Contracts Commons^™

Summary Of Fourth St. Place V. Travelers Indem. Co., 127 Nev. Adv. Op. 86, Daniella Labounty

Nevada Supreme Court Summaries

The Court reviewed a district court grant of summary judgment in favor of the insurer in an insurance coverage action.

Creditors' Contempt, Lea Shepard

BYU Law Review

This Article takes a fresh look at the power of courts and creditors to force debtors to repay their obligations through in personam collection techniques. Variously known as “debtor’s examinations,” “turnover orders,” “citations to discover assets,” “supplementary proceedings,” “proceedings supplementary,” and “proceedings in aid of execution,” in personam remedies force the debtor, under threat of the court’s contempt authority, to turn over money or property directly to a creditor. Because the exercise of the court’s contempt authority can result in a debtor’s imprisonment, in personam techniques have long been regarded as a critical but potentially very coercive arrow in a …

Cross-Cultural Readings Of Intent: Form, Fiction, And Reasonable Expectations, Deborah Waire Post

Scholarly Works

No abstract provided.

The Diminishing Returns Of Incentive Pay In Executive Compensation Contracts, Gregg D. Polsky, Andrew Lund

Scholarly Works

For the past 30 years, the conventional wisdom has been that executive compensation packages should include very large proportions of incentive pay. This incentive pay orthodoxy has become so firmly entrenched that the current debates about executive compensation simply take it as a given. We argue, however, that in light of evolving corporate governance mechanisms, the marginal net benefit of incentive-laden pay packages is both smaller than appreciated and getting smaller over time. As a result, the assumption that higher proportions of incentive pay are beneficial is no longer warranted.

A number of corporate governance mechanisms have evolved to duplicate …

Wills, Trusts, And Estates, J. William Gray Jr., Katherine E. Ramsey

University of Richmond Law Review

The 2011 session of the Virginia General Assembly enacted wills, trusts, and estates legislation that: (i) eliminated a potential federal transfer tax trap in inter vivos marital trusts, (ii) interpreted transfer tax formula clauses in light of recent changes in federal law, and (iii) adopted the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act. Three other legislative enactments and seven opinions of the Supreme Court of Virginia during the twelve months ending June 1, 2011, addressed issues affecting this field. In addition to addressing those developments, this article summarizes a recent federal district court opinion that dealt with a significant …

Efficient Breach Of International Law: Optimal Remedies, 'Legalized Noncompliance,' And Related Issues, Eric A. Posner, Alan O. Sykes

Michigan Law Review

In much of the scholarly literature on international law, there is a tendency to condemn violations of the law and to leave it at that. If all violations of international law were indeed undesirable, this tendency would be unobjectionable. We argue in this Article, however that a variety of circumstances arise under which violations of international law are desirable from an economic standpoint. The reasons why are much the same as the reasons why nonperformance of private contracts is sometimes desirable- the concept of "efficient breach," familiar to modern students of contract law, has direct applicability to international law. As …

Contracting For Procedure, Kevin E. Davis, Helen Hershkoff

William & Mary Law Review

Judicial decisions of public courts increasingly are based on “contract procedure,” private rules of procedure that the parties draft and assent to before a dispute even has arisen. These rules govern such matters as the forum in which the proceeding will be conducted, whether a jury will be involved in adjudicating the dispute, the scope of rights of discovery, and rules of evidence. The practice deserves greater attention and should raise more profound concerns than the academic literature currently suggests. We argue that contract procedure operates as a form of privatization that effectively outsources government functions to private contracting parties. …

Summary Of Pacificare Of Nev., Inc. V. Rogers, 127 Nev. Adv. Op. 71, Jason Deforest

Nevada Supreme Court Summaries

An appeal from a district court order denying a motion to compel arbitration in a tort and contract action.

