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Deal Structure, a new paper by Cathy Hwang and Matthew Jennejohn, explains how sophisticated parties now structure increasingly complex contracts to achieve contracting’s various goals.  The article does an excellent job of explaining how today’s corporate contracts differ from the relatively straightforward contracts encountered in most contracts casebooks. 

Hwang and Jennejohn explain that parties may be able to structure their deals to nudge courts toward adopting a preferred interpretative approach. Courts facing lengthy, complex contracts must decide whether they want to adopt a textual or contextual approach.  Prior research has noted that when parties use standards, they nudge a court toward contextualism—looking outside of the four corners of the contract for interpretive clues. In contrast, rules signal to courts to use a textual approach to interpretation. That pairing—of standards with contextualism and rules with textualism—allows Hwang and Jennejohn to make a further argument: that for this pairing to work, parties need to pay attention to how they structure the provisions within their complex agreements.  For instance, if parties intend to circumscribe judicial intervention in an issue with a rule-like provision, they must take care to isolate that provision from others in the agreement using a modular design.  In …

I’ve been hunkered down grading exams this week, so all I’ve got for you is this tale tail of a developing economy:

Dog Always Brings A Leaf To ‘Buy’ Himself Treats At The Store

For the last five years or so, the campus of Colombia’s Diversified Technical Education Institute of Monterrey Casanare has been home to a sweet black dog named Negro. There, he serves as a guardian of sorts, keeping watch over things as students go about their studies.

In return, Negro is cared for by the school’s faculty, who provide him with food, water, attention and a safe place with them to pass the night.

But the dog has apparently decided that anything beyond that is up to him.

Early on in Negro’s tenure at the school, he came to be aware of the little store on campus where students gather to buy things on their breaks; sometimes they’d buy him cookies sold there.

This, evidently, is where the dog first learned about commerce — and decided to try it out himself.

“He would go to the store and watch the children give money and receive something in exchange,” teacher Angela Garcia Bernal told The Dodo. “Then one

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Zohar Goshen and Sharon Hannes have just posted to SSRN an interesting paper, The Death of Corporate Law, arguing that markets and private ordering have begun to supplant adjudication as a mechanism for resolving corporate disputes because the increasing sophistication of investors has made private resolutions less costly. 

There are many excellent insights in the piece, which furthers the taxonomy developed by Goshen and Richard Squire in Principal Costs: A New Theory for Corporate Law and Governance to add the costs of adjudication into the mix.  Yet there may be some ways that the theory is incomplete.  For example, the authors focus on the effect of shareholders’ rising “competence” – because of the concentration of investment in the hands of institutions – rather than on shareholders’ rising power, which (according to some) may not be accompanied by greater competence at all.  Managers have acted to counteract that rising power (dual class stock regimes, delays in going public), which might represent an efficient bargain to which investors are agreeing (the authors’ view), or simply a forthcoming source of dispute.

But the other piece that’s missing, of course, is the role of securities law.  Investors’ rising power…

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The #MeToo movement has shone a spotlight not only on sexual harassment, but also on the NDAs and arbitration agreements that allow it to flourish undetected for many years – until, in some cases, it finally explodes into a full-grown corporate crisis.

Part of the explanation is that victims choose to enter into settlements rather than conduct lengthy, expensive, and potentially humiliating court battles – which is understandable and a problem for which there is no obvious immediate solution.

But the other part of the explanation is that women (and men, who are harassed at lower rates but still may be targeted) are frequently forced to sign agreements to arbitrate claims confidentially as a condition of employment or the use of various services, and the Supreme Court – with its muscular interpretation of the Federal Arbitration Act – has held that states are virtually powerless to regulate these agreements.  These agreements, it is well understood, are less about providing a venue for resolution of claims than about preventing claims at all, if for no other reason than most prohibit class actions.  So until Congress is willing to modify the FAA (which, well, I’m not going to hold my breath), the situation continues.…