The Yale Law Journal

Contracts

Forum

Contract and (Tribal) Jurisdiction

Matthew L.M. Fletcher

Consider two commercial contracts. The first requires customers to waive their rights to bring class actions against large businesses in favor of private arbitration. The second requires a reservation leaseholder to adjudicate disputes in tribal court. Both contracts require dispute resolution in fo…

Forum

Ritchie v. Rupe and the Future of Shareholder Oppression

James Dawson

In 1988, the Texas Court of Appeals held in Davis v. Sheerin that minority shareholders in close corporations are entitled to a buy-out of their shares if they are “oppressed” by the majority shareholders.1 Davis synthesized other states’ case law in order to arrive at a two-part test …

Note

Lawmaking in the Shadow of the Bargain: Contract Procedure as a Second-Best Alternative to Mandatory Arbitration

Charles W. Tyler


122 Yale L.J. 1560 (2013).

In consumer and employment arbitration, companies have more freedom to choose dispute resolution procedures than they do in courts. Specifically, companies may, through their form contracts, require their customers and employees to waive their rights to present certain form…

Article

Regulating Opt-Out: An Economic Theory of Altering Rules

Ian Ayres


121 Yale L.J. 2032 (2012)
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Whenever a rule is contractible, the law must establish separate rules governing how private parties can contract around the default legal treatment. To date, contract theorists have not developed satisfying theories for how to set “altering rules,” the rules that establish…

Forum

Off-Contract Harms: The Real Effect of Liberal Rescission Rights on Contract Price

Michael Aikins

Introduction

In their recent article in The Yale Law Journal, Professors Richard R.W. Brooks and Alexander Stremitzer make the case for a liberal allowance of rescission and restitution—an “off the contract” remedy that allows a party to a contract to rescind following breach by a counterparty and …

Article

Remedies On and Off Contract

Richard R.W. Brooks & Alexander Stremitzer

120 Yale L.J. 690 (2011). 

Liberal allowance of rescission followed by restitution has, for centuries, unsettled legal authorities who fear it as a threat to commercial order or other normative values. Responding to these fears, authorities have limited the ease with which rescission may be elected…

Article

Contract, Race, and Freedom of Labor in the Constitutional Law of "Involuntary Servitude"

James Gray Pope

119 Yale L.J. 1474 (2010). 

The Supreme Court has yet to adopt and apply a standard for assessing labor rights claims under the Involuntary Servitude Clause. This Article suggests that one may be found in the leading decision of Pollock v. Williams (1944), which contains the Court’s most thorough d…

Article

Strategic Vagueness in Contract Design: The Case of Corporate Acquisitions

Albert Choi & George Triantis

119 Yale L.J. 848 (2010). 

The unprecedented and unanticipated economic and financial shocks of the past couple of years have led parties to look for contractual escapes from deals. As the current crisis works its way through our economic system, however, attention will be shifted from the collaps…

Review

Contract Interpretation Redux

Alan Schwartz & Robert E. Scott

119 Yale L.J. 926 (2010). 

Contract interpretation remains the largest single source of contract litigation between business firms. In part this is because contract interpretation issues are difficult, but it also reflects a deep divide between textualist and contextualist theories of interpretatio…

Note

Privatizing Democracy: Promoting Election Integrity Through Procurement Contracts

Jennifer Nou

118 Yale L.J. 744 (2009).

 

Voting machine failures continue to plague American elections. These failures have fueled the growing sense that private machine manufacturers must be held accountable. This Note argues that, because legitimacy externalities and resource disparities across election juri…

Article

Contracting for Cooperation in Recovery

Gregory Klass

117 Yale L.J. 2 (2007).

There is a longstanding debate about whether courts should enforce contract terms purporting to limit the parties’ liability for fraud. It is less-often noticed that many contracts are designed to incorporate fraud liability by requiring one party to make representations abo…

Forum

Who Chooses and Who Gets What: Efficient Breach and Efficient Performance Hypotheses

Richard R.W. Brooks

The efficient breach hypothesis is often taken as formal support for the Holmesian optional contract approach, which gives promisors the right to perform or pay. However, the efficient breach hypothesis doesn’t speak directly of rights (and indeed a promisor’s power to perform or pay would work …

Forum

Some Reflections on Richard Brooks’s “Efficient Performance Hypothesis”

Jules L. Coleman

Though falling comfortably in the genre of economic analysis of contract, Professor Brooks’s essay nevertheless provides some relief from the excesses of economic theorizing about the law. I will confine my comments to the conceptual and normative features of the economic analysis of contract, lea…

Forum

A Critique of the Efficient Performance Hypothesis

Jody S. Kraus

The classic economic justification of contract law’s default remedy of expectation damages is grounded on the efficient breach hypothesis: that promisors should be permitted and encouraged to breach when the net gains from breach exceed the net gains from performance. Expectation damages ensure th…

Forum

What the Efficient Performance Hypothesis Means for Contracts Scholarship

Eric A. Posner

The standard contract remedy of expectation damages treats a promissory obligation as an option: the promisor has the option to breach or pay damages equal to the difference between the value of performance and the contract price. In his interesting essay recently published in this Journal, Richard …

Forum

What Efficiency Demands: The Efficient Performance Hypothesis Defended

Richard R.W. Brooks

I appreciate the comments and thoughtful engagement by Professors Coleman, Kraus, and Posner on my essay “The Efficient Performance Hypothesis.” A few words of clarification may be helpful with regard to these comments, as well as the original essay. Let me begin with Professor Kraus’s comment…

