Law Commons^™

Damages For Mental Distress And Other Intangible Loss In A Commercial Context, Shannon O'Byrne

Dalhousie Law Journal

As a general rule, contracts law does not permit an award of general damages for mental distress or other intangible loss. There are several rationales for this, including: plaintiffs are to bear their disappointment or upset with mental fortitude; without the rule, courts would be awash in litigation since every breach of contract brings with it some degree of emotional distress; without the rule, plaintiffs may fabricate or exaggerate the degree of their upset; and the rule simply reflects the lack of foreseeability of such loss under Hadley v. Baxendale. Notwithstanding the general rule, courts have awarded mental distress in …

Resolving The Paradox Of The Consideration Doctrine: The Implications Of Inefficient Signaling And Of Anti-Commodification Norms, David S. Gamage

ExpressO

This paper addresses one of the central problems of contract law, a puzzle that has troubled generations of contracts scholars: Why do we only enforce promises backed by consideration? Or, how can we justify insisting on the bargain context, but not requiring that the bargains be adequate? The lack of a theoretical solution to this puzzle has plagued the application of the consideration doctrine in courts of law.

We resolve this paradox through two innovations. First, using a game theory model based on asymmetric information, we dispute the common wisdom that the law should honor parties’ intentions as articulated at …

Casenote: Killing Life Partners: Why Viatical Settlements Constitute Securities – In Light Of The Sec V. Mutual Benefits Corporation And Other Recent Cases Explicitly Rejecting Life Partners, Brian Levin

ExpressO

No abstract provided.

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

The Following Article Addresses A Package Of Immigration Bills That Would Have Affected A Variety Of Titles In The Official Code Of Georgia Annotated, Susan S. Blum

Georgia State University Law Review

HR 256 - The resolution would have proposed an amendment to the Constitution of the State of Georgia to bar undocumented immigrants from the following: receiving any public services provided by the state, receiving any publicly funded health care services provided by the state, accessing public elementary and secondary schools of the state, and attending any public postsecondary institution of the state. The resolution would have presented the proposed constitutional amendment to Georgia voters for ratification or rejection. SB 169 - The bill would have prohibited any department, agency, instrumentality, or political subdivision of the State of Georgia from entering …

Bargaining Power In Contract Theory, Daniel D. Barnhizer

ExpressO

This Article analyzes the role that legal conceptions of bargaining power play in defining the jurisprudence of contract law. Contract law cannot ignore bargaining power asymmetries. Unchecked power imbalances in the bargaining context soon become indistinguishable from naked coercion, and at some level the imbalance undermines both the consent of the weaker party and the legitimacy of the resulting bargain. The debate over the role of the legal doctrine of inequality of bargaining power and subdoctrines such as unconscionability and duress has largely focused on whether and how the state should intervene in individual private agreements to correct perceived power …

Contracts Concluded By Electronic Agents - Comparative Analysis Of American And Polish Legal Systems, Aleksandra M. Jurewicz

ExpressO

This article analyzes the US and Polish law on contract formation by electronic agents. It persents the main similarities and differences in the approaches of common and civil legal systems. Finally, it discusses changes in legal theories in Poland that had to be made in order to comply with standards of electronic commerce.

Finding The Contract In Contracts For Law, Forum, And Arbitration, William John Woodward

ExpressO

Contract provisions specifying the law or forum (either judicial or arbitration) have begun appearing in litigated cases, as businesses have pressed many courts for their enforcement against consumers. In at least some of the cases, enforcement of a choice of law provision results in the displacement of the consumer’s home state protection by the lesser consumer protection of the State of the form drafter’s choosing. This phenomenon raises serious problems of federalism and local control of consumer protection. But while considerable scholarly attention has been lavished on so-called “mandatory arbitration” in this context, much less has attempted to improve our …

Is Forum-Shopping Corrupting America's Bankruptcy Courts? Review Of Lynn M. Lopucki, "Courting Failure: How Competition For Big Cases Is Corrupting The Bankruptcy Courts", Todd J. Zywicki