Derivatives: A Twenty-First Century Understanding, Timothy E. Lynch

Faculty Works

Derivatives are commonly defined as some variation of the following: a financial instrument whose value is derived from the performance of a secondary source such as an underlying bond, commodity or index. But this definition is both over-inclusive and under-inclusive. Thus, not surprisingly, derivatives are largely misunderstood, including by many policy makers, regulators and legal analysts. It is important for interested parties such as policy makers to understand derivatives, because the types and uses of derivatives have exploded in the last few decades, and because these financial instruments can provide both social benefits and cause social harms. This Article presents …

"Reputations... A Lifetime To Build, Seconds To Destroy": Maximizing The Mutually Protective Value Of Morals Clauses In Talent Agreements, Sarah D. Katz

Cardozo Journal of International and Comparative Law

The note examines the effectiveness of morals clauses in contracts, emphasizing their value lies in the protection they offer to both talent and nontalent parties. However, their efficacy is contingent upon being tailored to the specific industry and parties involved. Generic clauses fail to account for these differences, leading to reduced predictability and, consequently, diminished value.

Gambling By Another Name; The Challenge Of Purely Speculative Derivatives, Timothy E. Lynch

Faculty Works

Derivatives contracts can be used to hedge pre-existing risks, but they can also be used to speculate. This Article focuses on derivatives contracts in which both counterparties are speculators. These “purely speculative derivatives (PSD) contracts” have become increasingly common over the last several years and have notably resulted in the transfer of many tens of billions of dollars from institutions that had invested in the US subprime housing market to a handful of speculators who foresaw the market’s collapse, as well as many billions of dollars in fees to PSD brokers.

PSD contracts are problematic. PSD contracts are less-than-zero-sum transactions …

Breaching The Mortgage Contract: The Behavioral Economics Of Strategic Default, Tess Wilkinson-Ryan

Vanderbilt Law Review

Underwater homeowners face a quandary: Should they make their monthly payments as promised or walk away and save money? Traditional economic analysis predicts that homeowners will strategically default (voluntarily enter foreclosure) when it is cheaper to do so than to keep paying down the mortgage debt. But this prediction ignores the moral calculus of default, which is arguably much less straightforward. On the one hand, most people have moral qualms about breaching their contracts, even when the financial incentives are clear. On the other hand, the nature of the lender-borrower relationship is changing and mortgage lenders are increasingly perceived as …

Implied Certification Under The False Claims Act, Gregory Klass, Michael Holt

Georgetown Law Faculty Publications and Other Works

The False Claims Act prohibits fraud by government contractors, including a contractor's false certification of compliance with the contract, statutes or regulations. In the early 1990s, some courts began holding that the act of requesting payment from the government implicitly represents such compliance for the purposes the FCA. Circuits are today split on the implied certification doctrine. This Article provides a theory of implied certification, suggests how the circuit split should be resolved and describes how contracting agencies should write contracts in light of the existing rule. There are good reasons for the implied certification rule: it is an information-forcing …

The Impact Of Technology On Pre-Digital Recording Agreements: An Examination Of F.B. T. Productions, Llc V. Aftermath Records, Lauren K. Turner

West Virginia Law Review

No abstract provided.

Cross Purposes & Unintended Consequences: Karl Llewellyn, Article 2, And The Limits Of Social Transformation, Danielle Kie Hart

Nevada Law Journal

Despite attempts to reform the law to eliminate hierarchies that subordinate groups of people, the law usually ends up re-instantiating those hierarchies. This “preservation through transformation” phenomenon occurs consistently, over time and across legal disciplines. Karl Llewellyn’s efforts at drafting Article 2 of the Uniform Commercial Code are no different. Llewellyn attempted a paradigm shift in contract formation when he sought to decouple contract law from its formalistic roots and bring it back in touch with reality. But in so doing, the law-in-action strand of Legal Realism ended up working at cross purposes with the other, critical strand of Realism. …

Summary Of Dynalectric Co. Of Nev. V. Clark & Sullivan Constructors, Inc., 127 Nev. Adv. Op. No. 41, Brian L. Blaylock

Nevada Supreme Court Summaries

An appeal from an Eighth Judicial District Court judgment awarding expectation damages to Clark & Sullivan Constructors, Inc. (“C&S”) for its promissory estoppel claim against Dynalectric Co. of Nevada (“Dynalectric”).

Outsourcing Incompetence: An Essay In Honor Of Paul Verkuil, Arthur J. Jacobson

Cardozo Law Review

No abstract provided.

