Contracts Commons^™

The Will As An Implied Unilateral Arbitration Contract, E. Gary Spitko

Faculty Publications

A consensus has begun to develop in the case law, the academic commentary, and the statutory reform movement that a testator’s provision in her will mandating arbitration of any challenge to the will should not be enforceable against a beneficiary who has not agreed to the arbitration provision, at least where the will contestant, by her contest, seeks to increase her inheritance outside the will. Grounding this consensus is the widespread understanding that a will is not a contract. This Article seeks to challenge both the understanding that the will is not a contract and the opposition to enforcement of …

The Need For A Law Of Church And Market, Nathan B. Oman

Faculty Publications

This Essay uses Helfand and Richman’s fine article to raise the question of the law of church and market. In Part I, I argue that the question of religion’s proper relationship to the market is more than simply another aspect of the church-state debates. Rather, it is a topic deserving explicit reflection in its own right. In Part II, I argue that Helfand and Richman demonstrate the danger of creating the law of church and market by accident. Courts and legislators do this when they resolve questions religious commerce poses by applying legal theories developed without any thought for the …

Efficient Contextualism, Peter M. Gerhart, Juliet P. Kostritsky

Faculty Publications

This Article recommends an economic methodology of contract interpretation that enables the court to maximize the benefits of exchange for the parties and thereby enhance the institution of contracting. We recommend a methodology that asks the parties to identify the determinants of a surplus maximizing interpretation so that the court can determine whether the determinants raise issues that need to be tried. We thus avoid the false choice between textualist and contextualist methodologies, while allowing the parties and the court to avoid costly litigation. For textualist courts, our methodology helps the judge determine when the terms the parties used are …

Context Matters - What Lawyers About Choice Of Law In Merger Agreements, Juliet P. Kostritsky

Faculty Publications

Finding out the truth about a matter can proceed in many different ways. Neoclassical law and economists would construct models built on certain assumptions. The empiricists and contextualists would collect data about the matter in the inductive not deductive sense.

The choice of law in merger agreements presents an opportunity to study a contractual provision in the context of merger deals to see what we can learn from studying the choices in detail.

There are a variety of ways to approach these provisions in merger agreements. Can we learn anything about how choices are made in the drafting of these …

Frictions And The Persistence Of Inferior Contract Terms, Royce De R. Barondes

Faculty Publications

A rudimentary conceptualization of the development of ancillary contract terms would assert competition will result in terms that are joint-wealth-maximizing for merchants and customers. Building on developments in modeling frictions in markets, this article presents simple models of frictions in multi-period contracting as to ancillary contract terms. The modeling illustrates that, for plausible parameter estimates of frictions, combinations of switching costs and investigation costs may allow collectively inferior contract terms to persist in consumer transactions. The results are in harmony with recent evidence illustrating the infrequency with which consumers actually read contract terms. The modeling identifies circumstances where this opportunistic …

A Contract Theory Of Academic Freedom, Philip Lee

Faculty Publications

(Excerpt)

Academic freedom is central to the core role of professors in a free society. Yet, current First Amendment protections exist to protect academic institutions, not the academics themselves. For example, in Urofsky v. Gilmore, six professors employed by various public colleges and universities in Virginia challenged a law restricting state employees from accessing sexually explicit material on computers owned or leased by the state. The professors claimed, in part, that such a restriction was in violation of their First Amendment academic freedom rights to conduct scholarly research. The Fourth Circuit upheld the law and noted that “to the …

Catalyzing Fans, Howard Wasserman, Dan Markel, Michael Mccann

Faculty Publications

This paper proposes the development of Fan Action Committees (“FACs”), which, like their political counterpart ("PACs"), could mobilize and empower fans to play a larger role in the decision-making associated with which “production teams” the talent will work.

We outline two institutional options: FACs could directly compensate talent by crowdfunding, or they could make donations to charities favored by talent. We then discuss both obstacles and objections from a variety of policy and legal perspectives ranging from competitive balance to distributive justice. Finally, we consider possible extensions of the FAC model as well as offer some ruminations on why FACs …

Private Ordering In The Market For Professional Services, Cassandra Burke Robertson

Faculty Publications

Freedom of contract is significantly restricted in the market for professional services. Under the so-called “corporate practice doctrine,” professionals such as doctors and lawyers are prohibited from practicing within corporate entities, and laypeople are likewise prohibited from investing in professional service firms. Defenders of this prohibition argue that it can be justified as a means of protecting professional independence and thereby increasing the quality of care. In fact, however, the available evidence suggests that investment restrictions are counterproductive to their stated goal. In practice, these restrictions raise costs and reduce access without measurably improving the quality of service at all. …

Sovereign Debt And The Three And A Half Minute Transaction: What Sticky Boilerplate Reveals About Contract Law And Practice, Andrea Boyack

