Comments for Contracts

Comment on Debt(s) We Owe the Dead as Reparations by Diplomi_rkSi

Diplomi_rkSi — Wed, 10 Sep 2025 06:38:05 +0000

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Comment on Excuse 2.0: A Macroeconomic Model of Contract Excuse by Yair Listokin

Yair Listokin — Wed, 29 Nov 2023 01:58:23 +0000

We thank Professor Hillman for his acute review of our article, Excuse 2.0, in Jotwell. Hillman captures the crux of our article, that “in systematic risk situations ambiguous excuse law promotes compromise and loss sharing that lessens economic havoc in the long-term, such as bankruptcies.” Ambiguous excuse law spreads risk by leaving parties unsure of their legal rights after a systematic risk event, such as Covid-19, has occurred. Since each party thinks that there is a real prospect of either winning or losing a contract claim in the wake of the systematic risk event, contract renegotiations taking place in the shadow of the ambiguous doctrine tend to significantly impair the potential rights of both parties. The parties thus share losses—exactly what society wants from a macroeconomic perspective in the wake of systematic risk. For more on the main argument, please see our article and Professor Hillman’s review.
We write to respond to two important concerns raised by the review. First, the review notes that “the authors emphasize the indeterminacy of excuse doctrine so enthusiastically (e.g., “notoriously vague”) that the reader may get the feeling that the authors believe, in contrast, that other contract rules are relatively certain.” We don’t mean to say that excuse doctrine is the only ambiguous area of contract law, or even that excuse is the most ambiguous doctrine in contracts. Indeed, in most states of the world, attempting to avoid contractual liability via an excuse claim is a losing argument. When systematic risk transpires, however, we think that the excuse introduces considerable ambiguity, a view held by Corbin, Williston, and Farnsworth, among others. We also don’t think that legal ambiguity is generally good because ambiguity raises costs and risks for contracting parties. With respect to the excuse and impossibility doctrine in the face of systematic risk, however, we think that ambiguity has efficient properties in inducing risk sharing settlements that do not apply to these other areas of ambiguous doctrine. Although ambiguous doctrine may contribute to more equal settlements in other contract law domains, these risk sharing benefits are small in the ordinary course, where the least cost risk bearer analysis applies. Risk sharing, however, assumes greater importance for thinking about contract law when other sources of managing risk, such as insurance, are unavailable, as they are in the face of systematic risk. It is this characteristic, and not a unique amount of ambiguity, that differentiates ambiguous excuse doctrine from other ambiguous contract law doctrines.
Second, the review asks “why risk sharing by judicial decree is not a helpful solution to the challenges of excuse cases?” In other words, why can’t the judge just name a loss sharing ratio (e.g. 50%/50%) to promote risk sharing in the face of systematic risk? The judge could indeed impose risk sharing, but such risk sharing would not leverage private information to tailor the settlement to the needs of each party. If there is a fixed sharing rule in the face of systematic risk, then both parties benefit (or suffer) equally from the doctrine. There is no tailoring. Ambiguous excuse law, by contrast, spreads risk by settlement and not decree. If a party to a contract is near bankruptcy already, then the party has little to lose from “rolling the dice” with ambiguous excuse doctrine. A win is complete, while a loss harms that party’s creditors in bankruptcy more than the party’s own bottom line. As a result, the more financially precarious party will demand a more favorable settlement from the less precarious party. This means that loss sharing is “tailored” with ambiguous contract law. The more precarious party bears less of the losses from the occurrence of a negative event than the financially stronger party—a better distribution of risk than any fixed judicial sharing rule.
As we said at the outset, we thank Professor Hillman for his careful synthesis and invaluable insights regarding our article and look forward to further illuminating discussion with our readers.

Comment on Commonsense Consent and Contract Law by Greg Klass

Greg Klass — Fri, 09 Dec 2022 15:13:06 +0000

Jeremy’s point is an interesting one. In both ProCD and Hill v. Gateway, Easterbrook mentions that the consumer had some reason to know that terms would be in the box. In ProCD Easterbrook mentions the small print and in Hill he emphasizes that the ad mentioned a limited warranty.

But these forms of notice are thin. Small print on a box would not, for example, insulate a company against an otherwise misleading ad. (See the recent Barilla Pasta decision in California.) Why should it be enough to inform a consumer of terms in the box? Maybe the screen splash was essential in ProCD. But there’s no screen splash in Hill v. Gateway. Just an ad mentioning warranties and lifetime support. That notice requires the consumer to do a lot of reasoning to know that the box might contain an arbitration clause.

Second, there’s a gulf between assenting to terms that are available, and assenting to whatever terms the seller chooses to put in the box. Easterbrook suggests consumers could ask for the terms in advance, including under Magnusson-Moss. But he doesn’t identify any mechanisms for doing that, or evidence that the sellers would have provided them.

