Contracts Commons^™

Rational Bargaining Theory And Contract: Default Rules, Hypothetical Consent, The Duty To Disclose, And Fraud, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

The author begins by responding to Coleman's rational choice approach to choosing default rules. In part I, he applies the expanded analysis of contractual consent and default rules that he had recently presented elsewhere to explain how rational bargaining, hypothetical consent, and actual consent figure in the determination of contractual default rules. Whereas Coleman advocates the centrality of rational bargaining analysis to this determination, the author explains why rational bargaining theory's role must be subsidiary to that of consent.

The author then turns his attention to Coleman's appraisal of contracting parties' duty to disclose information concerning the resources that are …

Conflicting Visions: A Critique Of Ian Macneil’S Relational Theory Of Contract, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

Perhaps the leading contemporary critic of placing consent at the center of contract law has been Ian Macneil. In his book The New Social Contract as well as in a series of complex and richly textured articles spanning nearly two decades, Macneil has eloquently presented and defended his now well-known relational theory of contract. It is a tribute to the important core of previously neglected truth in Macneil's theory that, for all its complexity, the theory can be summarized succinctly.

Macneil presents nothing less than a "holistic" "social theory" of human exchange--with particular emphasis on the human activity of "projecting …

Some Problems With Contract As Promise, Randy E. Barnett

Georgetown Law Faculty Publications and Other Works

The promise theory views the origin of contract in the making of a promise. This means that it views the creation of contracts as arising, in an important part, from the voluntary acts of promisors rather than from third parties like the State. In this regard, the theory facilitates the classical liberal value of freedom to contract. The promise theory also supports the notion that contracts should be interpreted according to the terms of the promise rather than by imposing terms on the parties. In this regard, the theory facilitates the classical liberal value of freedom from contract. These strengths …

A Better Approach To Arbitrability, Jeffrey W. Stempel

Scholarly Works

Historically, Anglo-American courts refused to enforce arbitration agreements, jealously guarding their dispute resolution monopoly. During the early twentieth century, merchants and attorneys began seeking legislation requiring courts to defer to arbitration. The United States Abitration Act took effect January 1, 1926 and has remained essentially unchanged. It was written with the implicit assumption that it would be invoked by commercial actors having relatively equal bargaining power and emotive appeal to a jury. The Act says nothing to direct the court's inquiry concerning the quality of either party's assent to the arbitration clause other than requiring a written arbitration agreement and …

Selected Poems On The Law Of Contracts, Douglass Boshkoff

Articles by Maurer Faculty

No abstract provided.

Default Rules For Contract Formation By Promise And The Need For Revision Of The Mailbox Rule, Beth A. Eisler

Kentucky Law Journal

No abstract provided.

Chapter 5 - Matrimonial Bonds: Slavery And Divorce In Nineteenth-Century America (Previously Published Article), Elizabeth B. Clark

Manuscript of Women, Church, and State: Religion and the Culture of Individual Rights in Nineteenth-Century America

In the covenant of marriage, woman is compelled to promise obedience to her husband, he becoming, to all intents and purposes, her master -- the law giving him power to deprive her of her liberty, and to administer chastisement. He has so framed the law of divorce . . . as to be wholly regardless of the happiness of women -- the law, in all cases, going upon a false supposition of the supremacy of man, and giving all power into his hands.

Saudi-Arabian Contract Law: A Comparative Perspective, Carol Lee Childress

St. Thomas Law Review

This paper will focus on a core component of Saudi Arabian business law - the law of contracts - and will look at its development from a U.S. lawyer's perspective. A brief history of Islam and the basic tenets of Islamic law along with a brief description of the Saudi Arabian governmental structure will provide the necessary background information. This paper will go on to highlight the roots of Saudi Arabian contract law in the teachings of Islam, including the conflicts over the interpretation of the Shari'a, and point out aspects of Islamic law that are quite foreign to the …

The Strategic Structure Of Offer And Acceptance: Game Theory And The Law Of Contract Formation, Avery W. Katz