"Going Green" The Wrong Way: How Governments Are Unconstitutionally Delegating Their Legislative Powers In Pursuit Of Environmental Sustainability, Brandon L. Boxler

Legislation and Policy Brief

Through either executive or legislative power, state and local governments are rapidly effecting policies that encourage environmental sustainability.  Many of these policies have logically targeted buildings and infrastructure, both of which have a significant adverse impact on the environment.  In the United States, 38 percent of the nation’s carbon dioxide emissions and 67 percent of its electricity usage come from buildings.  New laws and policies are attempting to decrease these figures by requiring construction projects to “go green” and implement sustainable building practices.  These legal initiatives have the potential to create substantial environmental benefits by reducing energy consumption, greenhouse gas …

Mind Control: Firms And The Production Of Ideas, Anthony J. Casey

Seattle University Law Review

The central questions for economic theories of the firm concern how the production of a good is organized (in the market or within a firm) and why that organization prevails. Derivative to these questions, legal scholars ask how the law affects and is affected by any particular organizational structure. Emerging literature looks at these questions in connection with the law of intellectual property. The prevailing theories in that literature focus primarily, though not exclusively, on patent law and generally adopt a property-rights theory of the firm. Those theories, focusing on residual control and hold-up problems, have shown that as patent …

Theories Of The Firm And Judicial Uncertainty, Andrew S. Gold

Seattle University Law Review

There is no necessary connection between academics’ theories of the firm and judicial theories of the firm. Economists and legal scholars may adopt one theory of the firm, and courts may adopt another. We might even predict this result. Judges are not economists, and as increasingly sophisticated theories of the firm emerge in the academic literature, judges are not well-positioned to keep pace with the evolving accounts. Indeed, judges may reasonably choose to adopt no theory at all. Given these premises, this Essay explores the relationship between academically developed theories of the firm and corporate legal doctrine. Legal scholars who …

Coase, Knight, And The Nexus-Of-Contracts Theory Of The Firm: A Reflection On Reification, Reality, And The Corporation As Entrepreneur Surrogate, Charles R.T. O'Kelley

Seattle University Law Review

Working within the nexus-of-contracts model, scholars have struggled to develop a rhetorical paradigm that accurately predicts or describes corporation law. This difficulty flows from twin flaws in the currently dominant model—the equation of the corporation and the firm and the exclusion of the entrepreneur. Coase and his progenitor, Frank Knight, saw the firm as having an “inside” and an “outside” and a distinct central actor—the entrepreneur. Contrary to the allocation of resources by the unconscious processes of the market fundamental to the perfect competition model favored by free-market, nexus-of-contracts theorists, Knight and Coase looked inside the firm and identified the …

Salomon Redux: The Moralities Of Business, Allan C. Hutchinson, Ian Langlois

Seattle University Law Review

In this Essay, we revisit the Salomon case and its related litigation not only from a legal standpoint but also from a broader moral perspective. 4 In the second Part, we offer a detailed context for and account of the Salomon litigation. The third Part focuses on the historical roots of the corporation and the judicial arguments in Salomon. In the fourth Part, we explore the moral and legal consequences of the Salomon decision. Throughout the Essay, our ambition will be not only to give the Salomon case a more contextual and richer spin but also to tackle the relationship …

Law And Legal Theory In The History Of Corporate Responsibility: Corporate Personhood, Lyman Johnson

Seattle University Law Review

This Article, the first of a multipart project, addresses the nature of corporate personhood, one area where law has played a central role in the history of corporate responsibility in the United States.1 The treatment will be illustrative, not exhaustive. Consistent with the theme of the larger project, the Article serves to make the simple but important point that a full historical understanding of corporate responsibility requires an appreciation of the law’s significant, if ultimately limited, contribution to the longstanding American quest for more responsible corporate conduct. On one hand, the spheres of law and corporate responsibility, although clearly complementary, …

