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Full-Text Articles in Law
The Best Puffery Article Ever, David A. Hoffman
The Best Puffery Article Ever, David A. Hoffman
David A Hoffman
This Article provides the first extensive legal treatment of an important defense in the law of fraud and contracts: puffery. Legal authorities commonly say they make decisions about whether defendants should be able to utter exaggerated, optimistic, lies based on assumptions about buyer behavior, concluding that consumers do not rely on such speech. However, as the Article shows, such analyses are proxies for a deeper analytical question: does the speech encourage or discourage a type of consumption activity that the court deems welfare maximizing? The Article presents a novel constitutional analysis of puffery doctrine that focuses on the meaning of …
The "Duty" To Be A Rational Shareholder, David A. Hoffman
The "Duty" To Be A Rational Shareholder, David A. Hoffman
David A Hoffman
How and when do courts determine that corporate disclosures are actionable under the federal securities laws? The applicable standard is materiality: would a (mythical) reasonable investor have considered a given disclosure important. As I establish through empirical and statistical testing of approximately 500 cases analyzing the materiality standard, judicial findings of immateriality are remarkably common, and have been stable over time. Materiality's scope results in the dismissal of a large number of claims, and creates a set of cases in which courts attempt to explain and defend their vision of who is, and is not, a reasonable investor. Thus, materiality …
Cognitive Errors, Individual Differences, And Paternalism, Jeffrey J. Rachlinski
Cognitive Errors, Individual Differences, And Paternalism, Jeffrey J. Rachlinski
Cornell Law Faculty Publications
Legal scholars commonly argue that the widespread presence of cognitive errors in judgment justifies legal intervention to save people from predictable mistakes. Such arguments often fail to account for individual variation in the commission of such errors even though individual variation is probably common. If predictable groups of people avoid making the errors that others commit, then law should account for such differences because those who avoid errors will not benefit from paternalistic interventions and indeed may be harmed by them. The research on individual variation suggests three parameters that might distinguish people who can avoid error: cognitive ability, experience …