Faculty Scholarship

The purpose of this article is to promote a particular research program; namely, the use of game theory to analyze the law of contract formation. Although I will often simply speak of offer and acceptance in my discussion, I mean to refer to a broader set of issues than are commonly denoted by this doctrinal label. My program transcends the narrow issue of whether particular communications technically should be classified as offers and acceptances, and includes questions often analyzed under the rubrics of implication and interpretation. At its broadest, my argument addresses all legal rules that answer two types of …

A Relational Theory Of Default Rules For Commercial Contracts, Robert E. Scott

Faculty Scholarship

The relationship between legal rules and the strategies that commercial parties use to deal with risk is among the most important and least understood topics in law and economics. Organizational theorists have generally confined their analyses to the nature of the firm and other permanent relationships. Academic commercial lawyers, in turn, have been far less venturesome than their corporate colleagues in applying fundamental economic insights. Not surprisingly, therefore, we know very little about the inner workings of most commercial relationships. For these reasons (and more) I applaud efforts to integrate economic insights and legal structures, exemplified by Clay Gillette's imaginative …

The Case For Market Damages: Revisiting The Lost Profits Puzzle, Robert E. Scott

Faculty Scholarship

An old and cardinal rule of contract law requires that expectancy damages for breach of contract put the injured party in the position she would have occupied had the contract been performed. Courts and commentators have accepted this full performance compensation principle as the central objective of the expectancy remedy, pursuant to which they have developed many more precise formulas for various types of cases. But the simplicity of the full performance principle disguises substantial problems in its application. One of the least recognized of these problems is the tendency of courts and commentators to determine the contractual expectancy ex …

Reflections On Fuller And Perdue's The Reliance Interest In Contract Damages: A Positive Economic Framework, Avery W. Katz

Faculty Scholarship

Fuller and Perdue's classic article, The Reliance Interest in Contract Damages, is regarded by many contemporary contracts scholars as the single most influential law review article in the field. For those of us who teach and think about contracts from the perspective of law and economics, the consensus would probably be close to unanimous. The article displays an approach highly congenial to an economic perspective. The connection goes beyond Fuller and Perdue's explicitly functional approach to law (which law and economics shares with other schools of thought descended from the legal realists) and beyond Fuller and Perdue's focus on …

Impossibility And Related Excuses, Victor P. Goldberg

Faculty Scholarship

In the first section I present an e of why reasonable businessmen would choose to excuse performance for some changed circumstances, but not others. In the remainder of the paper I will analyze specific problems that have arisen in the impossibility case law and literature. The explanation forwarded in Section 1 will play a prominent role in much of that discussion. Largely because their paper stimulated my thoughts on the problem, I will contrast my analysis of some of the specific cases to that of Posner and Rosenfield [1977]. I will not, except in passing, critique the case law, the …

Clarifying The Record: A Comment, Victor P. Goldberg

Faculty Scholarship

In their recent article in this journal, Boudreaux and Ekelund [1987] ha presented a distorted characterization of some of my work on the economics o regulation. The editor of this journal has graciously offered me the opportunity to respond to their criticisms and to redress some ambiguities, real or imagine in my earlier work.

No Exit?: Opting Out, The Contractual Theory Of The Corporation, And The Special Case Of Remedies, John C. Coffee Jr.

Faculty Scholarship

Aloof and insular as corporate law often seems, it cannot remain uninfluenced for very long by developments in the mainstream of American civil law. In that mainstream, there is today flowing a strong, swift current called "tort reform." As currents go, this one is remarkably broad and perhaps a little shallow, but on it floats a number of diverse legislative proposals – ceilings on liability, restrictions on attorneys' fees, greater reliance on alternative methods of dispute resolution, restrictions on joint and several liability and contribution, and the curtailment of punitive damages. All of these proposals flow from the same wellspring: …

Books Received, Law Review Staff

Vanderbilt Journal of Transnational Law

Books Received

CONTRACT LAW IN THE U.S.S.R. AND THE UNITED STATES, VOL. I: HISTORY AND GENERAL CONCEPT

By E. Allan Farnsworth and Viktor P. Mozolin

Washington, D.C.: International Law Institute, 1987. Pp.xiii, 340. $35.00

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FOREIGN RELATIONS AND NATIONAL SECURITY LAW: CASES, MATERIALS AND SIMULATIONS

