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Articles 1 - 6 of 6
Full-Text Articles in Contracts
Public Symbol In Private Contract: A Case Study, Anna Gelpern, Mitu Gulati
Public Symbol In Private Contract: A Case Study, Anna Gelpern, Mitu Gulati
Center for Contract and Economic Organization
This Article revisits a recent shift in standard form sovereign bond contracts to promote collective action among creditors. Major press outlets welcomed the shift as a milestone in fighting financial crises that threatened the global economy. Officials said it was a triumph of market forces. We turned to it for insights into contract change and crisis management. This article is based on our work in the sovereign debt community, including over 100 interviews with investors, lawyers, economists, and government officials. Despite the publicity surrounding contract reform, in private few participants described the substantive change as an effective response to financial …
From Langdell To Law And Economics: Two Conceptions Of Stare Decisis In Contract Law And Theory, Jody S. Kraus
From Langdell To Law And Economics: Two Conceptions Of Stare Decisis In Contract Law And Theory, Jody S. Kraus
Faculty Scholarship
In his classic monograph, The Death of Contract, Grant Gilmore argued that Christopher Columbus Langdell, Oliver Wendell Holmes, and Samuel Williston trumped up the legal credentials for their classical bargain theory of contract law. Gilmore's analysis has been subjected to extensive criticism, but its specific, sustained, and fundamental charge that the bargain theory was based on a fraudulent misrepresentation of precedential authority has never been questioned. In this Essay, I argue that Gilmore's case against the classical theorists rests on the suppressed premise that the precedential authority of cases resides in the express judicial reasoning used to decide them. In …
Contractual Enforcement Institutions And The Structure Of Information, Avery W. Katz
Contractual Enforcement Institutions And The Structure Of Information, Avery W. Katz
Faculty Scholarship
Many economic writers on contract theory have assumed that legal institutions are simply unable to do the job of enforcement, and have thus attempted to devise arrangements that motivate the parties to keep their commitments even though a government tribunal would be unable to tell whether they had performed. But non-legal enforcement mechanisms operate both as substitutes and complements for legal mechanisms (and as substitutes and complements for each other). This essay sketches how parties should choose among available enforcement mechanisms, based on the costs of information and other transaction costs.
Cleaning Up Lake River, Victor P. Goldberg
Cleaning Up Lake River, Victor P. Goldberg
Faculty Scholarship
A casebook favorite for exploring the liquid dated damage/penalty clause distinction is Lake River Corp. v. Carborundum Co. in which Judge Posner found a minimum quantity clause to be an unenforceable penalty clause. In this paper I argue that the case was framed improperly. Had the litigators recognized that the contract afforded one party an option, the result should have been different. The contract was for the provision of a service – setting aside capacity – which was valuable to the buyer and costly for the seller to provide. The primary purpose of the minimum quantity clause was the pricing …
Just One Click: The Reality Of Internet Retail Contracting, Ronald J. Mann, Travis Siebeneicher
Just One Click: The Reality Of Internet Retail Contracting, Ronald J. Mann, Travis Siebeneicher
Faculty Scholarship
This Essay explores the enforceability and presence of pro-seller contract terms in internet retail contracts. Analyzing case law on internet contract enforceability and a survey of 500 firms'websites, it demonstrates that even the enforceability of many internet contracts is questionable. It then presents new data that suggest that the prevalence of pro-seller contract terms is far less than usually assumed. It suggests that the benefit of making these terms enforceable is outweighed by the loss of user friendliness required for the necessary interface changes. Finally, it uses fresh statistical analyses to determine what relationship, if any, exists between enforceability, pro-seller …
Market Damages, Efficient Contracting, And The Economic Waste Fallacy, Alan Schwartz, Robert E. Scott
Market Damages, Efficient Contracting, And The Economic Waste Fallacy, Alan Schwartz, Robert E. Scott
Faculty Scholarship
Market damages are the best default rule when parties trade in thick markets: They induce parties to contract efficiently and to trade if and only if trade is efficient, and they do not create ex ante inefficiencies. Courts commonly overlook these virtues, however, when promisors bundle services that are not separately priced. For example, a promisor may agree to pay royalties on a mining lease and later to restore the promisee's property. When the cost of completion is large relative to the "market delta " – the increase in market value – courts concerned with avoiding "economic waste" limit the …