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Full-Text Articles in Law
The Myth Of Optimal Expectation Damages, Theresa Arnold, Amanda Dixon, Madison Sherrill, Mitu Gulati
The Myth Of Optimal Expectation Damages, Theresa Arnold, Amanda Dixon, Madison Sherrill, Mitu Gulati
Faculty Scholarship
A much-debated question in contract law scholarship is what the optimal measure of damages for breach should be. The casebook answer-drawing from the theory of efficient breach-is expectation damages. This standard answer, which was a major contribution of the law and economics field, has come under attack by theoreticians within that field itself. To shed an empirical perspective on the question, we look at data on the types of damages provisions parties contract/or themselves in international debt contracts. Specifically, we examine issuer call provisions, which are economically equivalent to damages for prepayment, yet not viewed as legally problematic in the …
Dartmouth College V. Woodward And The Structure Of Civil Society, Ernest A. Young
Dartmouth College V. Woodward And The Structure Of Civil Society, Ernest A. Young
Faculty Scholarship
No abstract provided.
The Price Of Law: The Case Of The Eurozone's Collective Action Clauses, Elena Carletti, Paolo Colla, Mitu Gulati, Steven Ongena
The Price Of Law: The Case Of The Eurozone's Collective Action Clauses, Elena Carletti, Paolo Colla, Mitu Gulati, Steven Ongena
Faculty Scholarship
Do markets value contract protections? And does the quality of a legal system affect such valuations? To answer these questions we exploit a unique experiment whereby, after January 1, 2013, newly issued sovereign bonds of Eurozone countries under domestic law had to include Collective Action Clauses (CACs) specifying the minimum vote needed to modify payment terms. We find that CAC bonds trade at lower yields than otherwise similar no-CAC bonds; and that the quality of the legal system matters for this differential. Hence, markets appear to see CACs as providing protection against the legal risk embedded in domestic-law sovereign bonds.
Sovereign Debt And The “Contracts Matter” Hypothesis, W. Mark C. Weidemaier, Mitu Gulati
Sovereign Debt And The “Contracts Matter” Hypothesis, W. Mark C. Weidemaier, Mitu Gulati
Faculty Scholarship
The academic literature on sovereign debt largely assumes that law has little role to play. Indeed, the primary question addressed by the literature is why sovereigns repay at all given the irrelevance of legal enforcement. But if law, and specifically contract law, does not matter, how to explain the fact that sovereign loans involve detailed contracts, expensive lawyers, and frequent litigation? This Essay makes the case that contract design matters even in a world where sovereign borrowers are hard (but not impossible) to sue. We identify a number of gaps in the research that warrant further investigation.
An Autopsy Of Cooperation: Diamond Dealers And The Limits Of Trust-Based Exchange, Barak D. Richman
An Autopsy Of Cooperation: Diamond Dealers And The Limits Of Trust-Based Exchange, Barak D. Richman
Faculty Scholarship
Both academic and popular representations of the diamond industry describe trust-based relations and an industry arbitration system that sustain trade. In recent years, however, trust among merchants has eroded, and merchants have correspondingly lost confidence in the industry's arbitration. This article describes the events that have led to the breakdown of cooperative trust in the industry and derives lessons regarding the nature and limits of reputation-based exchange in the modern economy.
Contract Development In A Matching Market: The Case Of Kidney Exchange, Kimberly D. Krawiec, Wenhao Liu, Marc L. Melcher
Contract Development In A Matching Market: The Case Of Kidney Exchange, Kimberly D. Krawiec, Wenhao Liu, Marc L. Melcher
Faculty Scholarship
We analyze a new transplant innovation — Advanced Donation, referred to by some as a kidney “gift certificate,” “layaway plan,” or “voucher — as a case study offering insights on both market and contract development. Advanced Donation provides an unusual window into the evolution of the exchange of a single good — a kidney for transplantation — from gift, to simple barter, to exchange with a temporal separation of obligations that relies solely on trust and reputational constraints for enforcement, to a complex matching market in which the parties rely, at least in part, on formal contract to define and …
The Relevance Of Law To Sovereign Debt, W. Mark C. Weidemaier, Mitu Gulati
The Relevance Of Law To Sovereign Debt, W. Mark C. Weidemaier, Mitu Gulati
Faculty Scholarship
The literature on sovereign debt treats law as of marginal significance, largely because the doctrine of sovereign immunity leaves creditors few potent legal remedies against sovereign borrowers. Although sovereign debts can indeed by hard to enforce, the goal of this Essay is to demonstrate that law plays a central, and constantly evolving, role in structuring sovereign debt markets. To list just a few examples, legal rules and institutions (i) decide when a borrower is sovereign, (ii) define the consequences of sovereignty by drawing (or refusing to draw) artificial boundaries between the sovereign and other legal entities, (iii) play some role …
From Pigs To Hogs, Stephen J. Choi, Mitu Gulati
From Pigs To Hogs, Stephen J. Choi, Mitu Gulati
Faculty Scholarship
The question of whether, and to what extent, markets price contract terms in government bond issues has been one of considerable debate in the literature. We use a natural experiment thrown up by the Euro area sovereign debt crisis of 2010-2013 to test whether a particular set of contract terms – ones that gave an advantage to sovereign guaranteed bonds over garden variety sovereign bonds – was priced. These contract terms turned out to be important for the holders of guaranteed bonds during the Greek debt restructuring of 2012, where they helped the holders of guaranteed bonds escape the haircut …
How Trade Secrecy Law Generates A Natural Semicommons Of Innovative Know-How, Jerome H. Reichman
How Trade Secrecy Law Generates A Natural Semicommons Of Innovative Know-How, Jerome H. Reichman
Faculty Scholarship
No abstract provided.
