Spring 2018 Workshop Series Schedule
All presenters and topics are subject to change. All workshops will take place in Case Lounge (Jerome Greene Hall, Room 701) from 4:20-6:10 p.m. unless otherwise noted.
January 22, 2018 (Monday) 4:20 PM - 6:10 PM
Douglas G. Baird
- Harry A. Bigelow Distinguished Service Professor of Law, The University of Chicago, The Law School
Terms of Engagement
The environment in which parties negotiate matters, and contract law, in conjunction with commercial norms, contributes to it. The substantive default rules of contract law set the stage for the bargaining that follows. So too do the various background rules about the obligations each party owes the other about sharing information. In addition, commercial actors can take advantage of legal rules to shape a bargaining environment that suits their needs. Master agreements between parties, even when they are not legally enforceable, often serve as the starting place for negotiations. When an unexpected event appears and the relationship needs to be reforged, existing terms and conditions affect the dynamics of negotiations, again even if, at the time, there is no legally enforceable contract between the parties. This review essay takes stock of what is known about terms of engagement. It focuses first on the legal rules that help create the environment in which the parties bargain with each other. It goes on to explore how parties create their own terms of engagement.
February 5, 2018 (Monday) 4:20 PM - 6:10 PM
Wendy Netter Epstein
- Associate Professor of Law, DePaul University College of Law
Price Transparency and Incomplete Contracts in Health Care
Market-based health reform solutions dominate the post-Affordable Care Act landscape. Under these plans, competition is supposed to bring down ballooning prices, and patients are to act more like consumers, refusing lowvalue, medically unnecessary care. Whether one embraces these solutions, one thing is clear: they cannot work absent price transparency—which the U.S. system lacks. To the contrary, the law explicitly enforces open price term contracts between patients and providers.
This Article is the first to synthesize theories of incomplete contracts from traditional law and economics and recent work in the behavioral sciences and to apply these theories to the price transparency problem. It argues that doctrine is out of step with theory, and proposes a contract law solution: an information-forcing penalty default rule. Courts should impose an undesirable default to force the parties to contract around the default. When providers fail to include a price, and it would have been reasonable to do so, courts should fill the gap with a price of $0. Rather than risk not being paid, providers will include a price in the patient contract. Legislative action has been both slow and ineffective in fixing the crucial price transparency problem. At no other time in recent memory has the importance of contract theory been put into such sharp relief and, remarkably, in an area of law that is at the very core of the emerging political economy.
February 19, 2018 (Monday) 4:20 PM - 6:10 PM
- Professor of Law, The George Washington University Law School
Boiling Down Boilerplate in M&A Agreements
“Boilerplate” consists of standardized terms whose meaning is intended to be consistent from one transaction to the next, and these provisions are ubiquitous in contracts and related transactional documents. In their recent Duke Law Journal article, The Black Hole Problem in Commercial Boilerplate, Stephen Choi, Mitu Gulati, and Robert Scott have highlighted the potentially corrosive effect of the legal drafting process on boilerplate provisions. They show how incremental edits to boilerplate pari passu clauses for sovereign debt agreements have led to textual “black holes,” which potentially undercut the standardization purpose, wording, and substantive meaning of these boilerplate provisions. In this article we offer preliminary evidence of a similar textual “black hole” phenomenon taking place in the mergers and acquisitions context.
We show that the mergers and acquisition context epitomizes the problem of unreflective copying of precedent provisions combined with ad hoc edits to individual clauses, which erode the textual integrity and meaning of boilerplate provisions. Each agreement is based on a prior deal precedent, and drafters frequently incorporate sections of the prior deal without sufficient scrutiny about the degree to which idiosyncratic novelties have been introduced in the precedent document that may be inapplicable to the new deal. At the same time, high levels of “editorial churning” take place in the process of transforming each precedent into the current acquisition agreement. The result is a problem of “drafting drift.” Boilerplate provisions live on from deal to deal, yet gradually shed their textual integrity and potentially lose their clear meaning as ad hoc edits are copied from deal to deal and new ad hoc edits are added at each stage.
We show how it is possible to identify the paragraphs of acquisition agreements which serve as boilerplate and to document both the degree and type of textual “drift” of these provisions over multiple generations. We construct “family trees” for boilerplate provisions by tracing the ancestors of each provision backwards in a linear way to each prior precedent. Then we reverse the process to show how ancestor provisions have progeny extending out in multiple directions which become increasingly dissimilar to their original ancestor and to each other over a few generations of acquisition agreements.
Our study shows that incremental changes in boilerplate from one generation to the next foster rapid “speciation” of the terms. Small additions and deletions from boilerplate text lead to significant cumulative effects over multiple generations. We demonstrate that this textual “drift” takes place both within boilerplate that falls within a given chain of precedent, but also even more broadly for boilerplate provisions that have a common ancestor precedent, but evolve separately along different lineages of precedents. Like the Big Bang, the heterogeneity of boilerplate text appears to increase in all directions, which supports an “expanding universe” theory for boilerplate that undermines the textual integrity and the meaning of boilerplate terms. While we will expand on the quantitative and qualitative analysis of the evolution of boilerplate in a future work, the preliminary evidence presented in this paper reinforces the case for the textual “black hole” theory.
March 8, 2018 (Thursday) 12:00 PM - 1:10 PM
- Professor of Law, New York University School of Law
March 26, 2018 (Monday) 4:20 PM - 6:10 PM
- Walter M. Upchurch, Jr. Professor, Fuqua School of Business at Duke University
- Sterling Professor Law, Yale University Law School
April 9, 2018 (Monday) 4:20 PM - 6:10 PM
- Professor of Strategic Manaagement and Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship, Rotman School of Management, University of Toronto
April 23, 2018 (Monday) 4:20 PM - 6:10 PM
- Assistant Professor of Finance, Graduate School of Business, Stanford University