George Mason University School of Law Working Papers Series

In his new book, Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts, Professor Lynn LoPucki’s book argues that that current bankruptcy venue rules have spawned an improper “competition for big cases” that has “corrupted” America’s bankruptcy courts. LoPucki argues that this competition has harmed the bankruptcy system and the economy, transferring wealth from creditors and employees to incumbent management and bankruptcy professionals. He also argues that the competition that has corrupted the American bankruptcy system is being replicated internationally, resulting in a similar competition and similar harm on the global stage.

This essay reviews LoPucki’s book …

The Role Of Groups In Norm Transformation: A Dramatic Sketch, In Three Parts, Robert B. Ahdieh

Faculty Scholarship

Legal scholars, as well as economists, have focused limited attention on the role of coordinated groups of market participants - committees, clubs, associations, and the like - in social ordering generally and in the evolution of norms particularly. One might trace this neglect to some presumptive orientation to state actors (expressive law) and autonomous individuals (norm entrepreneurs) as the sole parties of interest in social change. Yet, alternative stories of social ordering and norm change might also be told. Dramatic recent changes in the contracting practices of the sovereign debt markets offer one such story.

Using the latter by way …

The Comparative Law And Economics Of Pure Economic Loss, Francesco Parisi, Vernon Valentine Palmer, Mauro Bussani

George Mason University School of Law Working Papers Series

Law and economics shows that a key factor in determining the optimal economic loss rule is found in the relationship between pure economic loss and social loss. Economic loss should be compensable in torts only to the extent that it corresponds to a socially relevant loss. In this paper we undertake a comparative evaluation of the economic loss rule to verify whether modern legal systems, although not formally adopting the economic criterion, define the exclusionary rule in light of efficiency considerations. The comparative analysis reveals that the substantive applications of the economic loss rule in European jurisdictions are consistent with …

Pre-Contractual Obligations In France And The United States, Florence Caterini

LLM Theses and Essays

This thesis compares the pre-contractual obligations in France and the United States. The focus of this study is to analyze how both legal systems deal with these pre-contractual obligations. It focuses on the possibilities given to the parties to protect themselves during the negotiation process. In event of breach of negotiations, the law gives legal remedies to the parties. French and American laws have a different analysis of the problem but they reach similar result: liability under contract law when a contract has been formed or a tentative agreement, or under tort law when no agreement whatsoever has been reached.

Should Liability Play A Role In The Social Control Of Biobanks?, Larry I. Palmer

Faculty Publications

No abstract provided.

On-Line Consumer Standard-Form Contracting Practices: A Survey And Discussion Of Legal Implications, Robert A. Hillman

Cornell Law Faculty Publications

In a recent article, Standard-Form Contracting in the Electronic Age, 77 N.Y.U. L. Rev. 429 (2002), Jeffery Rachlinski and I analyzed whether contract law's approach to the problem of paper standard forms can effectively govern electronic forms. We thought the rational and cognitive reasons consumers fail to read their paper forms apply in the e-environment. Further, although e-consumers do not face manipulative sales agents or impatient customers waiting in line but, instead, largely contract at home in the evening without time constraints, e-consumers are impatient, even click happy, and therefore still do not read their forms or shop for the …

Price, Path & Pride: Third-Party Closing Opinion Practice Among U.S. Lawyers (A Preliminary Investigation), Jonathan C. Lipson

ExpressO

This article presents the first in-depth exploration of third-party closing opinions, a common but curious – and potentially troubling -- feature of U.S. business law practice. Third-party closing opinions are letters delivered at the closing of most large transactions by the attorney for one party (e.g., the borrower) to the other party (e.g., the lender) offering limited assurance that the transaction will have legal force and effect.

