Sky Blog
Most financing agreements define “Events of Default” as being triggered not only by serious defaults, such as a borrower’s failure to repay its debt, but also by relatively minor or technical “secondary” defaults not involving debt repayment. Typical examples of …
Strategic alliances are pivotal in industries like biopharmaceuticals, where collaboration can make or break innovation and success. A key yet under-explored element of these alliances is good faith provisions – clauses that require parties to act with good intentions and …
Columbia Law School Professor Allan Farnsworth once confidently asserted that common law contract “doctrines, imaginatively applied, are both all that are needed and all that are desirable” to protect participants in preliminary contract negotiations and agreements (what I refer to …
You can scribble an agreement on a napkin or hire lawyers to negotiate a contract that is hundreds of pages long. Either way, most of your contractual obligations won’t be in your agreement. They will be in the background rules …
The mature field of contract design dates back nearly a century, and it now features myriad rich and varied contributions seeking to characterize or test theories of how parties organize private law to shape and enhance their economic environments. …
Loophole seeking has become a standard tool in the world of distressed debt restructuring. The highest-profile example was the J. Crew restructuring in 2016. In that transaction, the company stripped $250 million in trademark collateral from the reach of its …
Individually or collectively, corporate leaders are promising stakeholders to improve corporate practices on a range of issues. In a new article, I argue that they can demonstrate their commitment to stakeholders by designing contracts differently.
We are already attentive to …
The contractarian theory of the corporation holds that a business corporation is a creature of contract and, more specifically, a nexus of incomplete contracts between directors, shareholders, employees, suppliers, customers, and other parties (see here). This draws attention to …
First-year law students typically learn that the terms of a contract represent a snapshot of the parties’ mutual intent, captured at the “magic moment” of contract formation. In reality, however, contractual sausage making is far messier than this idealized account …
The frustration (or “frustration of purpose”) doctrine excuses a party from its contractual obligations when an extraordinary event completely undermines its principal purpose in making the deal. Historically, the doctrine has played a marginal role in contract law, as parties …
The COVID-19 pandemic of 2020 – as well as government orders to contain it – have prevented countless people, babysitters to basketball players, from fulfilling their contracts. Are all of these parties legally liable for breaching their contracts? Or …
In a new paper, “Protecting Contract’s Hidden Parties,” I argue that harm to third parties from supply chains offers a compelling reason for requiring human rights due diligence in supply chains. Many scholars have turned to fiduciary duties or negligence …
Bloomberg’s multi-talented Matt Levine recently wrote:
One of my favorite recent stories in bond documents is the one about how private equity firms changed a sentence in bond documents, which usually says that companies can’t make restricted payments if “a …
Over the past half dozen years, the three of us have written a number of papers on sovereign bond contracts. In the first set of papers, we documented the stickiness phenomenon (the reluctance of lawyers to modify standard contract language …
The choice-of-law clause is now omnipresent. A recent study found that these clauses can be found in 75 percent of material agreements executed by large public companies in the United States. The popularity of such clauses in contemporary practice raises …
In a recent article, I develop a theory of the corporation as a legal entity based upon the foundation of property law, which I call a “property theory of corporate law.” This theory, unlike the contractarian perspective on the corporation, …
Private ordering has become a common way to restructure key aspects of public corporation governance. Stockholder activists and boards of directors alike are testing the bounds of the freedom to contract in the charter and bylaws, adopting provisions aimed at …
There are two striking features about the ways in which contracts stemming from the electronic marketplace are adjudicated today. The first is the steady decline in the number of cases litigated in state court as compared with the federal forum. …
When Michael Cohen, President Donald Trump’s personal lawyer, acknowledged paying $130,000 of his own money to Stephanie Clifford (aka Stormy Daniels), the porn star who once claimed to have had an affair with Trump, Clifford’s lawyer announced that Cohen had …
In an economic environment where technological disruption and regulatory upheaval are the norm, understanding innovation processes is essential to aggregate economic growth and individual companies’ survival. As a result, how innovations are produced in a wide range of markets …