Nevada And The Market For Corporate Law, Bruce H. Kobayashi, Larry E. Ribstein

Seattle University Law Review

Berle and Means’s view that managers rather than shareholders control our largest corporations finds important expression in William Cary’s famous article arguing that managers have led shareholders on a “race to the bottom” whose finish line is Delaware. These views, in turn, support supplanting state corporation law with federal regulation of corporate governance. Concerns about a race to the bottom lately focus on Nevada, which seeks to be Delaware’s first real competitor for out-of-state firms in the national incorporation market. Evidence suggests that Nevada’s strategy is to raise tax revenues by offering a significantly laxer corporate law than Delaware. We …

Hired To Invent Vs. Work Made For Hire: Resolving The Inconsistency Among Rights Of Corporate Personhood, Authorship, And Inventorship, Sean M. O'Connor

Seattle University Law Review

Corporations have long held core aspects of legal personhood, such as rights to own and divest property and to sue and be sued. U.S. copyright law allows corporations to be authors while U.S. patent law does not allow them to be inventors. To be sure, both copyright law and patent law allow corporations to own copyrights and patents as assignees. But only copyright law, through its work-made-for-hire doctrine, provides for the nonnatural person of the corporation to “be” the author in an almost metaphysical sense. Under patent law, the natural-person inventors must always be listed in the patent documents, even …

A Shallow Harbor And A Cold Horizon: The Deceptive Promise Of Modern Agency Law For The Theory Of The Firm, David A. Westbrook

Seattle University Law Review

Modern agency law—the consensual agreement of one person to work for and under the control of another—has been widely used to provide a general framework for understanding a great deal of business law. Agency law concepts can be used to frame pedagogical, scholarly, institutional, and even political discourses. In so doing, modern agency law addresses concerns about the institution of the corporation, generally by reference to contract: institutions are created out of essentially consensual, and hence justifiable, relationships among autonomous individuals. So modern agency law is more than a “theory” of the firm in the narrow sense of theory; modern …

The Future Of Socialism, Robert Paul Wolff

Seattle University Law Review

An unpromising title, this, in the seventh year of the third millennium of the Common Era; rather like “Recent Developments in Ptolemaic Astronomy” or “Betamax—a Technology Whose Time Has Come.” My grandfather’s dream, the faith of my younger days, has turned to ashes. And yet, I remain persuaded that Karl Marx has something important to teach us about the world in which we live today. In what follows, I propose to take as my text a famous statement from Marx’s A Contribution to the Critique of Political Economy1—a sort of preliminary sketch of Das Kapital2—and see what it can tell …

Order For The Courts: Reforming The Nollan/Dolan Threshold Inquiry For Exactions, Winfield B. Martin

Seattle University Law Review

For decades prior to 2005, Fifth Amendment regulatory takings jurisprudence languished in a state of confused neglect. Rather than articulating a clearly discernable standard for determining whether a violation of the Takings Clause had occurred, Justices rebuffed government action that seemed to amount to “an out-and-out plan of extortion” and nodded in approval when they deemed the government to have “acted diligently and in good faith” or in furtherance of a “compelling interest.” In trying to parse this imprecise thicket, scholars have characterized the Court’s approach to regulatory takings as a “muddle,” in “disarray,” and “incoherent.” Professor Kent even noted …

Strengthening Investment In Public Corporations Through The Uncorporation, Kelli A. Alces

Seattle University Law Review

We cannot completely overcome the difficulties caused by the separation of ownership and control. In The Modern Corporation and Private Property, Adolf A. Berle and Gardiner Means focused our attention on what was then a relatively new phenomenon: widely dispersed public shareholding.1 They marveled at how, for the first time in the history of the American economy, the owners of assets had so little to do with the management of those assets, and managers had so much power over so much health that did not belong to them.2 Berle and Means described what we now call the Berle−Means corporation, the …

The Post-Revolutionary Period In Corporate Law: Returning To The Theory Of The Firm, Matthew T. Bodie

Seattle University Law Review

The consensus on corporate law theory has narrowed the field’s doctrinal and methodological foci. Although the vibrancy of shareholder primacy has at times been called into question as a matter of law, both boardrooms and courts have taken the normative call for shareholder wealth maximization increasingly to heart. There is little doubt that the revolution has not only substantially affected legal theory but also legislation, court decisions, and corporate behavior. It achieved a level of success unusual for an academic discipline; it not only transformed the field but also the world. We now find ourselves in the post-revolutionary period. For …