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Full-Text Articles in Contracts
State Contract Law And Debt Contracts, Colleen Honigsberg, Sharon Katz, Gil Sadka
State Contract Law And Debt Contracts, Colleen Honigsberg, Sharon Katz, Gil Sadka
Ira M. Millstein Center for Global Markets and Corporate Ownership
This paper examines the relationship between debt contracts and state contract law. We first develop an index to evaluate whether each state’s law is favorable or unfavorable to lenders. We then analyze how the contract terms, the frequency of covenant violations, and the repercussions of covenant violations vary across states. We find that cash collateral is most likely to be used when the contract is governed by law that is favorable to debtors and that out-of-state borrowers who use favorable law pay higher yield spreads. In addition, when the law is favorable to lenders, there are significantly fewer covenant violations, …
Protecting Reliance, Victor P. Goldberg
Protecting Reliance, Victor P. Goldberg
Faculty Scholarship
Reliance plays a central role in contract law and scholarship. One party relies on the other's promised performance, its statements, or its anticipated entry into a formal agreement. Saying that reliance is important, however, says nothing about what we should do about it. The focus of this Essay is on the many ways that parties choose to protect reliance. The relationship between what parties do and what contract doctrine cares about is tenuous at best. Contract performance takes place over time, and the nature of the parties 'future obligations can be deferred to take into account changing circumstances. Reliance matters …