Law and Economics Commons^™

Laying Down The "Brics": Enhancing The Portability Of Awards In International Commercial Arbitration, Benjamin C. Mccarty

Benjamin C McCarty

The drafters of the 1958 New York Convention intended Article V(2)(b) to be interpreted narrowly, and while most pro-arbitration national courts do maintain narrowly defined areas of public policy that are sufficient for refusal of the recognition and enforcement of a foreign arbitral award, this is not always the case. Developing states and jurisdictions that maintain corrupt or inefficient judicial systems have shown a greater willingness to invoke the public policy exception for a broader, amorphous variety of reasons. This phenomenon has created a sense of unpredictability among international investors, arbitrators, and business executives as to the amount of deference …

Gandhi’S Prophecy: Corporate Violence And A Mindful Law For Bhopal, Nehal A. Patel

Nehal A. Patel

AbstractOver thirty years have passed since the Bhopal chemical disaster began,and in that time scholars of corporate social responsibility (CSR) havediscussed and debated several frameworks for improving corporate responseto social and environmental problems. However, CSR discourse rarelydelves into the fundamental architecture of legal thought that oftenbuttresses corporate dominance in the global economy. Moreover, CSRdiscourse does little to challenge the ontological and epistemologicalassumptions that form the foundation for modern economics and the role ofcorporations in the world.I explore methods of transforming CSR by employing the thought ofMohandas Gandhi. I pay particular attention to Gandhi’s critique ofindustrialization and principle of swadeshi (self-sufficiency) …

Contracts, Persons And Property: A Tribute To Margaret Jane Radin, Ruth L. Okediji

Michigan Telecommunications & Technology Law Review

In 2011, the United States was only just beginning to emerge from what some claimed to be the most significant economic crisis since the Great Depression. The devastation wrought by unregulated subprime mortgages unfolded as a political, legal, financial and social tragedy. Millions of homeowners had purchased homes for amounts they most certainly could not afford, with terms and conditions written on documents they even more certainly had never read. Many of those most severely affected were, as one might expect, racial minorities and underrepresented groups, but plenty of other members of society were also caught in the intricately woven …

With Marriage On The Decline And Cohabitation On The Rise, What About Marital Rights For Unmarried Partners?, Lawrence W. Waggoner

Articles

This article draws attention to a cultural shift in the formation of families that has been and is taking place in this country and in the developed world. Part I uses recent government data to trace the decline of marriage and the rise of cohabitation in the United States. Between 2000 and 2010, the population grew by 9.71 %, but the husband and wife households only grew by 3.7%, while the unmarried couple households grew by 41.4%. A counter-intuitive finding is that the early 21st century data show little correlation between the marriage rate and economic conditions. Because of the …

Health Care And The Balance Billing Problem: The Solution Is The Common Law Of Contracts And Strengthening The Free Market For Health Care., George A. Nation Iii

George A Nation III

A large and growing group of insured patients is being unfairly burdened by hospitals’ exorbitant chargemaster prices. The burden is brought to bear on these patients through a process known as balance billing. For a variety of reasons hospital networks are becoming narrower as hospital systems contract with fewer insurers, and as a result, more and more patients are receiving balance bills. The practice of balance billing puts upward pressure on health care prices in general. That is, this practice leads to higher prices across the board for the uninsured, the out-of-network insured and even the in-network insured. This article …

The Moral Hazard Of Contract Drafting, Eric A. Zacks

Florida State University Law Review

This Article identifies and examines the principal-agent problem as it arises in the context of contract preparation. The economic agency relationship, as it may be understood to exist for contract drafting, provides a superior framework for understanding and reforming the inability of the non-drafting party (the principal) to control the drafting party (the agent). As an economic agent, the drafting party faces a moral hazard when preparing the contract because of the differing interests of the parties as well as the information and control asymmetries that exists. For example, the use of standard form contracts in consumer transactions is an …

Tortious Interference And The Law Of Contract: The Case For Specific Performance Revisited, Deepa Varadarajan

Deepa Varadarajan

What is the role of contract law in remedying breach? The question of the appropriate legal remedy, specific performance versus money damages, has provided adequate fodder for three decades of debate in the law and economics discourse. In the legal discipline at large, the topic has spurred centuries of debate, as illustrated by Oliver Wendell Holmes's famous line: “The only universal consequence of a legally binding promise is, that the law makes the promisor pay damages if the promised event does not come to pass.” Holmes's approach to contractual remedy would evolve during the latter half of the twentieth century …

An Approach To The Regulation Of Spanish Banking Foundations, Miguel Martínez

Miguel Martínez

The purpose of this paper is to analyze the legal framework governing banking foundations as they have been regulated by Spanish Act 26/2013, of December 27th, on savings banks and banking foundations. Title 2 of this regulation addresses a construct that is groundbreaking for the Spanish legal system, still of paramount importance for the entire financial system insofar as these foundations become the leading players behind certain banking institutions given the high interest that foundations hold in the share capital of such institutions.

Consumer Protection Initiatives In The Eu Mortgage Market: A Behavioral Economics Based Critique And Proposal, 25 Temp. Int'l & Comp. L.J. 1 (2011), Debra Pogrund Stark, Jessica M. Choplin

Debra Pogrund Stark

No abstract provided.

Contrato, Operación Económica Y Equilibrio Contractual, Carlos Tamani

Carlos Tamani

Cloud Computing, Contractibility, And Network Architecture, Christopher S. Yoo

All Faculty Scholarship

The emergence of the cloud is heightening the demands on the network in terms of bandwidth, ubiquity, reliability, latency, and route control. Unfortunately, the current architecture was not designed to offer full support for all of these services or to permit money to flow through it. Instead of modifying or adding specific services, the architecture could redesigned to make Internet services contractible by making the relevant information associated with these services both observable and verifiable. Indeed, several on-going research programs are exploring such strategies, including the NSF’s NEBULA, eXpressive Internet Architecture (XIA), ChoiceNet, and the IEEE’s Intercloud projects.