I think Demaree-Cotton and Sommers’ thesis helps explain Easterbrook’s rhetorical move (aka slight of hand). He is trying to get these cases into the frame they identify: capacity for consent, even if not actual (informed) consent. But I’m with what I take to be Eyal’s point: the move is purely rhetorical. Easterbrook has not shown that in fact these consumers had or even should have had the information necessary to know that they were consenting to terms or that they had meaningful access to those terms. The capacity for informed consent here is science fiction. But the rhetoric works — again for reasons Demaree-Cotton and Sommers’ work perhaps explains.

Last thought: The internet has changed all this. Now it’s easy to give terms in advance that no one will read, rather than notice of terms no one will ask to see.

Comment on Commonsense Consent and Contract Law by Jeremy Telman

Jeremy Telman — Tue, 06 Dec 2022 22:30:58 +0000

In ProCD, warnings were provided on the box containing the software (admittedly in a tiny font) but they also splashed on Zeidenberg’s screen before he used the software. How is that a situation in which he could not have seen the terms before he consented?

Comment on “You Are Asking Me About Reading Things I Never Had to Read”: Consumer Contracting in Historical Context by ‘“You Are Asking Me About Reading Things I Never Had to Read ”: Consumer Contracting in Historical Context’ | Private Law Theory - Obligations, property, legal theory

Fri, 18 Dec 2020 09:14:30 +0000

[…] Anne Fleming, The Rise and Fall of Unconscionability as the ‘Law of the Poor’, 102 Georgetown Law Journal 1383 (2014). Who is best suited to police unfair terms – the market, the judiciary, or the legislature? Williams vs Walker-Thomas Furniture has long been offered as a cautionary tale, but in her 2014 article, legal historian Anne Fleming takes on the standard narrative of judicial overreach and recasts the relationships among institutional actors in a reform movement. In 1965, Judge Skelly Wright ruled that Ora Lee Williams’s contract to pay for furniture on a pro rata installment plan was subject to review for unconscionability – a moment of judicial activism that was later blamed for the decline and stagnation of the doctrine of unconscionability … (more) […]

Comment on Income Sharing Arrangements and Coding Bootcamps: Boom or Bust for the Blue Collar Breadwinner? by Tequila Brooks

Tequila Brooks — Wed, 09 Dec 2020 23:12:35 +0000

Great review! I look forward to reading the article.

Comment on Fine Print Subservience by Anna Gelpern

Anna Gelpern — Wed, 15 Jan 2020 23:06:50 +0000

What a lovely way to ding the awful convention of ending law journal articles with prescriptions! Thank you.

Comment on The Power of Default: Path Dependence in the Drafting of Commercial Contracts by C Haward Soper

C Haward Soper — Wed, 08 Jan 2020 17:43:18 +0000

You say that choice of law clauses do “usually does not attract the attention of the negotiating parties, or even their lawyers”. I disagree. In my experience of 35 years in doing international business such clauses are routinely discussed and are a matter of material concern to companies and their advisors. Juliet Kostrisky’s work on this (Context Matters–What Lawyers Say About Choice of Law Decisions in Merger Agreements) is also worth a read; her conclusions are similar to Nyarko’s but more nuanced, being based on talking to the lawyers who draft the agreements.

Comment on Are Sign-in-Wrap Agreements Unreadable? by Samuel Becher

Samuel Becher — Tue, 10 Sep 2019 08:36:03 +0000

Thanks for this thoughtful and constructive review.

An additional important point we discuss in the article is the possibility that consumers would like to read their contract, or perhaps part of it, ex post. Once a dispute, a specific concern or a potential issue arises, consumers are more likely to check what their contracts say. Unreadable language, as well as one-sided and unfair terms terms, can have an unwarranted chilling effect on these consumers. Alas, this is probably especially true with respect to less-educated and more vulnerable consumers.

Comment on When Reading the Fine Print is Actually Worse for Consumers: The Case of Unenforceable Terms by ‘When Reading the Fine Print is Actually Worse for Consumers: The Case of Unenforceable Terms’ | Private Law Theory - Obligations, property, legal theory

Thu, 22 Feb 2018 14:48:01 +0000

[…] Meirav Furth-Matzkin, On the Unexpected Use of Unenforceable Contract Terms: Evidence From the Residential Rental Market, 9 Journal of Legal Analysis 1 (2017). While disclosure has been the preferred regulatory tool to ameliorate problems arising from imperfect information, it often fails. In particular, everyone is familiar with the problems associated with not reading fine print: some blissfully uninformed consumers later regret a transaction once they discover hidden charges or attributes described in the unread contract. Formal research confirms that few consumers pay attention to fine print and that disclosures are poorly designed and too abundant to be effective. The promise of mandatory rules is to avoid these problems. If sensibly drafted, they can rescue consumers from the perils of their own inattention or laziness. Take landlord-tenant laws. In most states, the warranty of habitability and other rules afford tenants a host of legal rights, such as the right to retain payment of rent if the landlord does not deliver the property in livable conditions or fails to keep appliances functional … (more) […]