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Origin Myths, Contracts, and the Hunt for Pari Passu

55 Pages Posted: 17 Jul 2010 Last revised: 8 Sep 2016

Mark C. Weidemaier

University of North Carolina (UNC) at Chapel Hill - School of Law

Robert E. Scott

Columbia University - Law School

G. Mitu Gulati

Duke University School of Law

Date Written: March 25, 2011

Abstract

Sovereign loans involve complex but largely standardized contracts, and these include some terms that no one understands. Lawyers often account for the existence of these terms through origin myths. Focusing on one contract term, the pari passu clause, this article explores two puzzling aspects of these myths. First, it demonstrates that the myths are inaccurate as to both the clause’s origin and the role of lawyers in contract drafting. Second, the myths often are unflattering, inaccurately portraying lawyers as engaged in little more than rote copying. The article probes this disjunction between the myths and lawyers’ actual practices and explores why contracts origin myths might hold such appeal for this elite segment of the bar.

Keywords: contracts, sovereign debt, pari passu, sovereign bonds, lawyers

Suggested Citation

Weidemaier, Mark C. and Scott, Robert E. and Gulati, G. Mitu, Origin Myths, Contracts, and the Hunt for Pari Passu (March 25, 2011). UNC Legal Studies Research Paper No. 1633439; 5th Annual Conference on Empirical Legal Studies Paper. Available at SSRN: https://ssrn.com/abstract=1633439 or http://dx.doi.org/10.2139/ssrn.1633439

Mark C. Weidemaier (Contact Author)

University of North Carolina (UNC) at Chapel Hill - School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
919.843.4373 (Phone)

Robert E. Scott

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States
212-854-0072 (Phone)

Gaurang Mitu Gulati

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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