Contracts Commons^™

Two Forms Of Formalism In Contract Law, Gregory Klass

Cardozo Law Review

Formalism in contract interpretation has had many defenders and many critics. What lawmakers need, however, is an account of when formalism works and when it does not. This Article addresses that need by providing a general theory of contract exposition and differentiating between two forms of formalism in contract law. Formalities effect legal change by virtue of their form alone, thereby obviating interpretation. Examples include “as is,” the seal, and sometimes contract boilerplate. Evidentiary formalism, in distinction, limits the evidence that goes into interpretation. Plain meaning rules are an example of evidentiary formalism. This Article provides a detailed analysis of …

A One-Egg Wonder: Working To Cure Judicial Gender Bias And Increase Access To Pre-Embryos For Infertile Parties, Nicole Marks Kaufman

Cardozo Law Review

The first live birth of a child conceived from in vitro fertilization (“IVF”) happened in 1978. Today, over eight million children have been born through IVF procedures. The first dispute over the resulting pre-embryos was in 1990 when the Tennessee Supreme Court outlined a balancing approach with a presumption favoring non-use of the pre-embryos for courts to follow when resolving these matters. Numerous states have taken differing approaches—some have taken a contractual approach, others an approach requiring contemporaneous mutual consent before there can be a departure from the status quo, and very few state legislatures have directly addressed how to …

How To Use The Restatement Of Consumer Contracts: A Guide For Judges, Ian Ayres, Gregory Klass

Georgetown Law Faculty Publications and Other Works

In the absence of major legislation or regulatory action, U.S. consumers will continue to look to courts and the common law for protection when businesses engage in unfair and deceptive contracting practices. In May 2022, the American Law Association approved the Restatement of the Law, Consumer Contracts. This new Restatement provides a valuable resource for courts tasked with deciding the legal effects of standard terms that businesses draft and consumers do not read. This essay identifies six pieces of the new Restatement we believe courts should pay special attention to and discusses the importance of each. It also charts several …

Confirmation Notes In The English Common Law, Ilias Bantekas

Pace Law Review

Confirmation notes allow parties to a final or near-final contract to specify the terms of their agreement and thus render it binding. As a result, the note may take the form of an offer or acceptance or, if so specified by the parties, it may just as well serve as the contract. Where the note does not serve as a contract, the receiver is presumed to have accepted its terms if it has not rejected within reasonable time. A confirmation note that adds, modifies or limits the parties’ original (usually oral) agreement has no effect, unless the receiver unjustifiably delays …

The New Social Contracts, Andrew Keane Woods Professor Of Law

Vanderbilt Law Review

Contracts rule our digital world. Platform terms of service determine speech rights, privacy rights, and much more. This is no accident—from the very beginning, the U.S. model of internet governance was explicitly built around private ordering. In this context, it is worth asking what contract law and contract scholarship have to say about the public harms of digital dealmaking.

The answer, quite surprisingly, is: not much. To be sure, the rise of the digital economy has generated over two decades of sustained scholarship and several huge national reform efforts aimed at updating contract law. But this work has largely focused …

Commercial Boilerplate: A Review And Research Agenda, Robert E. Scott, Stephen J. Choi, Mitu Gulati

Faculty Scholarship

Boilerplate contracts have long fascinated legal scholars. But the focus has been largely on consumer contracts, with the debate centered on the question of whether take-it-or-leave-it mass-produced forms imposed on consumers by large corporations should be treated as contracts or as a problem in regulation. By contrast, commercial boilerplate — the standard forms used in transactions for corporate or sovereign bonds or merger agreements — has traditionally received little attention. The assumption has been that form contracts among sophisticated parties may differ in form but not in substance from bespoke contracts between business entities. Yet a growing body of scholarship …

A "Profoundly Contractarian Predisposition": Delaware Courts Decide Recent Drafting Disputes By Limiting Their Review To Four Corners Of Contracts, Robert S. Reder, Kathleen E. Sharkey

Vanderbilt Law School Faculty Publications

In the decisions discussed herein, both the Delaware Supreme Court ("Supreme Court") and the Delaware Court of Chancery ("Chancery Court") reaffirmed the Delaware judiciary's commitment to honoring contract language, whenever possible, to settle contractual disputes. Absent irreconcilable ambiguity, no coloring outside the lines will be considered. The goal generally is to reflect the intent of the parties while avoiding absurd or illogical results. Ironically, in each of these cases, better drafting could have ensured the parties were on the same page: " In Arwood v. AW Site Services, Vice Chancellor Slights, confirming Delaware's status as "'more contractarian' than most states," …

A Short History Of The Interpretation-Construction Distinction, Gregory Klass

Georgetown Law Faculty Publications and Other Works

This document collects for ease of access and citation three of my posts on the New Private Law Blog, which chart the conceptual history of the interpretation-construction distinction. The posts begin with Francis Lieber’s 1939 introduction of the concepts, then describes Samual Williston’s 1920 account of the distinction in the first edition of Williston on Contracts, and concludes with Arthur Linton Corbin’s 1951 reconceptualization in the first edition of Corbin on Contracts. The posts identify two different conceptions of the distinction. Under the first (Lieber and Williston), construction supplements interpretation. Under the second (Corbin), the two activities complement one …

