Contracts Commons^™

Contract Lore As Heuristic Starting Points, Colin P. Marks

Faculty Articles

What Professor Hillman labels as lore are better thought of as a series of heuristic starting points. I do not label them heuristics in and of themselves as they do not represent shortcuts to the ultimate answer. But, as I explain, all of the areas that Professor Hillman identifies as lore are actually quite nuanced, sometimes filled with exceptions; other times, they simply represent the first step in a long inquiry. Heuristics as a teaching device has been recognized in law and other disciplines as an effective tool in not only conveying information, but also prodding the student to conduct …

Consumer Psychology And The Problem Of Fine Print Fraud, Roseanna Sommers, Meirav Furth-Matzkin

Articles

This Article investigates consumers' beliefs about contracts that are formed as a result of fraud. Across four studies, we asked lay survey respondents to judge scenarios in which sellers use false representations to induce consumers to buy products or services. In each case, the false representations are directly contradicted by the written terms of the contract, which the consumers sign without reading. Our findings reveal that lay respondents, unlike legally trained respondents, believe that such agreements are consented to and will be enforced as written, despite the seller's material deception. Importantly, fine print discourages consumers from wanting to take legal …

Falcon Driftwood V. Day Chief, 19-Ap-12 (Blkft. Tr. Ct. App., Jan. 29, 2020), Blackfeet Appellate Court

Court Decisions

In the Blackfeet Tribal Court of Appeals, the Court resolved a contract dispute for the sale of a trailer, in favor of the Plaintiff after the Respondent failed to make payments and pay insurance for the trailer to the Plaintiff pursuant to the legally binding contract. The Plaintiff retained legal title until such time as Respondent paid for the trailer in full. The Court reversed the lower court determination and ruled that the Respondent is to return the trailer, in the same condition received by the respondent, within 10 days.

Reframing Housing: Incorporating Public Law Principles Into Private Law, Kristen Barnes

College of Law - Faculty Scholarship

A new public-private law paradigm is developing with respect to the relationship of the state to private contracts. The paradigm melds private law concepts like unconscionability, good faith, and fair dealing with the public human rights principles of dignity and vulnerability. I trace this paradigm shift in the context of the housing law of Spain, where several rich cultural and legal resources have inspired a new sensibility with regard to residential mortgage loan contracts, rental agreements, and the overall duties and obligations of governments to address the citizenry's housing needs. Although this reorientation reflects decisions from the European Court of …

Easy As Abc: Why The Abc Test Should Be Adopted As The Sole Test Of Employee–Independent Contractor Status, Eric Markovits

Cardozo Law Review de•novo

This Note examines the features and history of the three most commonly used tests for employee classification before advocating that the ABC test be more broadly adopted going forward.

Contractual Incapacity And The Americans With Disabilities Act, Sean M. Scott

Faculty Scholarship

The doctrine of contractual incapacity allows people with mental disabilities to avoid their contractual liability. Its underlying premise is that the law has an obligation to protect people with such disabilities both from themselves and from unscrupulous people who would take advantage of them; mental incapacity provides this protection by rendering certain contracts unenforceable. The Disability Rights Movement ("DRM"), however, has challenged such protective legal doctrines, as they rest on outmoded concepts about people with mental disabilities.

This essay argues that the mental incapacity doctrine undermines the goals of the DRM and the legislative goals of the Americans with Disabilities …

De Facto Shareholder Primacy, Jeff Schwartz

Maryland Law Review

No abstract provided.

Contractual Arbitrage, Stephen J. Choi, G. Mitu Gulati, Robert E. Scott

Faculty Scholarship

Standard-form contracts are likely to be incomplete because they are not tailored to the needs of particular deals. In an attempt to reduce incompleteness, standard-form contracts often contain clauses with vague or ambiguous terms. Terms with indeterminate meaning present opportunities for strategic behavior well after a contract has been executed. This linguistic uncertainty in standard-form commercial contracts creates an opportunity for “contractual arbitrage”: parties may argue ex post that the uncertainties in expression mean something that the contracting parties did not contemplate ex ante. This chapter argues that the scope for contractual arbitrage is a direct function of the techniques …

Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

The textbook model of commercial contracts between sophisticated parties holds that terms are proposed, negotiated and ultimately priced by the parties. Parties reach agreement on contract provisions that best suit their transaction with the goal of maximizing the joint surplus from the contract. The reality, of course, is that the majority of the provisions in contemporary commercial contracts are boilerplate terms derived from prior transactions and even the most sophisticated contracting parties pay little attention to these standard terms, focusing instead on the price of the transaction. With standard-form or boilerplate contracts, this dynamic of replicating by rote the terms …

Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott

Faculty Scholarship

This article studies the impact of exogenous legal change on whether and how lawyers across four different deal types revise their contracts’ governing law clauses in order to solve the problem that the legal change created. The governing law clause is present in practically every contract across a wide range of industries and, in particular, it appears in deals as disparate as private equity M&A transactions and sovereign bond issuances. Properly drafted, the clause increases the ex ante economic value of the contract to both parties by reducing uncertainty and litigation risk. We posit that different levels of agency costs …

