The Crisis Exposed by Pari Passu
6 Pages Posted: 11 May 2013
Date Written: 2011
This article is one practitioner's reaction to Gulati and Scott's The Three and A Half Minute Transaction: Boilerplate and the Limits of Contract Design. It notes that current contract drafting practices, especially for sovereign debt instruments, create a crisis: that is, a danger and an opportunity. The danger is the offshoring of contract drafting. The opportunity is to substantially improve contract drafting by establishing in a law school a laboratory program for creative innovation in contract drafting. The article suggests issues that such a program could adddress: the implications of the canons of interpretation for drafting, the problem of ambiguity, and the application of the contra proferentem canon. Students would learn from courses in the program how contract language would be interpreted by judges and how to draft to avoid the risk of ambiguity and related litigation. The article suggests that, given the stickiness of sovereign debt instruments, such a program might not change current practice in these instruments, but it could have an effect in other fields of contract drafting.
Keywords: pari passu, legal education, contract drafting, offshoring, outsourcing, contra proferentem, legal drafting
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