The Sources And Consequences Of Disputes Over Contractual Meaning, Randy D. Gordon

Faculty Scholarship

With some frequency, parties agree to the particular words used in a contract they sign, only to later disagree as to the meaning of those words and their legal effect. That is, they each assent to something, but that “something” is something different for each of them. In this Article, I first categorize and trace the sources of recurring points of disagreement as a matter of language and linguistics. Then, I look at the consequences of a dispute that leads a fact finder to conclude that the parties genuinely did not agree to the same thing, which is to say …

Contracting For Social Change, Adam N. Eckart

University of Miami Business Law Review

Throughout history, social change has often been shaped by high profile legislation and through high-stakes litigation. But social change can also be spurred on through private contract, including through the agreements businesses and individuals make with each other every day. Transactional attorneys can promote social change through drafting techniques and choices, including narrative and storytelling techniques, and can use such drafting techniques in order to 1) write better and more complete agreements that are more consistent with business-led social activism already taking place, and 2) influence society by forcing counterparties to evolve on social issues, change industry practice, or foster …

Keeping Your Eye On The Esg Sustainable Development Ball, Richard J. Sobelsohn

Dickinson Law Review (2017-Present)

Environmental, Social, and Governance (“ESG”) mandates were originally aspirational sound-bites, but now they have become a part of many companies’ mandates. Most recently with some backlash against ESG directives, most organizations are still complying with their original goals, because the economic arguments for having an ESG protocol is still valid. This article discusses what ESG is, how it relates to different types of companies, and most importantly, what legal issues pertain to it.

This Article examines how ESG guidelines pertain to different types of entities, and how these protocols affect everything from contract drafting, construction of a property, operations and …

Covid, Contracts, And Colleges, John K. Setear

West Virginia Law Review

No abstract provided.

Online Disinhibited Contracts, Wayne R. Barnes

Pepperdine Law Review

There have been at least two dominant forces at work in the realm of consumer contracting over the past several decades. One has been the rise and domination of the standard form contract (whereby merchants contract with consumers via the use of standardized, boilerplate terms and conditions that consumers do not read or understand). The second force has been the rise of e-commerce and the purchase of goods and services via websites and other online platforms, and the use of “wrap” formation methodology (whereby merchants obtain consumer assent to the online terms and conditions via the consumer’s informal click, scroll, …

Online Disinhibited Contracts, Wayne R. Barnes

Faculty Scholarship

There have been at least two dominant forces at work in the realm of consumer contracting over the past several decades. One has been the rise and domination of the standard form contract (whereby merchants contract with consumers via the use of standardized, boilerplate terms and conditions that consumers do not read or understand). The second force has been the rise of e-commerce and the purchase of goods and services via websites and other online platforms, and the use of “wrap” formation methodology (whereby merchants obtain consumer assent to the online terms and conditions via the consumer’s informal click, scroll, …

Against Gap-Filling, Noah C. Chauvin

Cardozo Law Review de•novo

Legal scholars delight in gap-filling. They frequently claim that their works have identified a gap in the literature and to have filled (or begun filling) that gap. However, all too often, these same papers fail to explain why the gap needed to be filled at all. Indeed, despite a robust tradition of meta-scholarship, the legal literature is largely devoid of a theory of academic gap-filling. This essay fills that gap, arguing that gap-filling for the sake of gap-filling is an error for three interconnected reasons. First, gaps might exist for a good reason. Second, concern with gap-filling is often a …

Beyond Discrimination: Market Humiliation And Private Law, Hila Keren

University of Colorado Law Review

Market humiliation is a corrosive relational process to which the law repeatedly fails to respond due to the law’s heavy reliance on the discrimination paradigm. In this process, providers of market resources, from housing and work to goods and services, use their powers to reject or mistreat other market users due to their identities. They thus cause users severe harm and deprive them of dignified participation in the marketplace. The problem has recently reached a peak. The discussion in 303 Creative v. Elenis indicates that the Supreme Court might legitimize market humiliation by granting private providers broad free speech exemptions …

Preparing Future Lawyers To Draft Contracts And Communicate With Clients In The Era Of Generative Ai, Kristen Wolff

Transactions: The Tennessee Journal of Business Law

No abstract provided.

Ok, Computer: Harnessing Ai In Contracts To Change How Our Students Will Practice And How We Will Teach, Mark E. Need

Transactions: The Tennessee Journal of Business Law

No abstract provided.

Balancing Predictability With Flexibility In Contract Negotiation And Drafting, Tahirih V. Lee

Transactions: The Tennessee Journal of Business Law

No abstract provided.

The Uniform Restrictive Agreement Act In A Vast Sea Of Strange Reform: An Introduction, Rachel Arnow-Richman

UF Law Faculty Publications

No abstract provided.

