Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Articles 1 - 8 of 8

Full-Text Articles in Law

Parallel Contract, Aditi Bagchi Feb 2012

Parallel Contract, Aditi Bagchi

Faculty Scholarship at Penn Law

This Article describes a new model of contract. In parallel contract, one party enters into a series of contracts with many similarly situated individuals on background terms that are presumptively identical. Parallel contracts depart from the classical model of contract in two fundamental ways. First, obligations are not robustly dyadic in that they are neither tailored to the two parties to a given agreement nor understood by those parties by way of communications with each other. Second, obligations are not fixed at a discrete moment of contract. Parallel contracts should be interpreted differently than agreements more consistent with the classic ...


Coordinating In The Shadow Of The Law: Two Contextualized Tests Of The Focal Point Theory Of Legal Compliance, Richard H. Mcadams, Janice Nadler Jan 2008

Coordinating In The Shadow Of The Law: Two Contextualized Tests Of The Focal Point Theory Of Legal Compliance, Richard H. Mcadams, Janice Nadler

Faculty Working Papers

In situations where people have an incentive to coordinate their behavior, law can provide a framework for understanding and predicting what others are likely to do. According to the focal point theory of expressive law, the law's articulation of a behavior can sometimes create self-fulfilling expectations that it will occur. Existing theories of legal compliance emphasize the effect of sanctions or legitimacy; we argue that, in addition to sanctions and legitimacy, law can also influence compliance simply by making one outcome salient. We tested this claim in two experiments where sanctions and legitimacy were held constant. Experiment 1 demonstrated ...


On The Stickiness Of Default Rules, Omri Ben-Shahar, John A. E. Pottow Jan 2006

On The Stickiness Of Default Rules, Omri Ben-Shahar, John A. E. Pottow

Articles

It was once perceived, and still is commonly taught, that default rules in contract law must mimic efficient arrangements. Otherwise, these rules impose needless transaction costs upon parties who seek to opt out of them to reach more efficient positions. In settings where these costs are high, parties might find themselves "stuck" in a default, unable to reach the outcome that they prefer. The strong version of this account-that the only factor that can make an inefficient default rule stick is the direct cost of drafting a tailored provision-has been gradually reappraised. It is by now recognized that factors beyond ...


The Law And Economics Of Contracts, Benjamin E. Hermalin, Avery W. Katz, Richard Craswell Jan 2006

The Law And Economics Of Contracts, Benjamin E. Hermalin, Avery W. Katz, Richard Craswell

Faculty Scholarship

This paper, which will appear as a chapter in the forthcoming Handbook of Law and Economics (A.M. Polinsky & S. Shavell, eds.), surveys major issues arising in the economic analysis of contract law. It begins with an introductory discussion of scope and methodology, and then addresses four topic areas that correspond to the major doctrinal divisions of the law of contracts. These areas include freedom of contract (i.e., the scope of private power to create binding obligations), formation of contracts (both the procedural mechanics of exchange, and rules that govern pre-contractual behavior), contract interpretation (what consequences follow when agreements ...


Contracts With Consent: A Contextual Critique Of The No-Retraction Liability Regime, Ronald J. Mann Jan 2004

Contracts With Consent: A Contextual Critique Of The No-Retraction Liability Regime, Ronald J. Mann

Faculty Scholarship

This is a reply to Omri Ben-Shahar's Contracts with Consent, forthcoming in the Pennsylvania Law Review, and will be published along with his essay in that journal. The reply makes two main points. First, it argues that Omri's no-retraction liability regime will impose substantial costs, largely because of the frequency with which parties will have non-opportunistic reasons for retracting contract proposals that their negotiating partners have not yet accepted. Second, it argues that these costs will be substantial even though Ben-Shahar presents his proposal as a default rule. First, his rule vitiates the information-forcing benefits of the current ...


...And Contractual Consent, Randy E. Barnett Jan 1994

...And Contractual Consent, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

In Part I, the author contends that when economists persistently ignore the importance of contractual consent, they are missing the crucial problem of legitimacy. In Parts II and IV, he responds to the criticisms of his consent theory of contract advanced by Jay Feinman and Dennis Patterson. Both Feinman and Patterson object to the enterprise in which the author and others are engaging, and he explains why each is wrong to dismiss the current debate over default rules. Finally, in contrast, in Part III the author shows how Steven Burton's theory of default rules, which he finds most congenial ...


The Sound Of Silence: Default Rules And Contractual Consent, Randy E. Barnett Jan 1992

The Sound Of Silence: Default Rules And Contractual Consent, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

In this article, the author challenges the received wisdom of "gap-filling in the absence of consent" by showing how the concept of default rules bolsters the theoretical importance of consent. He accomplishes this by expanding and refining his analysis of a "consent theory of contract." The author proposes that the concept of default rules reveals consent to be operating at two distinct levels of contract theory. First, the presence of consent to be legally bound is essential to justify the legal enforcement of any default rules. Second, nested within this overall consent to be legally bound, consent also operates to ...


Rational Bargaining Theory And Contract: Default Rules, Hypothetical Consent, The Duty To Disclose, And Fraud, Randy E. Barnett Jan 1992

Rational Bargaining Theory And Contract: Default Rules, Hypothetical Consent, The Duty To Disclose, And Fraud, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

The author begins by responding to Coleman's rational choice approach to choosing default rules. In part I, he applies the expanded analysis of contractual consent and default rules that he had recently presented elsewhere to explain how rational bargaining, hypothetical consent, and actual consent figure in the determination of contractual default rules. Whereas Coleman advocates the centrality of rational bargaining analysis to this determination, the author explains why rational bargaining theory's role must be subsidiary to that of consent.

The author then turns his attention to Coleman's appraisal of contracting parties' duty to disclose information concerning the ...