Faculty Publications

The Three and a Half Minute Transaction: Boilerplate and the Limits of Contractual Design, by Mitu Gulati and Robert E. Scott, is a cautionary tale about modern legal practice where the protagonist is the standard sovereign debt contract. The book discloses an undeniable flaw in sovereign bond boilerplate (the widely used pari passu clause) that, in spite of expensive, sophisticated lawyering, perpetuates a risky disconnect between party intent and contract terms. The fact that boilerplate terms persist even in elite sovereign-lending practices suggests that the problem of over-reliance on standard form language is ubiquitous.When contract terms diverge from client risk …

Sex Matters: Considering Gender In Consumer Contracts, Amy J. Schmitz

Faculty Publications

We hear about the so-called “War on Women” and persisting salary gaps between men and women in the popular media, but contracts scholars and policymakers rarely discuss gender. Instead, dominant voices in the contracts field often reflect classical and economics-driven theories built on assumptions of gender neutral and economically rational actors. Furthermore, many mistakenly assume that market competition and antidiscrimination legislation address any improper biases in contracting. This Article therefore aims to shed light on gender’s importance by distilling data from my own e-survey of Colorado consumers along with others’ research regarding gender differences in contract outcomes, interests and behaviors. …

Learning Contracts Through Current Events: Lawrence Cunningham’S Contracts In The Real World: Stories Of Popular Contracts And Why They Matter, Miriam A. Cherry

Faculty Publications

(Excerpt)

In his recent book published by Cambridge University Press, Professor Lawrence Cunningham explores the nuances of contract law through current events. His decision to use the contracts of modern-day singers, actors, and entertainers to illustrate contract law principles is an inspired choice that will appeal to today’s law students. The book guides the reader down the well-trodden path of classic contract doctrines and applies those classics in modern, celebrity-laden contexts. In this regard, the book reads like an updated version of Marvin Chirelstein’s classic contracts primer— an easy-to-read and clearly written commentary. Cunningham’s version adds rollicking celebrity stories to …

Markets As A Moral Foundation For Contract Law, Nathan B. Oman

Faculty Publications

No abstract provided.

Bad Faith At Middle Age: Comments On The Principle Without A Name (Yet), Insurance Law, Contract Law, Specialness, Distinctiveness, And Difference, Robert H. Jerry Ii

Faculty Publications

In this article, Robert Jerry expounds on Professor Abraham's article on insurer liability for bad faith by pointing out that the concept of institutional bad faith is not a new phenomenon, but rather, one that is as old as the insurance industry itself Jerry focuses on Abraham's depiction of the "specialness" and "distinctiveness" of insurance, while exploring additional instances of "rotten to the core" systemic bad faith dating as far back as the nineteenth-century. Much like Abraham did in his article on bad faith, Jerry uses these examples of systemic bad faith to further his assertion that the insurance industry, …

Side Letters, Incorporation By Reference And Construction Of Contractual Relationships Memorialized In Multiple Writings, Royce De R. Barondes

Faculty Publications

This article will examine the legal principles applicable to contractual relationships memorialized in multiple writings.

Promise And Private Law, Nathan B. Oman

Faculty Publications

This essay was part of a symposium on the thirtieth anniversary of the publication of Charles Fried's Contract as Promise and revisits Fried's theory in light of two developments in the private-law scholarship: the rise of corrective justice and civil-recourse theories. The structural features that motivate these theories-the bilateralism of damages and the private standing of plaintiffs-are both elements of the law of contracts that Contract as Promise sets out to explain. I begin with the issue of bilateralism. Remedies--in particular the defense of expectation damages--occupy much of Fried's attention in Contract as Promise, and he insists that this particular …

The Promise Principle And Contract Interpretation: A Suggested Approach For Maximizing Value, Juliet P. Kostritsky

Faculty Publications

The promise principle and its roots in a certain type of morality of individual obligation, which play the central role in Charles Fried’s vision of Contract law, have importantly contributed to rescuing Contract law from absorption into Tort law and from the imposition of externally imposed standards that are collective in origin. It makes a mammoth contribution to alerting us to the tyranny of interference with individual self-determination. However, this essay questions whether a promise centered system derived from a moral philosophy of promising (without an observable and testable foundation in reality) and geared to internal individual obligation and duty …

Access To Consumer Remedies In The Squeaky Wheel System, Amy J. Schmitz

Faculty Publications

This article explores the “Squeaky Wheel System” (“SWS”) in business-to-consumer (“B2C”) contexts, referring to merchants’ reservation of purchase remedies and other contract benefits for only the relatively few “squeaky wheel” consumers who have the requisite information and resources to persistently seek assistance. The article uncovers how this system fosters contractual discrimination and hinders consumers’ awareness and access with respect to contract remedies. It also adds empirical insights from my recent e-survey, and offers suggestions for using the internet to empower consumers of all economic and status levels with efficient and accessible means for learning about their purchase rights and asserting …

Building Bridges To Consumer Remedies In International Econflicts, Amy J. Schmitz