Broad Shareholder Value And The Inevitable Role Of Conscience, Paul D. Weitzel, Zachariah J. Rodgers

Paul D. Weitzel

This article proposes an integrative solution to the modern debate on corporate purpose, the question of whether directors and officers must solely maximize profits or whether they may consider the effects on employees, the environment or the community. Many find pure profit maximization unseemly and suggest alternative theories, typically arguing that corporations owe a duty to a broader range of stakeholders. This position is inconsistent with the case law and unnecessary to allow conscience in the board room. We resolve the issue more simply by acknowledging that the purpose of a corporation is to promote the shareholders’ interests, which includes …

Commodification And Contract Formation: Placing The Consideration Doctrine On Stronger Foundations

David Gamage

Under the traditional consideration doctrine, a promise is only legally enforceable if it is made in exchange for something of value. This doctrine lies at the heart of contract law, yet it lacks a sound theoretical justification – a fact that has confounded generations of scholars and created a mess of case law. This paper argues that the failure of traditional justifications for the doctrine comes from two mistaken assumptions. First, previous scholars have assumed that anyone can back a promise with nominal consideration if they wish to do so. We show how social norms against commodification limit the availability …

Buying Time In Spain: The Spanish Law Of Installment Sales, John M. Steadman

Georgia Journal of International & Comparative Law

No abstract provided.

On The Rise Of Shareholder Primacy, Signs Of Its Fall, And The Return Of Managerialism (In The Closet), Lynn Stout

Lynn A. Stout

In their 1932 opus "The Modern Corporation and Public Property," Adolf Berle and Gardiner Means famously documented the evolution of a new economic entity—the public corporation. What made the public corporation “public,” of course, was that it had thousands or even hundreds of thousands of shareholders, none of whom owned more than a small fraction of outstanding shares. As a result, the public firm’s shareholders had little individual incentive to pay close attention to what was going on inside the firm, or even to vote. Dispersed shareholders were rationally apathetic. If they voted at all, they usually voted to approve …

Law And Economic Exploitation In An Anti-Classification Age, Hila Keren

Florida State University Law Review

Does our legal system permit the economic exploitation of extreme vulnerability? Focusing on predatory housing loans—a thriving business at the dawn of the twenty-first century—this Article argues that the answer in most cases is yes. Under an individualistic neoliberal paradigm, borrowers are held liable for their contracts, even if they were targeted with predatory practices. Further, borrowers’ attempts to resort to antidiscrimination law, and frame their exploitation as “reverse redlining,” have offered no real answer. An important yet undertheorized explanation for this problem is the impact of the Supreme Court’s anti-classification jurisprudence on lower courts. In an anti-classification age, even …

Concept And Contract In The Future Of International Law, John Linarelli

Scholarly Works

This is an article written for a symposium on Joel Trachtman’s book, The Future of International Law. I first deal with the contractarian features of Trachtman’s approach to understanding international law. Using the tools of new institutional economics and constitutional economics, Trachtman seeks to describe the features of an international legal system. This is positive political theory or at least relates substantially to the methods of positive political theory. I explore a different approach, one connecting to normative political theory. In its ambitious sense, my approach would see international law as a form of moral argument, but in its modest …

Reservations And The Cisg: The Borderland Of Uniform International Sales Law And Treaty Law After Thirty-Five Years, Ulrich G. Schroeter

Brooklyn Journal of International Law

No abstract provided.

The Common Sense Of Contract Formation, Tess Wilkinson-Ryan, David A. Hoffman

All Faculty Scholarship

What parties know and think they know about contract law affects their obligations under the law and their intuitive obligations toward one another. Drawing on a series of new experimental questionnaire studies, this Article makes two contributions.First, it lays out what information and beliefs ordinary individuals have about how to form contracts with one another. We find that the colloquial understanding of contract law is almost entirely focused on formalization rather than actual assent, though the modern doctrine of contract formation takes the opposite stance. The second Part of the Article tries to get at whether this misunderstanding matters. Is …

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 …

Mandatory Rules And Default Rules In Insurance Contracts, Tom Baker, Kyle D. Logue

All Faculty Scholarship

The economic analysis of contract law can be organized around two general questions: (1) what are the efficient or welfare-maximizing substantive rules of contract law; and (2) once those rules have been identified, when if ever should they be made mandatory and when should they be merely “default rules” that the parties can contract around if they wish? Much of contract theory over the past twenty years has been devoted to developing answers to those two questions. The same two questions can be posed with respect to the rules of insurance law. Although previous scholars have examined particular substantive doctrines …

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 …

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

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 …

Dirty Debts Sold Dirt Cheap, Dalie Jimenez

Dalie Jimenez

More than 77 million Americans have a debt in collections. Many of these debts will be sold to debt buyers for pennies, or fractions of pennies, on the dollar. This Article details the perilous path that debts travel as they move through the collection ecosystem. Using a unique dataset of 84 consumer debt purchase and sale agreement, it examines the manner in which debts are sold, oftentimes as simple data on a spreadsheet, devoid of any documentary evidence. It finds that in many contracts, sellers disclaim all warranties about the underlying debts sold or the information transferred. Sellers also sometimes …

Bubbles (Or, Some Reflections On The Basic Laws Of Human Relations), Donald J. Kochan

Donald J. Kochan

Keepings, Donald J. Kochan

Donald J. Kochan