The conventional view is that standardized boilerplate terms represent an optimal contractual solution to the contracting problems facing parties in large markets. As Smith and Warner explained, "harmful heuristics, like harmful mutations, will die out." But an examination of a sample of current sovereign bond contracts reveals numerous instances of harmful landmines--vague and apparently purposeful changes to standard language that increases a creditor's nonpayment risk, coupled with blatant errors in expression and drafting and a continuing use of inapt terms that were historically imported from corporate transactions. Moreover, these landmines differ from each other in important respects: purposeful changes to the standard form reflect careful lawyering on behalf of sovereign clients, while errors that only benefit subsequent activists reflect haste in adapting precedents to new transactions. Using both quantitative data and interviews with market participants, we find that the conventional view fails to recognize the unique role that lawyers play in the drafting of standard form contracts. Systematic asymmetries in the market for the lawyers who negotiate and draft these contracts appear to explain why real world contracts depart from the efficient contract paradigm.
Donald Trump, a president who has proven himself to be highly transactional and keen on reducing debt, may find a potentially trillion-dollar foreign...
CC/Devas (Mauritius) Limited v. Antrix Corp.: International Arbitration and Constitutional Avoidance
I suspect that CC/Devas (Mauritius) Limited v. Antrix Corp. Ltd. caught the eye of the Supreme Court because of an interesting constitutional question...
Academic and market interest in environmental, social, and governance (ESG) investing has grown markedly in recent years. Although less prominent, a...
Extraordinary times beget extraordinary measures. Multiple national emergencies during the past quarter century have generated a pitched debate as to...
We introduce altruism into standard models of bargaining and explore its implications for the Coase Theorem. A strict interpretation of the Coase...
This Essay expounds on the outsized role of private law in governing ownership of new technologies and data. As scholars lament gaps between law and...
The history of public policy is littered with failures to solve large-scale social problems using interventions derived from behavioral science...
The Supreme Court has twice held since 2020 that statutory restrictions on the President’s removal power violate Article II of the U.S. Constitution...
Large language models (LLMs) now perform extremely well on many natural language processing tasks. Their ability to convert legal texts to data may...
In an era of supposed great equality, women are still falling behind in the workplace. Even with more women in the workforce than in decades past...
Countries hit by unexpected crises often look to their overseas diasporas for assistance. Some countries have tapped into this generosity of their...
A defining feature of the past two and a half centuries has been the extraordinary and unprecedented velocity of technological change. The rush of new...
This chapter studies political corruption and its many relationships to the law of democracy. It begins with bribery laws, which forbid officials from...
Working hand-in-hand with the private sector, largely in a regulatory vacuum, policing agencies at the federal, state, and local level are acquiring...
There is concern that present-biased agents incur too much debt because of its deferred costs – concern that has influenced regulation of consumer...
Lenders are perfectly free to decide for themselves whether, when, how, to whom and on what terms they will extend credit to a sovereign borrower. But...
False information causes harm, threatening individuals, groups, and society. Many people struggle to judge the veracity of the information around them...
Many analyses of law take an unsentimental, perhaps even cynical view of regulated actors. On this view, law is a necessity borne of people’s selfish...