From Feudal Land Contracts to Financial Derivatives: The Treatment of Status Through Specific Relief
52 Pages Posted: 21 Sep 2009 Last revised: 24 Sep 2015
Date Written: September 21, 2009
This paper is about financial derivatives in light of the economic collapse. Specifically, it examines why derivatives were singled out for special and favored treatment by Congress. For example, derivatives are accorded special treatment under the Bankruptcy Code that is not available to other kinds of contracts. Unlike other papers on this topic which may address the mechanics of derivatives or proposals to reform the derivatives market, this paper takes a bird's eye view of the matter to explore the reasons why derivatives enjoy such special treatment. In doing so, this paper examines the parallels between derivatives and feudal land contracts. Despite their dissimilarity, the comparison is helpful because both types of contracts are (or were) protected by specific relief. This paper contends that the reason why such an extraordinary remedy is the available relief is because both of these types of contracts embody and solidify status and status relationships.
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