Hundreds, if not thousands, of legal opinions are delivered every week. Yet, lawyers often complain that they create needless risk and cost, and produce little benefit. Closing opinions thus pose a basic question: …

Institutions, Incentives, And Consumer Bankruptcy Reform, Todd Zywicki

George Mason University School of Law Working Papers Series

Consumer bankruptcy filing rates have soared during the past 25 years. From 225,000 filings in 1979, consumer bankruptcies topped 1.5 million during 2004. This relentless upward trend is striking in light of the generally high prosperity, low interest rates, and low unemployment during that period. This anomaly of ever-upward bankruptcy filing rates during a period of economic prosperity had spurred calls to reform the Bankruptcy Code to place new conditions on bankruptcy relief. Although bankruptcy reform has drawn broad bipartisan support on Capitol Hill, these proposals have proven controversial within the academy. Critics have argued that these reforms are unnecessary …

The Notion Of Trust As A Comprehensive Theory Of Contract And Corporate Law: A New Approach To The Conception That The Corporation Is A Nexus Of Contract, Eli Bukspan

ExpressO

The paper argues that the concept of trust is inevitably latent in every contractual relationship, and is best understood as a comprehensive theory and justification of contract law as both trust and contracts (more than any other legal action) are aiming toward the same universal goal of cooperation, risk-taking, and fulfillment of reasonable expectations. Contract law, per se and through its “good faith” doctrine, could then function as an expressive, coercive, and thus corrective legal tool, serving to symbolize, build, and internalize a culture of trust wherever it has failed to develop. Accordingly, while viewing the corporation as a nexus …

Duty And Consequence: A Non-Conflating Theory Of Promise And Contract, Jeffrey Marc Lipshaw

ExpressO

I argue that the debate between deontologists and consequentialists of contract law conflates and therefore unduly confuses the analysis of each of them. The debate is a reprise of the conflation of reason and knowledge. Present-day legal consequentialists see reason (pure or practical) as unhelpful or worse. Pragmatism, if anything, rules the day. But the present-day rationalists fare no better, seeking to make constitutive claims of knowledge on the basis of reason. Hence the concept of contract as promise has been subject to the criticism that it fails as an explanation of the law (versus an exposition of how our …

The Missing Preferred Return, Victor Fleischer

ExpressO

Managers of buyout funds typically offer their investors an 8% preferred return on their investment before they take a share of any additional profits. Venture capitalists, on the other hand, rarely offer a preferred return. Instead, VCs take their cut from the first dollar of nominal profits. This disparity between venture funds and buyout funds is especially striking because the contracts that determine fund organization and compensation are otherwise very similar. The missing preferred return might suggest that agency costs pose a larger problem in venture capital than previously thought. Is the missing preferred return evidence, perhaps, that VCs are …

Contingency And Contracts: A Philosophy Of Complex Business Transactions, Jeffrey Marc Lipshaw

ExpressO

In this article, I argue that the prevailing literature on contract theory does not adequately address the way real-world lawyers address uncertainty in complex business transactions. I attribute this to the constraints imposed by thinking in legal models, the dominant tendency to turn to economics for analysis and normative prescription, and the focus on adjudicative issues of hindsight interpretation. Commercial uncertainty, and the law’s response to it, is only a subset of the broader philosophical issue of contingency. As an alternative to prevailing thought, I trace philosophical approaches to contingency, utility and morality that have come down to us since …

The Bewitchment Of Intelligence: Language And Ex Post Illusions Of Intention, Jeffrey Marc Lipshaw

ExpressO

Lawyers who negotiate and litigate over complex deals have an intuitive notion of the value of what they do in connection with the contract. The arguments around technical contract language often are a lawyers’ game; in most cases, what is clear would have been clear on a handshake; and what is tightly negotiated bears only a random relationship to the areas of future dispute. If they happen to have drafted tight and clear language around the particular matter in dispute, it is as much luck as foresight. Thereafter complex agreements can have binding effect for years, but most of the …

Losing Rights To Intellectual Property: The Perils Of Contracting With The Federal Government, Katherine White

Law Faculty Research Publications

No abstract provided.