Forum

Executives Do Not Need Waivers and Companies Should Not Offer Them: A Response to Mark Kressel

Victor J. Rocco

Although Mark Kressel’s proposal is novel, provocative, and even enticing, it is ultimately unnecessary and unworkable to suggest that a corporation and its high-level executives should agree, at the very commencement of their relationship, to waive the corporation’s attorney-client privilege wh…

Note

Treaties as Contracts: Textualism, Contract Theory, and the Interpretation of Treaties

Curtis J. Mahoney

116 Yale L.J. 824 (2007)

With the nation's treaty obligations proliferating and foreign affairs cases taking up a growing share of the Supreme Court's docket, it is surprising how undertheorized the field of treaty interpretation remains. To fill this void, some have suggested that textualism, which …

Essay

The Efficient Performance Hypothesis

Richard R.W. Brooks

116 Yale L.J. 568 (2006)

Notable American jurists and scholars have advanced an approach to contract enforcement that would render breach legally and morally uncontestable, assuming compensation follows. Much of the justification for this endeavor has rested upon claims of judicial and economic effic…

Note

Contractual Waiver of Corporate Attorney-Client Privilege

Mark A. Kressel

116 Yale L.J. 412 (2006)

A corporate director, sued in her individual capacity in connection with corporate malfeasance, often seeks to raise the defense that she relied on the advice of the corporation's counsel that the proposed course of conduct was legal. A litigation impasse may arise, however, …

Article

Anticipating Litigation in Contract Design

Robert E. Scott & George G. Triantis

115 Yale L.J. 814 (2006)

Contract theory does not address the question of how parties design contracts under the existing adversarial system, which relies on the parties to establish relevant facts indirectly by the use of evidentiary proxies. In this Article, we advance a theory of contract design i…

Note

More Equal than Others: Defending Property-Contract Parity in Bankruptcy

Blake Rohrbacher

114 Yale L.J. 1099 (2005)

Contracts create property; contractual rights and obligations are property. In bankruptcy, however, this aspect of nonbankruptcy law is often not recognized. This Note argues that bankruptcy law and policy should recognize the property in contract. This Note examines instanc…

Article

Contract and Collaboration

Daniel Markovits

113 Yale L.J. 1417 (2004)

Promises and contracts establish relations among the persons who engage them, and these relations lie at the center of persons' moral and legal experience of one another. But the most prominent accounts of these practices nevertheless remain firmly individualistic, seeking …

Article

Contract Theory and the Limits of Contract Law

Alan Schwartz & Robert E. Scott

113 Yale L.J. 541 (2003)

This Article sets out a normative theory to guide decisionmakers in the regulation of contracts between firms. Commercial law for centuries has drawn a distinction between mercantile contracts and others, but modern scholars have not systematically pursued the normative impli…

Note

Limits of Competition: Accountability in Government Contracting

Janna J. Hansen

112 Yale L.J. 2465 (2003)

Government contracts with private providers for the supply of goods and services have grown in number and magnitude over the last several decades. Elected officials and other policymakers choose to privatize government functions for a variety of reasons. Politicians may wan…

Note

Unions and the Duty of Good Faith in Employment Contracts

Aditi Bagchi

112 Yale L.J. 1881 (2003)

Some American scholars of law and economics have expressed dismay at the anticompetitive and illiberal body of legal doctrine that is labor law. Their respondents, often in other fields if not other countries, have defended unions and the laws that support them on both econ…

Essay

Economic Analysis of Contract Law After Three Decades: Success or Failure?

Eric A. Posner

112 Yale L.J. 829 (2003)

Modern economic analysis of contract law began about thirty years ago and, many scholars would agree, has become the dominant academic style of contract theory. Traditional doctrinal analysis exerts less influence than it did prior to 1970 and enjoys little prestige. Philosop…

Response

Valuing Modern Contract Scholarship

Ian Ayres

112 Yale L.J. 881 (2003)

In sum, Posner has leveled three different criticisms at the modern economic analysis of contracts: a descriptive critique that the scholarship fails to describe or predict the content of current law, a normative critique that the scholarship fails to "provide a solid basis f…

Response

In That Case, What Is the Question? Economics and the Demands of Contract Theory

Richard Craswell

112 Yale L.J. 903 (2003)

In his thoughtful essay, Eric Posner asks whether economic analysis has failed contract law and suggests that it has. Not surprisingly, I hold a different opinion. That is, while I agree with much of what Posner says about particular economic findings, I disagree about what …

Essay

What Happened to Property in Law and Economics?

Thomas W. Merrill & Henry E. Smith

111 Yale L.J. 357 (2001)

Property has fallen out of fashion. Although people are as concerned as ever with acquiring and defending their material possessions, in the academic world there is little interest in understanding property. To some extent, this indifference reflects a more general skepticism…

Article

Currency Policies and Legal Development in Colonial New England

Claire Priest

110 Yale L.J. 1303 (2001)

This Article presents a new interpretation of the relation of law to economic development in colonial New England. Prior legal historical scholarship has focused almost exclusively on judicial decisionmaking, emphasizing judges' role in adapting the law in some optimal way …

Comment

Baby Contracts

Chi Steve Kwok

110 Yale L.J. 1287 (2001)


 

Article

The Essential Role of Organizational Law

Henry Hansmann & Reinier Kraakman

110 Yale L.J. 387 (2000)

In every developed market economy, the law provides for a set of standard-form legal entities. In the United States, these entities include, among others, the business corporation, the cooperative corporation, the nonprofit corporation, the municipal corporation, the limited …