Foreign Contracts And U.S. Copyright Termination Rights: What Law Applies? – Comment, Richard Arnold, Jane C. Ginsburg

Faculty Scholarship

The U.S. Copyright Act gives authors the right to terminate assignments of copyrights in works other than works for hire executed on or after 1 January 1978 after 35 years, and to do so notwithstanding any agreement to the contrary. Given that agreements which are subject to the laws of other countries can assign U.S. copyrights, and purport to do so in perpetuity, U.S. law’s preclusion of agreements contrary to the author’s right to exercise her termination right can give rise to a difficult choice of law issue. Two recent cases which came before courts in the U.S. and England …

The Economics Of Leasing, Thomas W. Merrill

Faculty Scholarship

Leasing may be the most important legal institution that has received virtually no systematic scholarly attention. Real property leasing is familiar in the context of residential tenancies. But it is also widely used in commercial contexts, including office buildings and shopping centers. Personal property leasing, which was rarely encountered before World War II, has more recently exploded on a world-wide basis, with everything from autos to farm equipment to airplanes being leased. This article seeks to develop a composite picture of the defining features of leases and why leasing is such a widespread and highly successful economic institution. The reasons …

Contracts: An Eight-Factor Test For Quantum Meruit Compensation For A Dismissed Contingency Fee Counsel—Faricy Law Firm, P.A. V. Api, Inc. Asbestos Settlement Trust, 912 N.W.2d 652 (Minn. 2018), Mitch Ohiwa

Mitchell Hamline Law Review

No abstract provided.

"You're Fired!": The Common Law Should Respond With The Refashioned Tort Of Abusive Discharge, William R. Corbett

Journal Articles

An at will prerogative without limits could be suffered only in an anarchy, and there not for long--it certainly cannot be suffered in a society such as ours without weakening the bond of counter balancing rights and obligations that holds such societies together. Thus, while there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature …

Delaware As Deal Arbiter, Christina M. Sautter

Journal Articles

Most would agree that the Delaware courts are the leading jurists in the resolution of corporate conflicts, particularly in the Mergers & Acquisitions (M&A) context. Arguably a greater role that Delaware plays is that of a norm setter, both with respect to the expectations of management conduct in the M&A process and with respect to deal terms, particularly deal protection devices. Like in any relationship, there is a "give and take" between practitioners and Delaware. That is, practitioners are "on the front lines," often innovating with respect to new deal structures and deal terms. After some time, Delaware has the …

Criminal Usury And Its Impact On New York Business Transactions, Christopher Basile

Touro Law Review

No abstract provided.

Smart Contracts And The Illusion Of Automated Enforcement, Danielle D'Onfro

Scholarship@WashULaw

This symposium essay explores the barriers to deploying smart contracts in the consumer finance space: the humans themselves, existing consumer protection laws, and the other businesses who have financial contracts with consumers but that cannot deploy smart contracts. These three barriers render perfectly automated enforcement all but impossible. Nevertheless, there may be room for modifiable smart contracts in the consumer financial space although these contracts may be only marginally more efficient than traditional contracts.

Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Cordes

Northwestern Journal of International Law & Business

Investor-state contracts are regularly used in low- and middle-income countries to grant concessions for land-based and natural resource investments, such as agricultural, extractive industry, forestry, or renewable energy projects. These contracts are rarely negotiated in the presence of, or with meaningful input from, the people who risk being adversely affected by the project. This practice will usually risk violating requirements for meaningful consultation, and, where applicable, free, prior and informed consent (FPIC), and is particularly concerning when the investor-state contract gives the investor company rights to lands or resources over which local communities have legitimate claims.

This article explores how …

Stay In The Fight With Civility And Professionalism, David Spratt

Scholarly Articles in Law Reviews & Journals

No abstract provided.

Promise, Agreement, Contract, Gregory Klass

Georgetown Law Faculty Publications and Other Works

It is natural to wonder about contract law’s relationship to the morality of promises and agreements. This Chapter distinguishes two ways to conceive of that relationship. First, parties’ agreement-based moral obligations might figure into the explanation of contract law—into an account of its functions or justifications. Contract law might serve to enforce parties’ first-order performance obligations, to enforce second-order remedial obligations, to support the culture of making and keeping agreements more generally, or at least to do no harm to that culture or to people’s ability to act morally. Second, contract can be understood as the legal analog to promise. …

The Myth Of Optimal Expectation Damages, Theresa Arnold, Amanda Dixon, Madison Sherrill, Mitu Gulati

Faculty Scholarship

A much-debated question in contract law scholarship is what the optimal measure of damages for breach should be. The casebook answer-drawing from the theory of efficient breach-is expectation damages. This standard answer, which was a major contribution of the law and economics field, has come under attack by theoreticians within that field itself. To shed an empirical perspective on the question, we look at data on the types of damages provisions parties contract/or themselves in international debt contracts. Specifically, we examine issuer call provisions, which are economically equivalent to damages for prepayment, yet not viewed as legally problematic in the …

