Abstract

http://ssrn.com/abstract=1145995
 
 

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Successor Liability and Asymmetric Information


Albert H. Choi


University of Virginia School of Law

Fall 2007

American Law and Economics Review, Vol. 9, Issue 2, pp. 408-434, 2007

Abstract:     
The doctrine of successor liability transfers tort liability arising from the seller's past conduct from the seller to the buyer. If the buyer has as much information about the liability as the seller, all beneficial acquisitions take place and the seller takes the efficient level of precaution. However, if the seller has more information about the liability than the buyer, not all beneficial acquisitions are consummated and the seller takes a suboptimal level of precaution. I argue that, in the presence of information asymmetry, the courts should increase the damages against the (potential) seller to provide better incentives to take precaution while decreasing the damages against the buyer to encourage more beneficial asset sales.

Keywords: K13, K22, K32

Accepted Paper Series


Not Available For Download

Date posted: June 16, 2008  

Suggested Citation

Choi, Albert H., Successor Liability and Asymmetric Information (Fall 2007). American Law and Economics Review, Vol. 9, Issue 2, pp. 408-434, 2007. Available at SSRN: http://ssrn.com/abstract=1145995 or http://dx.doi.org/10.1093/aler/ahm013

Contact Information

Albert H. Choi (Contact Author)
University of Virginia School of Law ( email )
580 Massie Road
Charlottesville, VA 22903
United States

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