The Essential Role of Courts in Supporting Innovations

Posted: 6 Jun 2013

See all articles by Erin A. O'Hara O'Connor

Erin A. O'Hara O'Connor

Florida State University - College of Law; Gruter Institute for Law and Behavioral Research

Date Written: May 21, 2013

Abstract

Commercial parties commonly resolve their disputes in arbitration rather than courts. In fact, some estimate that as many as 90 percent of international commercial contracts opt for arbitration of future disputes, and others claim that some industries never resort to courts. However, a study of arbitration clauses in a wide variety of contracts, including franchise agreements, CEO employment contracts, technology contracts, joint venture agreements and consumer cell phone contracts, reveals that parties very often carve out a right to resort to courts for the resolution of claims designed to protect information, innovation, and reputation. Studies of international and cross-border contracts indicate that the preference for courts requires that parties are comfortable with available court systems, but when courts are thought to adequately protect information and innovation, they appear to be superior to arbitration. The data suggests that nations wishing to compete effectively for technologically-sophisticated investments must do more than credibly commit to enforcing arbitration clauses and awards. Court reforms are likely essential.

Suggested Citation

O'Hara O'Connor, Erin A., The Essential Role of Courts in Supporting Innovations (May 21, 2013). Available at SSRN: https://ssrn.com/abstract=2275486

Erin A. O'Hara O'Connor (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

HOME PAGE: http://www.law.fsu.edu/our-faculty/deans/ohara-oconnor

Gruter Institute for Law and Behavioral Research

158 Goya Road
Portola Valley, CA 94028
United States

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