My Modest Proposal, Celia R. Taylor

Sturm College of Law: Faculty Scholarship

This essay is modeled on Jonathon Swift's A Modest Proposal and traces its structure and style to argue that the use of the seal as a mechanism for establishing consideration should be returned to contract doctrine. It is a somewhat tongue-in-check treatment of the issue, but done with serious intent. Esteemed contract scholars spill much ink on the topic of the enforceability of donative promises. I suggest that the return of the seal would "free our great thinkers to turn their brilliance to topics of more pressing interest."

The Indemnity Principle: From A Financial To A Function Paradigm, Brad Wilson, Jeffrey E. Thomas

Faculty Works

Although the indemnity principle is well-accepted, its customary meaning has not kept up with insurance practice. This paper explores the evolution of the indemnity principle in the context of property insurance in the United States. When property insurance was standardized in the 19th century, "indemnity" had a strict, financial meaning. An insured was only entitled to receive actual cash value for a loss, less depreciation. This ensured that insureds received a financial recovery equal to the value of their property prior to the loss. This approach to indemnity was developed in the context of concerns about the morality of insurance, …

Symposium - Incomplete Contracts: Judicial Responses, Transactional Planning, And Litigation Strategies - Introduction, Juliet P. Kostritsky

Faculty Publications

This introduction introduces three articles in a Symposium by Richard Craswell, Avery Katz, Robert Scott and George Triantis on the topic of incomplete contracts. The Symposium appears in 56 CASE WES. L. REV. 135 (2005).

The recognition that parties will often fail to achieve completely contingent contracts that provide for an optimal outcome in any future state of the world raises the important question of what role courts could or should play in such contracts.

Scholars working in the law-and-economics tradition have suggested that courts should use a hypothetical bargain approach to incompleteness, filling in terms that are optimal (efficient) …

When Contracting Around The Law Will Not Work: The Potential Inability To Expressly Prohibit Punitive Damages In Arbitration, Alexia Norris

Journal of Dispute Resolution

Just as the availability of all appropriate remedies is an important part of judicial litigation, the attempt to identify and limit those remedies is an issue in an arbitration proceeding. After the United States Supreme Court's 1995 decision in Mastrobuono v. Shearson Lehman Hutton, Inc., it seemed clear that parties would be allowed to seek punitive damages if an agreement did not expressly prohibit such damages. Even so, parties continue to falter in writing agreements meant to contain the proper language that will succeed in limiting the availability of certain remedies. This is due to the continued confusion over how …

Joseph Baxendale, James J. Fishman

Elisabeth Haub School of Law Faculty Publications

The defendant in the great case of Hadley v. Baxendale is Joseph Baxendale, managing partner of Pickford and Co., the common carrier that delayed the delivery of the Hadley's shaft. Baxendale was named the defendant, because Pickfords was a partnership and did not incorporate until 1901. Joseph Baxendale was born in 1785, the son of a Lancastershire surgeon. In 1806, he moved to London, where he worked for a wholesale linen draper. Later, he became a partner in that firm, and developed the managerial and accounting skills that would serve him so well at Pickfords.

Unity And Pluralism In Contract Law, Nathan B. Oman

Faculty Publications

No abstract provided.

On Discovering Doctrine: "Justice" In Contract Agreement, Peter A. Alces

Faculty Publications

No abstract provided.

Unhappy Contracts: The Case Of Divorce Settlements, Margaret F. Brinig

Journal Articles

This paper examines a particular type of contracts that is, sadly, increasingly frequent: the agreements produced by divorcing couples. They are unhappy contracts, agreements produced as a necessary part of exit from what is now suboptimal marriage. They are virtually required by many states and are, in theory at least, closely monitored by courts since, when children are involved, they will be incorporated into court orders.What parties to unhappy contracts do is attempt to minimize losses, rather than maximize gain. How are contracts structured that will do this, and how does a difference in the size or power of the …