Contracts Commons^™

Flexibility And Stability In Contracts, Thomas D. Barton, Helena Haapio, Tatiana Borisova

Faculty Scholarship

No abstract provided.

Why The State Cannot “Abolish Marriage” A Partial Defense Of Legal Marriage Based On The Structure Of Intimate Duties, Gregg Strauss

Faculty Scholarship

Does a liberal state have a legitimate interest in defining the terms of intimate relationships? Recently, several scholars have answered this question “no” and concluded that the state should abolish marriage, along with all other categories of intimate status. While politically infeasible, these proposals offer a powerful thought experiment. In this Article, I use this thought experiment to argue that the law cannot avoid relying on intimate status norms and has legitimate reasons to retain an intimate status like marriage.

The argument has three parts. First, even if the law abolished licensed status categories, ordinary doctrines in tort, contract and …

When Governments Write Contracts: Policy And Expertise In Sovereign Debt Markets, W. Mark C. Weidemaier, Mitu Gulati, Anna Gelpern

Faculty Scholarship

At least three times in the past two decades, national governments and institutions at the regional and international levels have tried to reform sovereign bond contracts to facilitate debt restructuring. Increasingly, these efforts have focused on promoting majority modifications clauses, a species of collective action clause (CAC) that facilitates a binding debt restructuring. Rather than legislate or regulate, governments have convened expert commissions, produced model CACs, and aggressively marketed these clauses to debtors and creditors. When events prove the existing CAC template inadequate or irrelevant, the process begins anew. This paper considers this mode of government intervention, which has a …

Contract Law And Fundamental Legal Conceptions: An Application Of Hohfeldian Terminology To Contract Doctrine, Daniel P. O'Gorman

Faculty Scholarship

No abstract provided.

Rethinking Jacob & Youngs V. Kent, Victor P. Goldberg

Faculty Scholarship

Most living lawyers have run into Jacob & Youngs, Inc. v. Kent in their legal education. It has long been a staple in Contracts casebooks. While the result has been widely applauded, in recent years there has been some push-back. Professor Kenneth Ching has recently criticized both Cardozo’s argument and the result. Professor Robert Scott in a number of papers, some coauthored, has also concluded that the result was wrong. Yet given the state of New York law at the time Cardozo’s result was correct. Moreover, I will argue, the outcome is one that parties would adopt today. Ironically, despite …

Private International Law Aspects Of Authors' Contracts: The Dutch And French Examples, Jane C. Ginsburg, Pierre Sirinelli

Faculty Scholarship

Copyright generally vests in the author, the human creator of the work. But because, at least until recently, most authors have been ill-equipped to commercialize and disseminate their works on their own, the author has granted rights to intermediaries to market her works. Since most authors are the weaker parties to publishing, production, or distribution contracts, the resulting deal may favor the interests of the intermediary to the detriment of the author’s interests. Many national copyright laws have introduced a variety of corrective measures, from the very first copyright act, the 1710 British Statute of Anne, which instituted the author’s …

A Crib Sheet For Contracts Profs, Victor P. Goldberg

Faculty Scholarship

Over the last two decades I have been digging into the facts on a number of contracts cases, many of them featured in casebooks. I have collected the material in two books; one appeared in 2006 and the other is hot off the presses. This brief paper provides a roadmap for professors who might want more depth on the cases than is provided in the decisions or the casebooks. A recurring theme in the two books is that parties designing their contractual relationships must deal with change. This shows up in the manner in which they price the option to …

Delaware’S Implied Contractual Covenant Of Good Faith And “Sibling Rivalry” Among Equity Holders, Daniel S. Kleinberger

Faculty Scholarship

An obligation of good faith and fair dealing is implied in every common law contract and is codified in the Uniform Commercial Code (“U.C.C”). The terminology differs: Some jurisdictions refer to an “implied covenant;” others to an “implied contractual obligation;” still others to an “implied duty.” But whatever the label, the concept is understood by the vast majority of U.S. lawyers as a matter of commercial rather than entity law. And, to the vast majority of corporate lawyers, “good faith” does not mean contract law but rather conjures up an important aspect of a corporate director’s duty of loyalty.