Explaining The Value Of Transactional Lawyering, Steven L. Schwarcz
Explaining The Value Of Transactional Lawyering, Steven L. Schwarcz
Faculty Scholarship
This article attempts to explain empirically the value that lawyers add when acting as counsel to parties in business transactions. Contrary to existing scholarship, which is based mostly on theory, this article shows that transactional lawyers add value primarily by reducing regulatory costs, thereby challenging the reigning models of transactional lawyers as "transaction cost engineers" and "reputational intermediaries." This new model not only helps inform contract theory but also reveals a profoundly different vision than those of existing models for the future of legal education and the profession.
An Empirical Study Of Securities Disclosure Practice, Mitu Gulati, Stephen J. Choi
An Empirical Study Of Securities Disclosure Practice, Mitu Gulati, Stephen J. Choi
Faculty Scholarship
Using a dataset of sovereign bond offering documents and underlying bond contracts for ten sovereign issuers from 1985-2005, we examine the securities disclosure practices of issuers and attorneys. The sovereign bond market is comprised of sophisticated issuers with highly paid law firms. If anyone complies fully with federal securities disclosure requirements, we expect sovereign issuers and their attorneys to do so. On the other hand, network effects that determine what information issuers chose to disclose as well as the high cost of determining what information is required for disclosure may lead issuers to fail to meet their disclosure duties. We …
Innovation In Boilerplate Contracts: An Empirical Examination Of Soverign Bonds, Mitu Gulati, Stephen J. Choi
Innovation In Boilerplate Contracts: An Empirical Examination Of Soverign Bonds, Mitu Gulati, Stephen J. Choi
Faculty Scholarship
Network externalities may lead contracting parties to stay wiht a "standardized" term despite preferences for another term. Using a dataset of sovereign bond offerings from 1995 to early 2004, we test the importance of standardization for the modification provisions relating to payment terms. We provide evidence that (1) standardization may lead parties to adopt provisions not necessarily out of preference and (2) standards, nonetheless, may change. The process of change, however, is not necessarily quick or straightforward. In the sovereign bond context, change came by way of an "interpretive shock." Contracts with modification provisions requiring the unanimous consent of bondholders …
Unconscionable Lawyers, Paul D. Carrington
Sovereign Bonds And The Collective Will, Lee C. Buchheit, G. Mitu Gulati
Sovereign Bonds And The Collective Will, Lee C. Buchheit, G. Mitu Gulati
Faculty Scholarship
No abstract provided.
Regulating Dispute Resolution Provisions In Adhesion Contracts, Paul D. Carrington
Regulating Dispute Resolution Provisions In Adhesion Contracts, Paul D. Carrington
Faculty Scholarship
No abstract provided.
The Gentleman’S Agreement In Legal Theory And In Modern Practice: United States, Herbert Bernstein, Joachim Zekoll
The Gentleman’S Agreement In Legal Theory And In Modern Practice: United States, Herbert Bernstein, Joachim Zekoll
Faculty Scholarship
No abstract provided.
Contract And Jurisdiction, Paul D. Carrington, Paul H. Haagen
Contract And Jurisdiction, Paul D. Carrington, Paul H. Haagen
Faculty Scholarship
No abstract provided.
International Contracts In European Courts: Jurisdiction Under Article 5(1) Of The Brussels Convention, Herbert Bernstein
International Contracts In European Courts: Jurisdiction Under Article 5(1) Of The Brussels Convention, Herbert Bernstein
Faculty Scholarship
No abstract provided.
The Tentative Emergence Of Student Power In The United States, William W. Van Alstyne
The Tentative Emergence Of Student Power In The United States, William W. Van Alstyne
Faculty Scholarship
No abstract provided.
Limitations On Contract Termination Rights—Franchise Cancellations, Ernest Gellhorn
Limitations On Contract Termination Rights—Franchise Cancellations, Ernest Gellhorn
Faculty Scholarship
No abstract provided.
Developments In Contract Liability Of Trusts And Trustees, John D. Johnston Jr.
Developments In Contract Liability Of Trusts And Trustees, John D. Johnston Jr.
Faculty Scholarship
No abstract provided.