By Thomas M. Franck and Michael J. Glennon

St. Paul, Minnesota: West Publishing Company, 1987. Pp.lxiv, 941

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THE GRAND STRATEGY OF THE UNITED STATES IN LATIN AMERICA

By Tom J. Farer

New Brunswick, New Jersey: Transaction Books, 1988. Pp. xxxii, 294

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JUDGES

By David Pannick

New York: Oxford University Press,1987. Pp. vii, 255. …

Quantity And Price Adjustment In Long-Term Contracts: A Case Study Of Petroleum Coke, Victor P. Goldberg, John R. Erickson

Faculty Scholarship

Much economic activity takes place within a framework of complex, long-term contracts. While economists have shown increased interest in these contracts, surprisingly little is known about them, or, indeed, about how to analyze the contracting activity of private economic actors. A case study of the actual contracts used in one industry could provide sorely needed data about the way in which reasonably clever businessmen and lawyers cope with problems scholars might consider intractable. In this article, we provide such an analysis of contracts concerning a particular product – petroleum coke. We focus on the problems of quantity and price adjustment. …

Contract Law As A System Of Values, Jack M. Beermann

Faculty Scholarship

Contract law has changed dramatically since the heyday of free contract ideology. The false conflict in the cases and literature between facilitation of market transactions and regulation to achieve social aims has been transcended, largely due to the realization that social aims are behind all of contract law. In place of this false conflict, new questions about the values advanced through contract law have been posed. Contract theory needs an account of the values underlying doctrines that were previously justified (wrongly) as means to effectuate the intent of the parties. Hugh Collins has given us such an account in his …

Price Adjustment In Long-Term Contracts, Victor P. Goldberg

Faculty Scholarship

After parties enter into a contract, changed circumstance might result in one of them being dissatisfied with the price. Anticipating this, the parties could include a price adjustment mechanism in the agreement. If the mechanism is imperfect, some dissatisfaction will remain. This dissatisfaction may result in litigation with the dissatisfied party asking the court either to excuse performance or revise the contract price. For example, large changes in fuel prices since 1973 generated considerable litigation.

In this paper, I suggest a framework for analyzing price adjustment in private contracts. Contrary to most economists and lawyers, I argue that price adjustment …

The Limits Of Expanded Choice: An Analysis Of The Interactions Between Express And Implied Contract Terms, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

Although trade and its defining terms lie at the very core of contract law, perceptions of the state's involvement in the exchange process remain peculiarly incomplete. Everyone understands that the state supplies the fundamental property-defining rules for pre-trade endowments. For instance, governmentally provided rules of tort, nuisance, and civil rights establish basic boundaries of what initially belongs to an individual and, hence, what he has to offer in exchange. When an exchange subsequently takes place, however, the parties themselves assume an important part of the burden of communicating what rights are being given and received. Although the state's general rules …

Afterword: Contracts And Uncertainty, Walter F. Pratt

Journal Articles

This symposium reveals an unexpected irony: The very innovations designed to deal with one type of uncertainty-economic-have themselves produced another type of uncertainty-that associated with resolving disputes. This new uncertainty sounds a discordant note in the traditional refrain that contracts are legal devices for allocating risks between parties. As an afterword, this article draws together evidence from the symposium and from history to emphasize that contract is not the ideal device for allocating risks at the very time that allocation is most desired-when uncertainty is greatest. The lesson can be put in starker terms: Contract is a legal relationship and …

The Mitigation Principle: Toward A General Theory Of Contractual Obligation, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

The duty to mitigate is a universally accepted principle of contract law requiring that each party exert reasonable efforts to minimize losses whenever intervening events impede contractual objectives. Although applications of the mitigation principle pervade the specific rules of contract, it is startling how many questions remain unanswered as to precisely what efforts the mitigation duty requires and what point in time the obligation arises. For example, under what circumstances does mitigation require an injured party to deal with the contract breacher? Why does the duty to minimize losses mature only after the breach, even if the injured party became …

