there has been a “material” change. Does that theory work in practice? Or are companies copying and repeating the same generic disclosures? Using the shock of the COVID-19 pandemic, we explore these questions. Overall, we find considerable rote copying of boilerplate disclosures. Further, the factors that correlate with deviations from the boilerplate seem related more to the resources that companies have (large companies change updated disclosures more) and litigation risks (companies vulnerable to shareholder litigation update more) rather than general …
Modular Bankruptcy: Toward A Consumer Scheme Of Arrangement, John A. E. Pottow
Modular Bankruptcy: Toward A Consumer Scheme Of Arrangement, John A. E. Pottow
Law & Economics Working Papers
The world of international bankruptcy has seen increasing use of the versatile scheme of arrangement, a form of corporate reorganization available under English law. A key feature of the scheme is its modularity, whereby a debtor can restructure only a single class of debt, such as bond indentures, without affecting other debt, such as trade. This is the opposite of chapter 11 of the U.S. Bankruptcy Code’s comprehensive reckoning of all financial stakeholders. This article considers a novel idea: could the scheme be transplanted into the consumer realm? It argues that it could and should. Substantial benefits of more individually …
Liability For Non-Disclosure In Equity Financing, Albert H. Choi, Kathryn E. Spier
Liability For Non-Disclosure In Equity Financing, Albert H. Choi, Kathryn E. Spier
Law & Economics Working Papers
The paper analyzes the effects of holding firms liable for non-disclosure of material information when raising capital. We develop a model in which a privately-informed entrepreneur can choose to withhold information from prospective investors when issuing and selling stock and the investors can bring suit against the firm ex post for (alleged) non-disclosure. The damage payment received by the investors is partially offset by the reduced value of their equity stake. The analysis shows that the equilibrium depends on, among others, (1) the amount of personal capital the entrepreneur has to commit, (2) the frequency with which the entrepreneur is …
Class Actions And Private Antitrust Litigation, Albert H. Choi, Kathryn E. Sprier
Class Actions And Private Antitrust Litigation, Albert H. Choi, Kathryn E. Sprier
Law & Economics Working Papers
When firms collude and charge supra-competitive prices, consumers can bring antitrust lawsuits against the firms. When the litigation cost is low, firms accept the cost as just another cost of doing business, whereas when the cost is high, the firms lower the price to deter litigation. Class action is modeled as a mechanism that allows plaintiffs and attorneys to obtain economies of scale. We show that class actions, and the firms' incentive to block them, may or may not be socially desirable. Agency problems, settlement, fee-shifting, treble damages, public enforcement, and sustaining collusion through repeat play are also considered.
The Deformation Of Contract In The Information Society, Margaret Jane Radin
The Deformation Of Contract In The Information Society, Margaret Jane Radin
Law & Economics Working Papers
The HLA Hart Memorial Lecture delivered at Oxford on May 24, 2016. The Lecture considers how the advent and growth of the information society is posing challenges for the traditional theories of contract, and for the duties of the State with regard to contractual ordering. In particular, the Lecture considers the lack of ‘fit’ between certain prevalent uses of contract and the underlying justification for contract enforcement.
Less Than I Wanted To Know: Why Do Ben-Shahar And Schneider Attack Only 'Mandated' Disclosure?, Margaret Jane Radin
Less Than I Wanted To Know: Why Do Ben-Shahar And Schneider Attack Only 'Mandated' Disclosure?, Margaret Jane Radin
Law & Economics Working Papers
This essay responds to a new book by Omri Ben Shahar and Carl E. Schneider, entitled MORE THAN YOU WANTED TO KNOW: THE FAILURE OF MANDATED DISCLOSURE (Princeton, 2014). The book is an elaborate disclosure of why disclosure fails. It is hard to disagree with the fact that widespread deficits in consumer reading, understanding and decisionmaking undermine the efficacy of disclosures, and the book provides plenty of data to show this. But the authors do not much confront the fact that many mandates for disclosures are a response to what happens when firms are free to design their own fine …
What Boilerplate Said: A Response To Omri Ben-Shahar (And A Diagnosis), Margaret Jane Radin
What Boilerplate Said: A Response To Omri Ben-Shahar (And A Diagnosis), Margaret Jane Radin
Law & Economics Working Papers
This essay responds to Omri Ben-Shahar’s review of my book, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law (Princeton 2013). Ben-Shahar’s review (available at: http://ssrn.com/abstract=2255161) unfortunately does not convey the nature of this book to possible readers. His preconceptions – reflecting primarily what I call “old-school Chicago”--apparently caused him to believe that some strong version of “autonomy” was the focus of my book. Instead, the book’s purpose is to gather together a broad range of ideas relevant to boilerplate, in order to encourage readers to consider opportunities for improving our theory and practice. It makes detailed suggestions …
Mandatory Rules And Default Rules In Insurance Contracts, Tom Baker, Kyle D. Logue
Mandatory Rules And Default Rules In Insurance Contracts, Tom Baker, Kyle D. Logue
Law & Economics Working Papers
The economic analysis of contract law can organized around two general questions: (1) what are the efficient or welfare-maximizing substantive rules of contract law; and (2) once those rules have been identified, when if ever should they be made mandatory and when should they be merely “default rules” that the parties can contract around if they wish? Much of contract theory over the past twenty years has been devoted to developing answers to those two questions. The same two questions can be posed with respect to the rules of insurance law. Although previous scholars have examined particular substantive doctrines of …
A Presumptively Better Approach To Arbitrability, John A. E. Pottow, Jacob Brege, Tara J. Hawley
A Presumptively Better Approach To Arbitrability, John A. E. Pottow, Jacob Brege, Tara J. Hawley
Law & Economics Working Papers
One of the most complex problems in the arbitration field is the question of who decides disputes over the scope of an arbitrator’s purported authority. Courts in Canada and the United States have taken different approaches to this fundamental question of “arbitrability” that necessarily arises when one party disputes the contractual validity of the underlying “container” contract carrying the arbitration clause. If arbitration is a creature of contract, and contract is a product of consensual agreement, then any dispute that impugns the underlying consent of the parties to the container contract implicates the arbitration agreement itself (i.e., no contract, no …
Ability To Pay, John A. E. Pottow
Ability To Pay, John A. E. Pottow
Law & Economics Working Papers
The landmark Dodd-Frank Act of 2010 transforms the landscape of consumer credit in the United States. Many of the changes have been high-profile and accordingly attracted considerable media and scholarly attention, most notably the establishment of the Consumer Financial Protection Bureau (CFPB). But when the dust settled, one profoundly transformative innovation that did not garner the same outrage as CFPA did get into the law: imposing upon lenders a duty to assure borrowers’ ability to repay. Ensuring a borrower’s ability to repay is not an entirely unprecedented legal concept, to be sure, but its wholesale embrace by Dodd-Frank represents a …