Nonetheless, …

The Role Of The Profit Imperative In Risk Management, Christopher French

Faculty Scholarship

Risks in the world abound. Every day there is a chance that each of us could be in a car accident. Or, one of us could be the victim of a tornado, flood or earthquake. Every day someone becomes deathly ill from an insidious disease. Our properties are in constant peril—one’s house could catch fire at any time or a tree could fall on it during a storm. Any one of these events could have devastating financial consequences, and they are just a few of the many risks that impact our daily lives. One of the principal ways we manage …

Contract Design And The Shading Problem, Robert E. Scott

Faculty Scholarship

Despite recent advances in our understanding of contracting behavior, economic contract theory has yet to identify the principal causes and effects of contract breach. In this Essay, I argue that opportunism is a primary explanation for why commercial parties deliberately breach their contracts. I develop a novel variation on opportunism that I identify as “shading;” a behavior that more accurately describes the vexing problems courts face in rooting out strategic behavior in contract litigation. I provide some empirical support for the claim that shading behavior is both pervasive in litigation over contract breach and extremely difficult for generalist courts to …

Ex Ante Choice Of Jury Waiver Clauses In Mergers, Darius Palia, Robert E. Scott

Faculty Scholarship

This paper examines empirically why sophisticated parties in some merger and acquisition deals choose to waive their right to jury trials and some do not. We examine merger agreements for a large sample of 276 deals for the 11-year period 2001 to 2011. We exclude private company deals and those where the choice of forum and law is Delaware. First, we find that 48.2% of the deals have jury waiver clauses. Second, we find that deals in which New York is chosen as the governing law and forum state are more likely to include a jury waiver clause. No other …

Third-Party Beneficiaries And Contractual Networks, Alan Schwartz, Robert E. Scott

Faculty Scholarship

An increasing trend of economic agents is to form productive associations such as networks, platforms, and other hybrids. Subsets of these agents contract with each other to further their network project and these contracts can create benefits for, or impose costs on, agents who are not contract parties. Contract law regulates third party claims against contract parties with the third-party beneficiary doctrine, which directs courts to ask whether the contracting parties "intended" to benefit a particular third party. We show here what courts do with third party claims when network members fail to perform for third parties and what the …

From Contract To Status: Collaboration And The Evolution Of Novel Family Relationships, Elizabeth S. Scott, Robert E. Scott

Faculty Scholarship

The past decade has witnessed dramatic changes in public atti- tudes about and legal status for same-sex couples who wish to marry. These changes demonstrate that the legal conception of the family is no longer limited to traditional marriage. They also raise the possibility that other relationships – cohabiting couples and their children, voluntary kin groups, multigenerational groups, and polygamists – might gain legal recognition as families. This Article probes the challenges faced by aspiring families and the means by which they could attain their goal. It builds on the premise that the state remains committed to social-welfare criteria for …

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 …

Human Equity? Regulating The New Income Share Agreements, Shu-Yi Oei, Diane Ring

Faculty Scholarship

A controversial new financing phenomenon has recently emerged. New "income share agreements" (''ISAs'') enable an individual to raise funds by pledging a percentage of her future earnings to investors for a certain number of years. These contracts, which have been offered by entities such as Fantex, Upstart, Pave, and Lumni, raise important questions for the legal system: Are they a form of modern-day indentured servitude or an innovative breakthrough in human financing? How should they be treated under the law?

This Article comprehensively addresses the public policy and legal issues raised by ISAs and articulates an analytical approach to evaluating …

Contra Proferentem And The Role Of The Jury In Contract Interpretation, Ethan J. Leib, Steve Thel

Faculty Scholarship

Revisiting Bill Whitford’s work on the role of the jury in contract interpretation and his work on consumer form contracting inspired us to take a careful look at a doctrine of contract interpretation that is usually thought to help consumers in interpretive battles with those who draft their contracts unilaterally. But we found that contra proferentem -- the canon that requires construing or interpreting a contract against the drafter when ambiguities arise -- is more confusing than we expected. What we have done here is lay out some of the complexities of the doctrine, focusing on its broader application outside …

Is There A "Duty To Read"?, Charles L. Knapp

Faculty Scholarship

The notion that there is in general contract law a "duty to read" persists in the decisions of American courts. This Article explores the general question of what it may mean to say that there is a "duty to read," and concludes by suggesting what role (if any) that doctrine should play in our present-day law of contract. The Article begins by examining various ways in which the "duty to read" is commonly articulated, and compares it to other contract law concepts: the "duty to bargain in good faith" and the "duty to mitigate damages." The Article next considers a …

Fiduciary Discretion, D. Gordon Smith, Jordan C. Lee

Faculty Scholarship

Discretion is an important feature of all contractual relationships. In this Article, we rely on incomplete contract theory to motivate our study of discretion, with particular attention to fiduciary relationships. We make two contributions to the substantial literature on fiduciary law. First, we describe the role of fiduciary law as “boundary enforcement,” and we urge courts to honor the appropriate exercise of discretion by fiduciaries, even when the beneficiary or the judge might perceive a preferable action after the fact. Second, we answer the question, how should a court define the boundaries of fiduciary discretion? We observe that courts often …

The Perils Of Primacy: Successor Liability For Lenders Turned Declarants In Louisiana Common Interest Communities, Christopher K. Odinet

Faculty Scholarship

In surveying the landscape of contemporary American real estate, it is increasingly difficult — if not impossible — to find a development that is not part of a common-interest community. Whether one is strolling through the avenues of a mixed-use commercial development or driving down the manicured tree-lined streets in a residential neighborhood, a complex and detailed legal regime underpins these developments in order to ensure that the order, quality, and aesthetic of the project is ensured and maintained from its earliest days and long into its future.