Promises In Morality And Law, Joseph Raz

Faculty Scholarship

J.L. Austin thought that philosophers have much to learn from lawyers and the law. No doubt philosophers and lawyers have a lot to learn from each other wherever their interests intersect. But until now philosophical analysis has done more to elucidate important legal concepts and distinctions than viceversa. P.S. Atiyah's Promises, Morals, and Law may redress this imbalance. In this book, one of today's most accomplished students of the common law examines the nature of promises and the grounds of their binding force. Written in Atiyah's characteristically vigorous and lucid style, the book is a philosophical treatise, but one that …

Surrogate Gestation And The Protection Of Choice, Louise E. Graham

Law Faculty Scholarly Articles

Proponents of surrogate gestation contracts base their case on both the constitutional privacy rights of persons involved in the contract and the notion that contractual agreements are capable of sufficiently protecting all interests involved. This article first speculates on how courts might handle surrogate gestation contracts under existing laws and offers arguments for and against such contracts. Although some commentary on the contractual aspect of the agreement exists, little attention has been given to the privacy arguments of the parties. The major focus of this article, therefore, is upon the nature of the privacy claims asserted by the prospective parents …

Principles Of Relational Contracts, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

Recent scholarship has demonstrated that a significant proportion of private contracts do not easily fit the presuppositions of classical legal analysis. One reason for this is the pivotal role played in conventional legal theory by the concept of the complete contingent contract. Parties in a bargaining situation are presumed able, at minimal cost, to allocate explicitly the risks that future contingencies may cause one or the other to regret having entered into an executory agreement. Under these conditions, the role of legal regulation can be defined quite precisely. Once the underlying rules policing the bargaining process have been specified, contract …

Enforcing Promises: An Examination Of The Basis Of Contract, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

The obligation to keep promises is a commonly acknowledged moral duty. Yet not all promises – however solemnly vowed – are enforceable at law. Why are some promises legally binding and others not? Orthodox doctrinal categories provide only modest assistance in answering this persistent question. Conventional analysis, for example, has distinguished promises made in exchange for a return promise or performance from nonreciprocal promises. Indeed, common law "bargain theory" is classically simple: bargained-for promises are presumptively enforceable; nonreciprocal promises are presumptively unenforceable. But this disarmingly simple theory has never mirrored reality. Contract law has ventured far beyond such narrow limitations, …

Measuring Sellers' Damages: The Lost-Profits Puzzle, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

A buyer repudiates a fixed-price contract to purchase goods, and the seller sues for damages. How should a court measure the seller's loss? The answer seems simple: The seller should be awarded damages sufficient to place it in the same economic position it would have enjoyed had the buyer performed the contract. But the seductive conceptual simplicity of the compensation principle disguises substantial practical problems in measuring seller's damages.

Contract law has traditionally minimized measurement difficulties by basing damages in most cases on the difference between the contract price and market value of the repudiated goods. The common law courts …

An "Equivocal Estoppel": The Strange Career Of Promissory Estoppel In Kentucky Contract Law, Steven Connelly

Kentucky Law Journal

No abstract provided.

Liquidated Damages, Penalties And The Just Compensation Principle: Some Notes On An Enforcement Model And A Theory Of Efficient Breach, Charles J. Goetz, Robert E. Scott

Faculty Scholarship

For more than five centuries, strict judicial scrutiny has been applied to contractual provisions which specify an agreed amount of damages upon breach of a base obligation. Although the standards determining the enforceability of liquidated damage clauses have developed novel and labyrinthine permutations, their motivating principle has remained essentially immutable. For an executory agreement fixing damages in case of breach to be enforceable, it must constitute a reasonable forecast of the provable injury resulting from breach; otherwise, the clause will be unenforceable as a penalty and the non-breaching party will be limited to conventional damage measures.

The historical genesis of …

Book Review. Transcending Covenant And Debt, Morris S. Arnold

Articles by Maurer Faculty

No abstract provided.