Lying And Cheating, Or Self-Help And Civil-Disobedience?, Aditi Bagchi

Faculty Scholarship

May poor sellers lie to rich buyers? This article argues that, under limited circumstances, sellers may indeed have a license to lie about their goods. Where sellers are losers under unjust background institutions and they reasonably believe that buyers have more than they would under just institutions, lies that result in de minimum transfers can be regarded as a kind of self-help. More generally, what we owe each other in our interpersonal interactions depends on the institutional backdrop. Consumer contract law, including its enforcement regimes, should recognize the social and political contingency of sellers’ obligations to buyers. In other contexts, …

Interpreting Contracts In A Regulatory State, Aditi Bagchi

Faculty Scholarship

Some scholars would limit courts to the text of written agreements when interpreting contracts on the theory that parties meant what they said, and said what they meant. Other scholars would have courts take into account the factual context surrounding contract formation. Both sides of this debate assume that contract interpretation is largely limited to reconstructing contracting parties’ intentions.

This assumption is mistaken. Since the overturning of Lochner v New York, contracting parties no longer have exclusive authority over contracts. State authority to regulate contract came at the expense of unbridled private authority. A more limited conception of contracting …

Short History Of The Choice-Of-Law Clause, John F. Coyle

University of Colorado Law Review

In the field of conflict of laws, private actors are generally granted the power to choose the law to govern their contracts. This is the doctrine of party autonomy. In recent years, this doctrine has been the subject of several excellent histories that draw upon judicial opinions, scholarly writings, and legislative enactments to chronicle changing attitudes toward party autonomy over time. A moment's reflection, however, reveals that judges, scholars, and legislatures are not the most important actors in this story. The true protagonists are the contracting parties who write choice-of-law clauses into their agreements, without which there would be no …

Learned Hand And The Objective Theory Of Contract Interpretation, Daniel P. O'Gorman

Faculty Scholarship

No abstract provided.

One-Legged Contracting, Ian Ayres, Gregory Klass

Georgetown Law Faculty Publications and Other Works

This response to Robin Bradley Kar & Margaret Jane Radin, Pseudo-Contract and Shared Meaning Analysis, 132 Harv. L. Rev. 1135 (2019), makes three broad points. It criticizes as arbitrary and essentializing Kar and Radin’s insistence of shared meaning as the core of contracting. It argues that even if shared meaning were the sine qua non of contracting, their proposal fails to achieve it because it does not assure that the terms would be cooperatively communicated. And it argues that their proposed enforcement standard would in practice severely limit freedom of contract and likely reduce consumer welfare. There is a …

Contractual Communication, Lawrence B. Solum

Georgetown Law Faculty Publications and Other Works

In this Response, I will investigate the foundations of both shared and unshared meaning in legal communication. Part I takes a step back from contractual communication and offers a preliminary sketch of a general model of legal communication; the sketch draws on speech act theory and the work of Paul Grice, extending and modifying many of the insights developed by Kar and Radin. Part II turns to contractual communication, differentiating distinct “situations of contractual communication” and interrogating Kar and Radin’s Shared Meaning Analysis. Part III interrogates Kar and Radin’s distinction between “contract” and “pseudo-contract.” The conclusion of the Response briefly …

Arbitration And The Federal Balance, Alyssa King

Indiana Law Journal

Mandatory arbitration of statutory rights in contracts between parties of unequal bargaining power has drawn political attention at both the federal and state level. The importance of such reforms has only been heightened by the Supreme Court’s expansion of preemption under the FAA and of arbitral authority. This case law creates incentives for courts at all levels to prefer expansive readings of an arbitration clause. As attempts at federal regulation have stalled, state legislatures and regulatory agencies can expect to be subject to renewed focus. If state legislatures cannot easily limit arbitrability, an alternative is to try reforms that seek …

Bitcoin: Order Without Law In The Digital Age, John O. Mcginnis, Kyle Roche

Indiana Law Journal

Modern law makes currency a creature of the state and ultimately the value of its currency depends on the public’s trust in that state. While some nations are more capable than others at instilling public trust in the stability of their monetary institutions, it is nonetheless impossible for any legal system to make the pre-commitments necessary to completely isolate the governance of its money supply from political pressure. This proposition is true not only today, where nearly all government institutions manage their money supply in the form of central banking, but also true of past private banking regimes circulating their …

The Internet Of Bodies, Andrea M. Matwyshyn

William & Mary Law Review

This Article introduces the ongoing progression of the Internet of Things (IoT) into the Internet of Bodies (IoB)—a network of human bodies whose integrity and functionality rely at least in part on the Internet and related technologies, such as artificial intelligence. IoB devices will evidence the same categories of legacy security flaws that have plagued IoT devices. However, unlike most IoT, IoB technologies will directly, physically harm human bodies—a set of harms courts, legislators, and regulators will deem worthy of legal redress. As such, IoB will herald the arrival of (some forms of) corporate software liability and a new legal …