Faculty Publications

Consumer purchases over the Internet (“ePurchases”) are on the rise, thereby causing an increase in conflicts regarding these purchases (“eConflicts”). Furthermore, these conflicts are increasingly international as consumers purchase goods over the Internet not knowing or caring where the seller is physically located. The problem is that if the purchase goes awry, consumers are often left without recourse due to the futility of pursing international litigation and the textured law and policy regarding enforcement of private dispute resolution procedures, namely arbitration. The United States strictly enforces arbitration contracts in business-to-consumer (“B2C”) relationships, while other countries have refused or limited enforcement …

Efficient Contracting Between Foreign Investors And Host States: Evidence From Stabilization Clauses, Sam F. Halabi

Faculty Publications

Bilateral investment treaties are agreements between sovereign states that give broad protections to investors and investments made within the jurisdiction of the other state. The prevailing view in the academy and practice is that developing countries sign bilateral investment treaties in order to reassure investors from developed states that their investments will be safe from changes in domestic law. Without these “credible commitments,” investors would be deterred from making investments, depriving developing countries of foreign capital. This Article disputes that view by demonstrating that foreign investors and host states effectively contract around the risk of changes in the law. This …

Consent To Retaliation: A Civil Recourse Theory Of Contractual Liability, Nathan B. Oman

Faculty Publications

In the ancient Near East, contracts were often solemnized by hacking up a goat. The ritual was an enacted penalty clause: “If I breach this contract, let it be done to me as we are doing to the goat.” This Article argues that we are not so far removed from our goat-hacking forbearers. Legal scholars have argued that contractual liability is best explained by the morality of promise making, or by the need to create optimal incentives in contractual performance. In contrast, this Article argues for the simpler, rawer claim that contractual liability consists of consent to retaliation in the …

Teaching Gender As A Core Value In The Firstyear Contracts Class, Kerri Lynn Stone

Faculty Publications

No abstract provided.

A Contractual Approach To Shareholder Oppression Law, Benjamin Means

Faculty Publications

According to standard law and economics, minority shareholders in closely held corporations must bargain against opportunism by controlling shareholders before investing. Put simply, you made your bed, now you must lie in it. Yet most courts offer a remedy for shareholder oppression, often premised on the notion that controlling shareholders owe fiduciary duties to the minority or must honor the minority's reasonable expectations. Thus, law and economics, the dominant mode of corporate law scholarship, appears irreconcilably opposed to minority shareholder protection, a defining feature of the existing law of close corporations.

This Article contends that a more nuanced theory of …

They Can Do What!? Limitations On The Use Of Change-Of-Terms Clauses, Peter A. Alces, Michael M. Greenfield

Faculty Publications

No abstract provided.

Pizza-Box Contracts: True Tales Of Consumer Contracting Culture, Amy J. Schmitz

Faculty Publications

Do you ask for contract or purchase terms prior to completing your everyday purchases? Do you first read the pizza box before paying the pizza delivery guy or gal? Typical consumers do not ask for or read their contracts prepurchase, and companies have become accustomed to burying purchase terms in product packaging or Internet links. These postpurchase, rolling, or “pizza-box” contracts have therefore become the norm in the consumer marketplace, and courts generally enforce them as legitimate contracts. This Article discusses varying theoretical perspectives on enforcement of these pizza-box contracts, and explores the available empirical data bearing on the legitimacy …

Reply: Clawback To The Future, Miriam A. Cherry, Jarrod Wong

Faculty Publications

(Excerpt)

In Clawbacks: Prospective Contract Measures in an Era of Excessive Executive Compensation and Ponzi Schemes (the “Article”), we undertook the task of proposing a doctrine of clawbacks that would not only furnish a framework for analyzing the term more systematically, but would also describe the ways the doctrine would relate to established rules of contract law. With his response, In the Shadow of the Omnipresent Claw: In Response to Professors Cherry & Wong (the “Response”), Michael Macchiarola has provided us with an opportunity to articulate these thoughts on the doctrine of clawbacks further, and for that opportunity and his …

Contract Is Context, Peter A. Alces

Faculty Publications

No abstract provided.

A Pragmatic Defense Of Contract Law, Nathan B. Oman

Faculty Publications

No abstract provided.

Is It Time For The Restatement Of Contracts, Fourth?, Peter A. Alces, Christopher Byrne

Faculty Publications

No abstract provided.

How To Critique & Grade Contract Drafting Assignments, Robin A. Boyle, Sue Payne, David Epstein

Faculty Publications

(Excerpt)

I have to give this disclaimer. I am high grader when it comes to contract drafting. So even though my presentation is on critiquing and grading, truthfully it’s more about critiquing for me. I will get into that in a minute. My name is Robin Boyle, and I teach at St. John’s University School of Law. First, my background. I was an evening student at Fordham and worked in law firms during the day in both litigation and corporate practices. By the time I graduated, I worked at a large law firm, which I had summered at and then …

Specific Performance And The Thirteenth Amendment, Nathan B. Oman

Faculty Publications

No abstract provided.