Since its inception in the early 1900s, the complexity of common interest …

Debt-Buyer Lawsuits And Inaccurate Data, Peter A. Holland

Faculty Scholarship

Pursuant to secret purchase and sale agreements (also known as forward flow agreements), the accounts that banks sell to debt buyers are often sold “as is,” with explicit and emphatic disclaimers that the debts may not be owed, the amounts claimed may not be accurate, and documentation may be missing. Despite their full knowledge that the accuracy and completeness of the data has been specifically disclaimed by the bank, when they sue consumers, debt buyers tell courts that the information obtained from the bank is inherently reliable and accurate. In order to avoid a fraud on the courts, the contents …

Regulating Sovereign Wealth Funds Through Contract, Naveen Thomas

Faculty Scholarship

No abstract provided.

The Restatement (Second) Of Contracts Reasonably Certain Terms Requirement: A Model Of Neoclassical Contract Law And A Model Of Confusion And Inconsistency, Daniel P. O'Gorman

Faculty Scholarship

No abstract provided.

Contract Law And The Hand Formula, Daniel P. O'Gorman

Faculty Scholarship

No abstract provided.

Wrap Contract Morass, Nancy Kim

Faculty Scholarship

No abstract provided.

Boilerplate And Consent, Nancy Kim

Faculty Scholarship

In Margaret Jane Radin's book, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law, Radin argues that boilerplate is a social problem leading to normative and democratic degradation of important rights. In his review of Radin’s book, Omri Ben-Shahar outlines two approaches to regulation by boilerplate. He labels the first as “autonomism,” which asks “how such one-sided dictation of terms by firms fits within a liberal account of good social order, of democratic control and participation, and of individual autonomy.” Ben-Shahar views Radin as representative of the autonomists. The second way of viewing regulation-by-boilerplate is “to ask …

Situational Duress And The Aberrance Of Electronic Contracts, Nancy Kim

Faculty Scholarship

This article explains how the aberrant nature of electronic contracts has unique effects. Companies take advantage of these unique effects and use electronic contracts in a coercive manner. This article proposes the new defense of “situational duress” to address the exploitative use of electronic contracts in certain situations.

Part I explains why electronic contracts are aberrant and explains how the developing law in this area deviates from traditional contract doctrine. This section also discusses how the electronic form affects consumer behavior and understanding of contract terms. Part II provides background to the traditional doctrine of duress and introduces the concept …

Two Alternate Visions Of Contract Law In 2025, Nancy Kim

Faculty Scholarship

Part I of this essay examines how businesses have shaped the evolution of contract’s form from the past to the present and ex-plains how courts have responded by reshaping contract law.1 Part II of this essay anticipates changes in the business landscape and explains how these changes might create new challenges for contract law. Part III predicts two alternative visions for contract law in 2025. The first is as a diminished body of law, made nearly irrelevant by other laws and preempted by private rules administered by non-judicial entities. The second vision is that of a robust contract law administered …

Text And Context: Contract Interpretation As Contract Design, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott

Faculty Scholarship

Contract interpretation remains the most important source of commercial litigation and the most contentious area of contemporary contract doctrine and scholarship. Two polar positions have competed for dominance in contract interpretation. In a textualist regime, generalist courts cannot consider context; in a contextualist regime, they must. Underlying this dispute are contrary assumptions about the prototypical contract each interpretive style addresses. For modern textualists, contracts are bespoke, between legally sophisticated parties who embed as much or as little of the contractual context as they wish in an integrated writing and prefer to protect their choices against judicial interference by an interpretive …

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 …

The Future Of Many Contracts, Victor P. Goldberg

Faculty Scholarship

Forty years ago, my former colleague, the late Ian Macneil, published an article entitled The Many Futures of Contracts. When I was asked to contribute to this symposium on what contract law might look like in 2025, the play on words was too good to resist. Professor Macneil developed the notion of "relational contracts," emphasizing the limits of classical contract law in dealing with long-term contractual relations. His work had a strong influence on scholarship, including my work. The notion that many contractual relationships are long-lived and require some form of adaptation as circumstances change and new information becomes available …