Table of Contents

After Tackett: Incomplete Contracts for Post-Employment Healthcare

Maria O'Brien Hylton, Boston University School of Law

Ex Ante Choice of Jury Waiver Clauses in Mergers

Darius Palia, Rutgers Business School, Center for Contract & Economic Organization
Robert E. Scott, Columbia University - Law School

Justifying Fair Price Rules in Contract Law

Horst Eidenmueller, University of Munich, University of Oxford

The Shadowy Contours of Bankruptcy Resistant Investments

Jared A. Ellias, University of California, Hastings


CONTRACTS & COMMERCIAL LAW eJOURNAL

"After Tackett: Incomplete Contracts for Post-Employment Healthcare" Free Download
Boston Univ. School of Law, Public Law Research Paper No. 15-30

MARIA O'BRIEN HYLTON, Boston University School of Law
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This paper examines the recent U.S. Supreme Court retiree health care decision in Tackett v. M & G Polymers and focuses, in particular, on the ostensibly odd silence with respect to a critical contract term — whether the parties in fact agreed that these benefits were vested. Although the union in Tackett insisted these welfare benefits were clearly intended to vest and the employer now asserts they can be modified at any time, the collective bargaining agreement and supporting documents are ambiguous on this question. This paper examines how and why this “silence? persisted for so many decades and concludes that, at least for a while, conscious ambiguity was maintained because it was in the best interests of both parties. Only when the cost of providing the benefits became unbearable did the employer finally take advantage of the long standing silence and assert its right to modify the retiree health plan. Tackett sidelines the Sixth Circuit’s well known decision in Yard-Man as the Court insists upon the importance of applying traditional contract principles in these cases. This paper concludes that even without the favorable inference Yard-Man supplied, it is still possible (although not guaranteed) that the plaintiffs will meet their burden of proof on remand and hold onto their health benefits in retirement.

"Ex Ante Choice of Jury Waiver Clauses in Mergers" Free Download
17 American Law and Economics Review (Fall 2015)
Columbia Law and Economics Working Paper No. 518
Columbia Public Law Research Paper No. 14-473

DARIUS PALIA, Rutgers Business School, Center for Contract & Economic Organization
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ROBERT E. SCOTT, Columbia University - Law School
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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 state has such an effect. Third, we find that contracts negotiated by counsel from high reputation law firms tend to include jury waiver clauses, and this effect is more significant for the acquirer’s law firm than for the target’s law firm. Fourth, we find strong evidence for the bargaining power hypothesis wherein larger acquirers that take over smaller targets are more likely to include jury waiver clauses. Finally, we find no evidence that lawyer familiarity, industry-effects, whether the acquirer was an international firm, or whether the deal was completed has a statistically significant impact on the likelihood of having a jury waiver clause.

"Justifying Fair Price Rules in Contract Law" Free Download

HORST EIDENMUELLER, University of Munich, University of Oxford
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This article discusses the introduction of a general “fair price rule? in (European) contract law. According to such a rule, prices that create a “significant imbalance in the parties’ rights and obligations? would not bind the disadvantaged party. Justifying this rule cannot be avoided by holding, as Martijn Hesselink does, that in light of a “reasonable pluralism of worldviews,? the issue is one which a democratically elected lawmaker has to decide. A welfarist (economic) conception of justice best explains the existing (European) rules on contract formation and price, and it also casts a long and dark shadow over a general “fair price rule.?

"The Shadowy Contours of Bankruptcy Resistant Investments" Free Download
Columbia Law Review Sidebar, Vol. 114, 2014

JARED A. ELLIAS, University of California, Hastings
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Baird and Casey recently argued in favor of contractual innovations that allow lenders to contract around bankruptcy law. These innovations, which they call withdrawal rights, are said to increase the efficiency of financing in many cases, and Baird and Casey urge judges to enforce them. This brief Essay uses a case study of a Chapter 11 bankruptcy where withdrawal rights were enforced by operation of foreign law to challenge Baird and Casey’s assumptions. The case study suggests that managers may lack a full understanding of how their actions ex ante affect bankruptcy outcomes. Substantial changes for managerial behavior and corporate regulation may be needed to allow managers and investors to utilize withdrawal rights when doing so would enhance the efficiency of financing.

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Contracts & Commercial Law eJournal

IAN AYRES
William K. Townsend Professor of Law, Yale University - Yale Law School, Yale University - Yale School of Management

RANDY E. BARNETT
Carmack Waterhouse Professor of Legal Theory, Georgetown University Law Center

LISA E. BERNSTEIN
Wilson-Dickinson Professor of Law, University of Chicago Law School

CLAYTON P. GILLETTE
Max E. Greenberg Professor of Contract Law, New York University School of Law

ROBERT A. HILLMAN
Edwin H. Woodruff Professor of Law, Cornell Law School

AVERY W. KATZ
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RANDAL C. PICKER
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ALAN SCHWARTZ
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MICHAEL J. TREBILCOCK
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ELIZABETH WARREN
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