Contract Law

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Essay
A Story of Two Holy Grails: How Artificial Intelligence Will Change the Design and Use of Corporate Insolvency Law
Felix Steffek
Felix Steffek is Professor of Law at the University of Cambridge. He serves as Director of the Centre for Corporate and Commercial Law (3CL) and holds a JM Keynes Fellowship in Financial Economics. He is Global Distinguished Professor of Law at the University of Notre Dame, SGRI Visiting Professor at Singapore Management University, and Senior Member of Newnham College.

The author is grateful for the very helpful comments received at the conference on ‘How AI Will Change the Law’ organized by the University of Chicago Coase-Sandor Institute for Law and Economics, the University of Chicago Law Review, and the Oxford Business Law Blog, in particular from Tony Casey who contributed a formal comment.

This Essay explores the two holy grails of AI and the law: predicting court decisions and predicting contracts. While there is some overlap between the two, because in order to draft contracts one needs to know the law, both issues can be functionally distinguished. These two areas, and their importance in the context of increasing AI development, are explored more deeply within the context of corporate insolvency law.

Contracts Corporations
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Article
Volume 89.4
Contractual Evolution
Matthew Jennejohn
Professor of Law, BYU Law School
Julian Nyarko
Assistant Professor of Law, Stanford Law School
Eric Talley
Isidor & Seville Sulzbacher Professor and Faculty Codirector of the Millstein Center for Global Markets & Corporate Ownership, Columbia Law School

Conventional wisdom portrays contracts as static distillations of parties’ shared intent at some discrete point in time. In reality, however, contract terms evolve in response to their environments, including new laws, legal interpretations, and economic shocks. While several legal scholars have offered stylized accounts of this evolutionary process, we still lack a coherent, general theory that broadly captures the dynamics of real-world contracting practice. This paper advances such a theory, in which the evolution of contract terms is a byproduct of several key features, including efficiency concerns, information, and sequential learning by attorneys who negotiate several deals over time.

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88.1
Stickiness and Incomplete Contracts
Julian Nyarko
Assistant Professor of Law, Stanford Law School.

For helpful comments and suggestions, I thank Adam Badawi, Douglas Baird, Robert Bartlett, Andrew Bradt, Guy-Uriel Charles, Benjamin Chen, Adam Chilton, Albert Choi, Ryan Copus, Robert Cooter, John Coyle, Kevin Davis, John DeFigueredo, Josh Fischman, Jeffrey Gordon, Joe Grundfest, Mitu Gulati, Andrew Guzman, Deborah Hensler, Tim Holbrook, Bert Huang, William Hubbard, Matthew Jennejohn, Francine Lafontaine, Katerina Linos, Jonathan Masur, Justin McCrary, Joshua Mitts, Kevin Quinn, Bertrall Ross, Sarath Sanga, Robert Scott, Megan Stevenson, Eric Talley, Glenn West, Diego Zambrano, and Eyak Zamir, as well as the participants of workshops at Columbia Law School, NYU School of Law, Stanford Law School, the University of Chicago Law School, University of Virginia School of Law, University of Michigan Law School, UC Davis School of Law, University of Hamburg Faculty of Law, the 2020 American Bar Association M&A Committee Meeting, the 2020 Association of American Law Schools Annual Meeting, the 2020 Stanford-IACCM Symposium, the 2019 Northwestern Conference on Law and Textual Analysis, the 2019 Annual Empirical Contracts Workshop at Penn, the 2019 Annual Meeting of the German Law and Economics Association, the 2018 Conference on Empirical Legal Studies, the 2018 Conference on Empirical Legal Studies in Europe, and the 2018 International Conference on the Economics of Litigation.

In the 1990s, Sprint PCS, one of the leading telecommuni-cations companies in the United States, created a wireless af-filiate program.
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86 Special
Unlikely Resurrection: Richard Posner, Promissory Estoppel, and The Death of Contract
Douglas G. Baird
Harry A. Bigelow Distinguished Service Professor, The University of Chicago Law School

I thank Saul Levmore for his thoughtful comments. The Frank Greenberg Fund provided generous research support for this Essay.

Many of Richard Posner’s opinions boldly confront great questions. But equally important are those that, in the aggregate, illuminate discrete areas of the law and make them easier to understand.

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86.2
Personalizing Mandatory Rules in Contract Law
Omri Ben-Shahar
Leo and Eileen Herzel Professor of Law, The University of Chicago.

We thank Oren Bar-Gill and participants in The University of Chicago Law Review Symposium on Personalized Law for their comments, and Tal Abuloff and Tom Zur for excellent research assistance.

Ariel Porat
Alain Poher Professor of Law at Tel Aviv University and Fischel-Neil Distinguished Visiting Professor of Law at The University of Chicago.
Mandatory rules in contract law are meant to protect people from “bad” terms.
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85.6
Relational Contracts of Adhesion
David A. Hoffman
Professor of Law, University of Pennsylvania Law School

I would like to thank the individuals who agreed to be interviewed for this article: Hissan Bajwa, Michal Rosenn, Bonnie Broeren, Rob Chesnut, Eric Goldman, Jay Monahan, Ari Shahdadi, Curtis Anderson, Ed Ferguson, Michael Cheah, Hansen Tong, and Miranda Lerner. Katherine Schloss Ackerman (Penn ’17), Elyssa Eisenberg (Penn ’18), and Michelle Kao (Penn ’18) provided research assistance. Tom Baker, Shyam Balganesh, Danielle Citron, Zev Eigen, Meirav Furth-Matzkin, Eric Goldman, Ethan Leib, Sophia Lee, Greg Klass, Florencia Marotta-Wurgler, Melanie McMenamin, Lior Strahilevitz, Rick Swedloff, Michael Risch, Tess Wilkinson-Ryan, David Wishnick, and participants at faculty workshops at the University of Pennsylvania, Boston University, UC Hastings, Villanova University, University of Chicago, and the Second Empirical Contracts Working Group provided useful feedback.

Consumer contract theory is myopically focused on the unread fine print. Because consumers don’t read their contracts, firms can make “hidden” terms worse without lowering prices.

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Article
Contrived Threats versus Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail
Einer Elhauge
Carroll and Milton Petrie Professor of Law, Harvard Law School.

I am grateful for funding from the Petrie-Flom Center and Harvard Law School and for helpful comments from Michael Abramowicz, Jonathan Adler, Albert Alschuler, Scott Altman, Ian Ayres, William Baude, Adam Cox, Elizabeth Emens, Richard Fallon, Joe Farrell, Brian Fitzpatrick, Charles Fried, John Goldberg, Wendy Gordon, Rick Hills, Bert Huang, Daryl Levinson, John Manning, Eric Rasmusen, Chris Robertson, Louis Michael Seidman, Christopher Serkin, Steven Shavell, Suzanna Sherry, Sonja Starr, Matt Stephenson, Cass Sunstein, Mark Tushnet, Adrian Vermeule, Abe Wickelgren, and participants in the Harvard Law Faculty Workshop, the Harvard Law and Economics Workshop, the Vanderbilt Law Faculty Workshop, and the 2014 Yale conference on Medicare and Medicaid.

I.  Threats That Induce Contract Modifications

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