The Future Of Unfair Terms Regulation In Commercial Contracts, Marcus Moore

All Faculty Publications

What is the future of unfair contract terms regulation? To date, regimes of unfair terms regulation have shared several key operational features, but have diverged on the question of the scope of regulation: some regimes focus on consumer contracts or exemption clauses, while other regimes include all commercial standard form contracts. Both domestic and transnational commerce would be well served by broader harmonisation of unfair terms regulation. But divergence on the basic question of the scope of regulation has hindered such harmonisation. Some important recent developments suggest a possible trend towards regulation of a scope which includes all standard form …

Contract-Wrapped Property, Danielle D'Onfro

Scholarship@WashULaw

For nearly two centuries, the law has allowed servitudes that “run with” real property while consistently refusing to permit servitudes attached to personal property. That is, owners of land can establish new, specific requirements for the property that bind all future owners—but owners of chattels cannot. In recent decades, however, firms have increasingly begun relying on contract provisions that purport to bind future owners of chattels. These developments began in the context of software licensing, but they have started to migrate to chattels not encumbered by software. Courts encountering these provisions have mostly missed their significance, focusing instead on questions …

"Reverse Divisibility" And "Subsequent Modification": Expanding The Scope Of Justified Non-Performance In Multiple Contract Situations, Gregory S. Crespi

Faculty Journal Articles and Book Chapters

Parties to a contract sometimes invoke divisibility arguments in an attempt to recharacterize the contract as being two or more separate contracts. This is often done in order to limit the justified non-performance consequences of a breach of contract on their part. This short article considers the often-overlooked symmetrical possibility of a non-breaching party attempting to recharacterize two or more facially separate but closely related contracts as a single contract, expanding the scope of their justified non-performance rights after one contract is breached. I describe two complementary arguments justifying such a single-contract recharacterization of the relationship as the "reverse divisibility" …

Representations & Warranties, Fraud, And Risk Shifting: An Analytical Framework, Steven L. Schwarcz

Faculty Scholarship

Do violations of contractual representations and warranties (“R&Ws”) merely shift risk by giving rise to contract-breach damages, or can they also give rise to fraud claims? This question is at the heart of numerous lawsuits, including billions of dollars of securitization-related litigation. Many agreements governing the issuance of securities in these transactions limit R&W breach claims to a sole contractual remedy—curing the violation or repurchasing nonconforming loans that caused the violation. Although parties making the R&Ws argue that this sole remedy should adequately shift risk, investor plaintiffs contend that it insufficiently shifts the risk if the violations are extensive. Plaintiffs …

Reflections On The Implied Covenant Of Good Faith And Fair Dealing Under Delaware Law: The Case Of Sandbagging, Mark J. Loewenstein

Publications

No abstract provided.

Midstream Contract Interpretation, Alan Schwartz, Simone M. Sepe

Notre Dame Law Review

This Article makes two original contributions to the contract interpretation and renegotiation literatures. First, we introduce an underexplored cause of renegotiation failure: party uncertainty regarding the type of court that will interpret their contract. Parties may predict differently how the applicable court will weigh facts, apply legal rules, or interpret contracts. When parties disagree regarding the court’s interpretive practices, they will assess their expected litigation payoffs differently. This could cause parties to litigate transactions rather than complete them, even when the parties agree on the economic parameters. Litigators know that differing predictions about what a court will do can impede …

After Ftx: Can The Original Bitcoin Use Case Be Saved?, Mark Burge

Faculty Scholarship

Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that …

Exit Engineering, Rachel Landy

Articles

How do business lawyers create value? For nearly forty years, scholars have conceptualized the business lawyer as a “transaction cost engineer” who helps contracting parties efficiently break negotiation stalemates to create more valuable deals. This theory provides meaningful insights about sophisticated corporate law practice, where outside lawyers parachute in to make one-off deals happen. However, it fails to explain the behavior of startup lawyers, who develop long-term relationships with their clients and counsel them on seemingly routine matters, well before a major transaction materializes. These lawyers are not just transaction cost engineers, they are exit engineers. This Article offers a …

Stopping Runs In The Digital Era, Luís C. Calderón Gómez

Articles

Bank runs, and the financial crises they catalyze and amplify, are incredibly costly-to individuals, families, society, and the economy writ large. Banking regulation has, for the most part, protected us from traditional bank runs for the last ninety years. However, as we saw in the devastating 2008 financial crisis, bank runs can still occur in lightly regulated or opaque segments of the financial sector.

The recent crypto market downturn dramatically forewarned regulators of the potential and significant risks that novel assets could pose to our financial system's stability. In particular, a novel, systemically important asset (stablecoins) revealed its vulnerability to …

We Are Never Getting Back Together: A Statutory Framework For Reconciling Artist/Label Relationships, Harrison Simons

Washington Law Review Online

Taylor Swift could tell you a thing or two about record label drama. Artists like Swift who want to break into the big leagues and top the charts must rely on record labels’ deep pockets and institutional knowledge to do so. But artists, especially young ones, are often asked to sign deals with labels that leave them with little control over their careers. For many, the risk is worth the reward. However, many others come to regret their decision, with careers that languish or sputter out in label purgatory. Anyone with an ear for the music industry knows that artist-label …